How to Enhance Your Omnichannel Strategy With a Marketplace

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How to Enhance Your Omnichannel Strategy With a Marketplace

By: Roshan Idnani

Online marketplaces are the future. In 2020, enterprise marketplaces grew at double the rate of overall eCommerce, with growth topping 81% year-over-year in Q4 – proving the clear utilization of online marketplaces in creating revenue and expanding horizons.

Brands should consider an online marketplace for many reasons including, reaching a broader demographic, expanding offering, increasing revenue and more:

  • Reaching a broader demographic: Brands can expand their methods of generating revenue by widening the range of customers. By growing assortment to meet more of consumers’ needs, online marketplaces empower companies to reach a broader audience and drive up revenue.
  • Expanding offerings: Marketplaces are essential to growing your online product assortment. On average in 2020, retailers operating enterprise marketplaces grew their assortment by 32% and benefited from an even larger gain of 81% in overall GMV.
  • Increasing revenue: eCommerce platforms increase revenue. Additionally, companies can grow revenue through the marketplace by incorporating marketplace products into digital advertising campaigns, ultimately capturing more spend from buyers as they turn to eCommerce for a greater share of their purchases. Using marketing money would be costly in the beginning, but prove essential in the long run to build up a network of loyal customers.

Brands can do a number of things to enhance their eCommerce business with marketplace solutions. We identified methods and tips to grow your eCommerce business;

  • Use digital tools to enhance your brand: Using search engine optimization (SEO) and tools such as web analytics and competitive benchmarking will help put your business ahead of your peers. In fact, enterprise marketplaces lead to SEO benefits: retailers that leverage the enterprise marketplace model see a 34% in overall organic site traffic, benefiting from additional demand and relevance without additional marketing spend.
  • Create trustworthy partnerships: With an enterprise marketplace, your buyers’ experience is in the hands of your sellers. Therefore, it is an important practice to vet and form close relationships with your partners to ensure the continued strength of your eCommerce business.
  • Don’t be afraid to advertise: Nowadays, businesses spend loads of time and money on advertising, and your marketplace should be an integral part of that investment. While keeping track of your money, be sure to invest in customer acquisition and putting your brand out there – both for your owned assortment and for your marketplace offers.

BORN Group is thrilled to be a partner of Mirakl, the industry’s first and most advanced marketplace SaaS platform. With Mirakl, organizations across B2B and B2C industries can launch marketplaces faster, grow bigger, and operate with confidence as they exceed rising customer expectations. Platforms are the new competitive advantage in eCommerce, and the world’s most trusted brands choose Mirakl for its comprehensive solution of technology, expertise, and the Mirakl Connect ecosystem to unlock the power of the platform business model for them. 

One of our joint marketplace success stories, iShopChangi allowed the leading travel hub to achieve an exceptional omnichannel solution that will serve millions of travelers for years to come. The goal of the project was to create an omnipresent shopping platform to install Changi Airport Group as the leader in their industry. BORN’s biggest challenge was to create a system which could accommodate both the remote and in-person practices Changi Airport Group had in place. With BORN Group’s help, millions of users visit the site to achieve perks such as duty-free shopping and earning rewards when shopping.

For more information surrounding BORN Group and our marketplace offering, please visit here.

eMarketplaces: Unlocking The Value of Platform Economy

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eMarketplaces: Unlocking The Value of Platform Economy

By: Aditya Basu

Unlocking & navigating the platform economy through a nuanced ecosystem strategy are en vogue these days, both in boardroom discussions and consumer preferences. Today, the world’s 6 most valuable companies by market capitalization and around 80% of the world’s unicorn startups operate a digital ecosystem that enables two-sided market dynamics and have gained enormous market share through network effects.

