Thinking of implementing an online marketplace strategy in your retail business this year or next? Or perhaps you’ve already rolled yours out and are reaping the returns?
The case for doing so – establishing a site offering products from selected third party suppliers alongside your own catalogue – is a compelling one. Never more so than in today’s times, when Australian consumers are spending more than $55 billion a year on online retail, according to the NAB Online Retail Sales Index: March 2022. That figure represents around 14.8 per cent of the total retail trade estimate.
Marketplaces are well placed to expand into new categories and ranges quickly and economically, courtesy of the fact that the inventory involved won’t touch their balance sheets. It’s owned, stored and shipped by partners, which means the only risk borne by you, the retailer, is that of reputation should the service delivered by those partners fall short of the standards expected by your customers.
Opening up the delivery options
Most e-commerce retailers with a bricks and mortar presence offer a variety of delivery options, including click and collect, and ship from store. For their own range of products, that is.
If they’re running an online marketplace, third party vendors will typically take care of the shipping and delivery detail for their own respective product lines.
But, at Marketplacer, we see a lot of upside for retailers that are able to set themselves up to offer consumers an additional option: click and collect in store, for third party products, as well as their own lines.
Why would this be of benefit? Because getting more traffic through the door represents a golden opportunity to gain incremental sales, by cross selling to customers who are already receptive to your brand. Have them coming in regularly to pick up their parcels and it’s more than likely they’ll pick up some other items in the process. In a cutthroat market, those incremental sales could make a very real difference to your company’s bottom line.
It’s a compelling prospect – and an opportunity we expect to see forward thinking retailers starting to explore over the next 18 months.
Making mission critical systems work together
But getting set up to offer this service will call for some business process re-engineering and systems integration, if it’s to work, and work well.
For starters, third party partners’ inventory positions will need to be integrated to the retailer’s e-commerce platform, via their online marketplace, in order for customers to place a single consolidated order.
The same information, along with the third-party partners delivery data (where they delivery, rates and zones for example), will need to be shared with the retailer’s order management system, so customers can be advised in checkout of the delivery options, rates and timing.
Shipment updates will also need to feed into mission critical systems like a service platform, to enable a call centre to provide accurate information to customers who contact them to check on their order status.
And then there’s the change management and training that are inevitably required to get employees up to speed with new ways of doing things. Skimp on that piece and you can pretty much guarantee that troubleshooting down the track will take up whatever time and money you thought you’d saved, and then some.
Teaming up with a trusted partner
The devil is in the detail – as is always the case with business transformation projects. Online marketplaces come with their fair share of pitfalls and avoiding them should be a priority for retailers that pride themselves on offering a stellar customer experience.
Working with a vendor that understands the complexities of the e-commerce landscape and is ahead of the curve technologically will ensure your marketplace enhances your brand and drives additional business through your doors, both virtually and physically.
If that’s a priority for your retail business, there’s never been a better time to explore just how far online marketplace technology can take you.
Luke Hilton is head of solutions engineering for Asia Pacific at Marketplacer.