In today’s retail world, phrases like “retail transformation,” “retail apocalypse” and “retail renaissance” have become staple industry jargon. But what exactly do these buzzwords really mean for the retail industry?
As retail continues to see the metamorphosis of the traditional brick-and-mortar store evolve into a true omnichannel environment, many retailers are looking to create a unique experience that rivals industry disruptors like Amazon, yet gives consumers the highly curated and personalized shopping experience they are in search of. Achieving a true omnichannel environment, and better yet achieving an environment that truly meets the needs and continuously captures the attention of consumers, is proving a tough task for retailers.
In trying to rival Amazon, retailers find themselves at a loss given that they do not have the current manpower or technical capabilities to match Amazon’s marketplace model; yet they are very aware that in the age of retail 2.0, it’s either disrupt or be disrupted, and their digital and physical capabilities must be up to par to compete in the current environment. For example, a recent Gartner report highlights that in the U.S. alone, 55% of product searches started on Amazon.com in 2016, up from 44% in 2015. In fact, Gartner estimates that, “By 2020, over 60% of online sellers will either list their products on marketplaces or sell third-party products on their core commerce sites.”
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Creating An Effective Marketplace Environment
To compete against Amazon, some retailers are already deploying their own online marketplace solution. But developing a marketplace internally is no easy feat and many face endless challenges, including vendor onboarding, product curation and creating a consistent customer experience across the board.
However, retailers are capable of developing their own marketplace solutions with the right counsel and strategies. To ensure a successful online marketplace environment, retailers should follow a few best practices:
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Choose the right technology partner. As retailers look to continue to evolve their e-Commerce efforts through the adoption of marketplace models and additional e-Commerce initiatives, finding the right technology partner is key to success. Retailers should not have to spend all their resources on developing their own technology capabilities. Their core focus should be on developing human connections with customers both online and in-store, and their technology should be an enabling component of that formula. Therefore, when looking to develop a marketplace model, retailers should look for an online marketplace technology partner that can plug directly into their e-Commerce tech ecosystem and deliver an efficient time-to-market and -value timeline.
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Create a consistent customer experience. When looking to implement an online marketplace model, retailers should keep in mind that the online marketplace model is meant to take your customer’s shopping experience to the next level. Therefore retailers should take the time to fully evaluate how the online marketplace model will help create a robust retail ecosystem for their customers. For example, does it make sense for your marketplace model to include a service component so that the customer can look to your organization as a one-stop shop to find everything they need? Keeping in mind that consumers are increasingly drawn to experience-driven retail, your online marketplace should serve as a destination where customers can make the experience happen. Whether that means finding all of the right supplies for their summer barbeque, including product purchase and installation, or the ideal spot to purchase the ingredients and take a cooking class for an upcoming dinner party, the possibilities are quite endless.
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Carefully curate products and vendors. As mentioned above, the marketplace model should be an extension of your brand, as well as provide the opportunity to cross-sell and upsell. To ensure success, define clear objectives for product and vendor curation — ones that make sense not only for your organization and brand, but also for your third-party sellers. Additionally, by implementing a careful process to analyze all the performance of all third-party partners, retailers can set up seller guidelines to maintain integrity and consistency across the retail organization, ensuring a pleasant shopping experience for customers.
While the task of creating an online marketplace to level the playing field against Amazon may seem daunting, it is quite doable and the payoffs of providing an enhanced customer experience can be invaluable. By partnering with the right technology partner and implementing proper techniques to ensure a consistent customer experience, retailers will be able to successfully deliver an innovative retail environment that satisfies the needs of retail 2.0.
Adrien Nussenbaum is the U.S. CEO and co-founder of Mirakl Inc., a provider of online marketplace technology and services. Nussenbaum is an Innovation All-Star because of his entrepreneurial drive and business development accomplishments. At Mirakl, he has provided a path for 100 customers to compete against the Amazon machine by enabling them to launch and operate their own online marketplace without the risks and costs associated with internal development. Through his work and innovative ideas, Nussenbaum has become a proponent and catalyst for the online marketplace revolution by helping to transform the traditional e-Commerce landscape and make commerce agile, scalable, and most importantly, profitable for all retailers.
