Many retailers have spent hours upon hours building and optimizing their websites and now enjoy loyal followings who check back often for new products. So the question becomes: How do retailers make the most from their investment and monetize their sites beyond core retail activity?
The answer to that question: Become a marketplace and allow third parties to list their products on your site in exchange for a sales commission. This can increase product selection for your shoppers without the hassle of taking on extra inventory costs, and open up additional sources of traffic and revenue.
Gartner reported on the rise of marketplaces in its “What’s Hot in Digital Commerce in 2017” report, stating that “Increased product selection [from marketplaces] can result in greater cross-selling and upselling opportunities, improved search engine optimization, and better customer experiences when some products are out of stock.”
If your organization is considering becoming a marketplace, make sure you have a solid strategy in place to handle workflows and processes. Many retailers use third-party services to streamline managing and promoting their marketplaces. One type of third-party service is a marketplace integration platform that makes it easy to work with outside sellers, “allowing companies to create their own marketplaces by enabling vendors to register, load products and sell on existing commerce sites.”
Marketplace operators can also use third-party services that promote their products both on- and off-site, keeping their marketplace vibrant with shoppers and activity. To further monetize spots in their marketplace, many retailers are also offering “brand sponsored products” (items that are prominently featured) to their sellers.
Becoming a marketplace can help retailers offer different products while bringing in additional revenue. Plus, retailers who choose to become marketplaces can also list on other retailers’ sites, expanding their reach even further. Becoming a seller on another retailer’s marketplace is a great way to test new markets or start to sell products internationally. Selling through another retailer’s marketplace is often a lower-risk alternative to establishing a stand-alone commerce site and enables brands to test a sales strategy before a full expansion.
As sites like Amazon, eBay, and Tmall become even more valuable sales channels, retailers are looking to incorporate marketplaces — both becoming one and working with others — into their strategies. Marketplaces aren’t going anywhere soon, and this trend will continue to take hold for retailers of all sizes.
Gartner’s “What’s Hot in Digital Commerce in 2017” report highlights how marketplaces, along with personalization, customer journey analytics, and more are impacting the future of retail commerce. Download the report here to see their findings in full.