To market, to market – omni-channel retail lessons as Power Shoppers lean towards online marketplaces

Online retail marketplaces are increasingly appealing to consumers, particularly to a new breed of so-called Power Shopper. That’s according to an international study of 9000 consumers commissioned by online marketplace platform provider, Mirakl.

Ordinarily a skeptical raised eyebrow is in order for studies that find that respondents are big into whatever area of the business and tech universe that the commissioning vendor happens to operate. But this particular study, The 2022 State of Online Marketplace Adoptionregistration required – makes some interesting points and surfaces what look like some indicative trends.

The study taps into data from 9000 respondents, polled by research firm Schlesinger Group – 1000 coming from Australia, Brazil, France, Germany, Italy, Singapore, Spain, the UK and the US respectively.  The global shift to online shopping in 2020, fuelled by the COVID crisis, saw various regions marketplace usage rise. Overall the number of consumers shopping exclusively or a lot on marketplaces rose 35% from 42% in 2019 to hit 57% during the e-commerce boom of 2020 and has held steady in 2021 despite the Vaccine Economy seeing the re-opening of physical retail.

Brazil has seen the greatest expansion, up 75% from a pre-COVID baseline in 2019, followed by Australia and Singapore, both seeing 65% growth levels. Some 94% of all respondents say they expect to maintain or increase their future use of marketplaces.

Mirakl, which counts the likes of BestBuy and Carrefour among its customers, most recently came to attention late last year when the firm announced a tie-up with US retail institution Macy’s to create an online marketplace for that brand. At the time, Macy’s CEO Jeff Gennette noted that this was the latest gambit to help the retailer achieve its goal of hitting $10 billion in digital revenue by 2023:

Being the number two website in our category in the nation, we have a lot of competition and some other really strong players and all of them have marketplaces. 

His rationale is sound. The Mirakl findings suggest that consumers are drawn to retail brands that can offer their own marketplaces.  Respondents to the study said they had conducted some 42% of their online shopping in 2021 via marketplaces, while 70% declared such markets to be the most convenient way to shop. Cited reasons for such preferences included better prices (62% of respondents) and product selection (53%), followed by a better shopping experience (43%).

Power to the shopper

Most importantly for retailers contemplating their own marketplace brand extension, nearly three-quarters of so-called Power Shoppers – defined as consumers who purchase online at least once a week – say they wish that more of their favourite brands had their own marketplaces. The study finds that such Power Shoppers will conduct half of their online shopping via marketplaces. Brazilian respondents are the most enthused conducting 60% of their online shopping this way, compared to 45% in Australia.

Convenience and trust are the two drivers for Power Shoppers. Some 79% globally cited online marketplaces as the most convenient way to shop – with French respondents particularly convinced here on 94% – while 81% say they trust online marketplaces of brands with which they already have established relationships.

That last point might be an important caveat. But according to the study data, consumers are ready to go the extra mile on finding out about offerings on marketplaces. Nearly two- thirds (63%) research sellers before making a purchase, with 71% checking out the online reviews of their peers. Such views carry weight – nearly half (48%) of respondents say they would hesitate to proceed to buy from a third-party on a marketplace if there are negative comments and reviews from other buyers.

There are some important characteristics of online marketplace consumer expectations  that retailers need to take into account. One of the themes that has emerged over the past few years in omni-channel retail is the importance of delivery and fulfilment. The online marketplace consumers polled placed understandable emphasis on this – 43% of those polled cite delivery options as a benefit of marketplaces. But they have high expectations – 84% of consumers expect packages to arrive in 3-5 days or less. That said, they seem willing to pay for better delivery options, with nearly a third of respondents (30%) paying out for expedited shipping when they shop.

My take

As noted, the underlying direction of travel here is interesting. From a personal perspective, I found myself turning to several online marketplaces this Christmas, less from the cost point of view than from the perspective of finding a broader range of products to choose from. In the main, my shopping experience was highly positive – everything I ordered arrived when it was supposed to, which has become my own ‘three strikes and you’re out’ benchmark. I certainly fall into the category of Power Shopper as defined by the study and I would agree with the idea that I’m only likely to spend more on purchases via such platforms moving ahead. It will be interesting to see how Macy’s rolls out its own marketplace later this year as an evolving use case in the potential such offerings have on a retail sector that’s still facing a lot of pressure for years to come.

https://diginomica.com/market-market-omni-channel-retail-lessons-power-shoppers-lean-towards-online-marketplaces

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