Platform businesses bring together producers, sellers, and consumers in high-value exchanges. Their chief assets are information and interactions, which together are also the source of the value they create and their competitive advantage. One of the classic examples of leveraging the platform economy through achieving critical mass & network effect is through the meteoric rise of Apple’s iPhones between 2007 – 2015. Though Nokia, Samsung, Motorola, Sony Ericsson, and LG collectively controlled 90% of the industry’s global profits in 2006, by 2015 the iPhone singlehandedly generated 92% of global profits by leveraging the power of platforms through a two-sided marketplace strategy.

McKinsey forecasted that 30% of all global economic activity, $60 trillion, will be mediated by platforms and ecosystems in 10 years’ time & Gartner says that “By 2023, at least 70% of the enterprise marketplaces launched will serve B2B transactions.” Yet, only 3% of established companies worldwide have adopted an active marketplace strategy. 

While the platform economy offers the most profitable & lucrative business model, online marketplaces are tough to build and achieve the “Critical Mass.” The classic chicken & egg conundrum, “To attain a critical mass of buyers, you need a critical mass of suppliers—but to attract suppliers, you need a lot of buyers.” 

We are in the midst of a seismic shift in business and society. Understanding platform strategy will be vital to grasp tomorrow’s economic models.

Evolution of Brand Economy: Omnichannel to Ecosystem Play

Today’s customers increasingly expect a seamless, integrated, consistent, and personalized experience with their service providers which current multi-channel models, with their multiple silos of customer contact, are unable to provide. A fully integrated response to these new customer requirements will need to be both customer-driven and omnichannel in nature. As we speak, large conglomerates are struggling with the “IF & HOW” to leverage digital platforms and ecosystem models for their industries. The key CXO challenge today is to create a core platform that can deliver incremental growth along with the new business & operating models around customers, partners & competitors.

Digital marketplaces have been the pulse of the consumer industry, yet many brands struggle to strike the correct chord. The shift in consumer behavior during the COVID-19 pandemic accelerated digitization even further. However, the online marketplace model has persisted, driven by consumers seeking the convenience and broad assortment that marketplaces provide. In fact, online marketplaces now represent 58% of global web sales, totaling more than $2 trillion annually.

Broad Pivots of Marketplace Operations: Strategy to Execution

The typical marketplace model has millions of customers, multiple systems, and complex operations. Any brand trying to enter the marketplace will have to swim through the chaos to ace their digital marketplace strategy. We simplify the Marketplace model from the lens of 5 broad pivots of Marketplace Operator, Enterprise commerce & marketing capabilities, the right partnerships & alliances in Fulfillment, logistics & Financial services along with building a best in class Tech & Data Ecosystem, as depicted in the graphic below.

Our key capabilities encompass our methodology of Imagine, Build and Run; we develop and implement strategies for customers to grow profitably in a borderless, digitally-and-physically connected world. We lead brands from strategy to execution by setting up feasible business & operational models, defining KPIs, setting up integrated applications to enable associates, and finally delivering exceptional customer experience driven by our Stella Framework.

A few notable value drivers on Marketplace implementation include, but are not limited to;

  • Revenue augmentation with multi-channel & cross-border sales
  • Improved customer targeting & analytics through digital marketing, micro-segmentation & social integrations
  • Cross-sell & Up-sell opportunities through tailored pricing, product bundling & increase AoV (share of wallet)
  • Business process optimization
  • Walking the Talk Leadership: Marketplace Implementation across the globe

Walking The Talk Leadership: Marketplace Implementation Across The Globe

Recently we were approached by one of Asia’s largest transportation hubs to become their digital growth partner, to develop & manage its next-generation omnichannel e-Commerce Marketplace for onboarding and tenant management. BORN developed an experience-led Marketplace platform to provide a personalized shopping experience for Sellers (B2B), consumers (B2C), Enterprise users (B2E). The implementation has helped them to optimize marketing effectiveness, improve operational efficiency with faster time to market, accelerate conversions, and enable topline growth through upselling & cross-sell.

For more information in regard to BORN Group’s Marketplace offerings and further case studies, please inquire here.

