Marketplaces as a solution for your business' future in times of uncertainty
The struggle of many brands and retailers with the current situation doesn't need further illustration. In times of uncertainty many businesses get into a Pavlov-reaction, choose procedures over outcomes and hit the breaks. But crises like the current one offer opportunities to finally do what you should've done a long time ago. Crises catalyze a get-together of problems, solutions and actors, and create a window of opportunity in which new innovations and business models come to life.
For two decades we've seen online platforms disrupt many sectors. In retail these developments are most visible in the form of online marketplaces. From global marketplaces like Amazon to local platforms that are really able to suit local consumers needs and niche marketplaces that attract a certain audience in a particular vertical.
Be where your consumers are spending their time: on marketplaces
Consumers love marketplaces as they are able to deliver the best service and experience. On marketplaces consumers have a higher certainty they can find the product they need, for the best price and under the best conditions. Marketplaces are anchored in the orientation and purchasing behavior of consumers and are connecting links in the overall customer journey. Absence on these platforms will likely cost you both online and offline sales.
Despite these obvious trends many brands and retailers still haven't adapted and are now disconnected to that customer journey. Many companies are afraid the cannibalize existing channels or are not able to innovate and change. But to remain future-ready businesses must stay ahead of, or at least follow, the consumer and interact with them directly. The customer journey is becoming more complex as more and more channels are emerging. Think of marketplaces, voice assistants, social media and conversational channels. Customer journeys change continuously and you have to adapt your sales and marketing mix accordingly.
Start small and scale quickly
Online marketplaces should definitely be part of these mixes and they are excellent channels to get started with. You can begin on a small scale and expand your product assortment alongside your comfort zone. Keep challenging yourself by adding new products and ultimately by adding new marketplaces.
Start with a plan. Think of the marketplace to start with, a product selection and price, and your team. Centralize this team within the organisation. Make sure your are able to deliver fast and respond quickly to customer questions and reviews. In the beginning you can do a lot manually, but automate processes as soon as start hurting.
Marketplaces are your savior; now and for your future
Due to the marketplace's nature they are your lifebuoy in this current malaise and concurrently they make you ready for the future. On the short term they can help you to reduce losses. Many of your traditional sales channels may not be able to reach your consumer now. Marketplaces do this even more than ever. Consumers are moving from both offline and online retailers to online marketplaces. You can reach your existing group of consumers plus a completely new one. You could make up for lost sales via online marketplaces.
On top of that: while your organization is busy fixing short term problems via marketplaces it's concurrently building the foundations of long term success. Your organization learns what comes into play when tapping into new marketing or sales channels. Marketplaces force you to think and act differently; they teach you a certain game to play. You build knowledge and capabilities that help you to think more consumer-centric, to innovate and optimize current channels (both online and offline). You'll be better able to balance your channel mix and increasingly capable of adding and managing new channels. This allows your business to move with changing consumer searching and purchasing behavior.
The time to build a direct-to-consumer business is now
Even business that already sell on marketplaces, but in a business-to-business relationship (e.g. the so-called 'Vendor' model on Amazon) or businesses that are dependent on the fulfillment services of marketplaces are under pressure. In some countries Amazon is prioritizing essential products over others with directly impacts sales figures of suppliers. You have to build a direct-to-consumer business to be less dependent on the whims of Amazon or other parties. You need to take logistics and customer service into your own hands to keep serving your customer as well as possible and by that having more control over your sales performance.
So, selling via marketplaces with control over logistics and customer service is your way out of this crisis now and also makes your business ready for brighter days.