A Marketplace for All Reasons

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A Marketplace for All Reasons

Before the advent of the online retail marketplace as we know it, there were B2B marketplaces that came out of the dotcom bubble such as VerticalNet, CommerceOne and Covisint. They helped businesses with online auctions at the one end and with procurement on the other, which involved complex transactions such as requests for quotations, information and proposals. They have mainly been subsumed into and are used these days as part of complex enterprise resource planning systems in major corporations.

However, the online marketplace model has persisted, driven by consumers seeking the convenience and broad assortment that marketplaces provide. In fact, online marketplaces now represent 57% of global web sales, totaling more than $2 trillion annually[1]. B2Bs are catching onto the marketplace trend as well: Gartner says that “By 2023, at least 70% of the enterprise marketplaces launched will serve B2B transactions”[2].

The origin of the modern marketplace trend can be traced, in part, back to two companies that did survive the dot-com bubble: Amazon and eBay. Amazon was founded in 2000 originally as an online marketplace for books before expanding into multiple categories and becoming a behemoth that is one of the biggest economic forces in the world[3]. Alexa, itself an Amazon company, ranks it the third-most visited website in the United States after Google and Youtube.[4]

eBay, founded by Pierre Omidyar in 1995, evolved from being an auction site to becoming an online marketplace with its ‘Buy it Now’ feature. eBay has grown to become a multibillion-dollar organization so big that the payment services provider it owned at one time, PayPal, had to be spun off.

eBay is present in over 30 countries but in China, where the consumer-to-consumer (C2C) platform Taobao – founded in 2003 by Alibaba – is the market leader, it couldn’t make a dent. Just like how eBay felt the need to own a payment services provider, Alibaba also owns Alipay, an escrow-based online payment system which is the most-widely used third-party payment solution in China.

In 2010, its service AliExpress connected Chinese manufacturers directly to international visitors, a move that would go on to radically change the offerings in many marketplaces today and give rise to retail fulfillment practices such as drop-shipping, where sellers don’t stock the product but instead buy it from a third party and have it mailed it out the customer. Taobao’s B2C platform Tmall is the third-most visited site globally.[5]

In Japan and Southeast Asia, eBay runs one of the main marketplaces Qoo10, in a joint venture together with another early C2C marketplace platform GMarket, founded in 2000 in Korea. The leader is Japan is Yahoo’s Paypay Mall, which was built on the success of the PayPay payment app and modeled on Alipay and Taobao, followed by Rakuten and then Amazon.[6]

The success of these digital giants has accelerated the adoption of the marketplace model across industries and regions, and marketplaces are being adapted to a variety of uses. We’ve begun to notice a myriad of them that can be labeled under the below categories.

Types of Marketplaces

  • Horizontal Marketplaces: where vendors offer a broad range of good and services across multiple categories, for example, Amazon or Idealo (the latter a price comparison site launched in 2000 in Germany that also offers sales of goods).
  • Vertical Marketplaces: where vendors offer products and services specific to a defined category or market. Etsy for arts, crafts and vintage items (founded 2005) or Airbnb for rentals (founded 2008) are prime examples.
  • Product Marketplaces: offering physical products such as Amazon or Walmart and even the tech marketplace Newegg.
  • Virtual Marketplaces: offering virtual products. Gaming marketplace G2G or cryptocurrency exchanges such as Binance and Coinbase fall under this category.
  • Service Marketplaces: carpooling marketplaces Didi Chuxing, Uber, Lyft Line, Waze Carpool and Blablacar are some of the most popular. TaskRabbit is a marketplace for handymen while Udemy offers online courses.
  • Hybrid Marketplaces: offering both products and services. The subscription box marketplace Cratejoy offers extra services such as subscription-specific logistics, fulfillment management and shipping, tax-smart checkout, and resource guides. Houzz connects people with interior designers but also sells products for the home.
  • Niche Marketplaces: covering only a small part of the market.

From eCommerce to Marketplaces

Traditional eCommerce websites have to deal with challenges such as a limited product range, inventory, multiple sales channels and lack of control over the customer journey. This has led to many of them converting into marketplaces, where the owner then can take over the customer journey, allowing for a seamless customer experience.

The model is also more profitable than the conventional first-party eCommerce model. Because marketplace operators do not have to source, purchase, or warehouse inventory, they mitigate the cost & risk of inventory, and can adapt and scale their assortment in response to inevitable fluctuations in consumer demand throughout the year.

Marketplaces also Offer Many Advantages for Sellers

  • Access to a Broader Customer Base: A whopping 56% of searches start on Amazon[7]. Amazon Prime has 112 million members in the US alone and over 150 million worldwide.[8] [9] In December 2019, 214.8 million users visited Amazon’s websites per month, while second-ranked Walmart could boast of 138.3 million unique visitors during the same period.[10]
  • Reduced Time to Launch: Marketplaces allow new sellers to generate revenue straight away while building awareness for their brands without worrying about driving traffic to their sites.
  • Established Infrastructure and Support: The most popular marketplaces have established programs to help sellers get their products out to customers in terms of marketing, sales and fulfillment. Amazon’s Fulfillment by Amazon (FBA) and eBay’s Global Shipping are two examples of them.

The ubiquity of marketplaces has been powered by technology companies such as Mirakl, a best-of-breed marketplace technology solution on the market. Founded in France in 2012, Mirakl was built on the expertise of its co-founders, who launched, scaled, and sold Splitgames, the first omnichannel online marketplace for video games in 2005.

Retailers, manufacturers, and wholesalers have built their online marketplaces on Mirakl’s cloud-based software. Mirakl counts customers in over 40 countries, including Carrefour, H&M, the Kroger Col, Urban Outfitters, and Best Buy Canada.

They have also made a foray into B2B marketplaces for procurement or bulk buying of parts such as Astore by Accor Hotels, as well as clients such as Airbus Helicopters and Toyota Material Handling. Mirakl even runs a “marketplace of marketplaces” called Mirakl Connect, where sellers, marketplace operators, and technology partners connect to identify new opportunities in the marketplace ecosystem.

Marketplaces have changed the way we discover products and services. Indeed, they may have changed the way we live by bringing a wide range of these directly to our devices and reducing inefficiencies by lowering the cost of acquiring information about the sellers’ products.[11]

[1] What are the top online marketplaces?, Digital Commerce 360 https://www.digitalcommerce360.com/article/infographic-top-online-marketplaces/

[2] 1 Gartner, 11 Imperatives When Building an Enterprise Marketplace Business, Sandy Shen, Jason Daigler, 10 December 2019

[3] The Amazon effect on the US economy, Investopedia,  https://www.investopedia.com/insights/amazon-effect-us-economy/

[4] Top Sites in the US, Alexa.com. https://www.alexa.com/topsites/countries/US

[5] The Top 500 Sites on the Web. Alexa.com. https://www.alexa.com/topsites

[6] Online Marketplaces in Japan: Rakuten, Amazon and PayPay Mall, Webretailer,  https://www.webretailer.com/b/online-marketplaces-japan

[7] Report: Google beats Amazon for product-search reach, but rival sees greater loyalty, Searchengineland, September 2017, https://searchengineland.com/report-google-beats-amazon-product-search-reach-rival-sees-greater-loyalty-282570

[8] Statista, https://www.statista.com/statistics/546894/number-of-amazon-prime-paying-members/

[9] Amazon Prime tops 150 million Prime members https://variety.com/2020/digital/news/amazon-150-million-prime-members-1203487355/

[10] Most popular retail websites in the United States as of December 2019, ranked by visitors, Statista, https://www.statista.com/statistics/271450/monthly-unique-visitors-to-us-retail-websites/

[11] A Strategic Analysis of Electronic Marketplaces, J. Yannis Bakos, ACM Digital Library, https://dl.acm.org/doi/10.1145/280324.280330