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BIG BRANDS GET IN ON MARKETPLACES

If there’s one thing that’s fundamentally changed the way we all shop, it’s the online marketplace. Made famous in the late 90s by eBay, seemingly overnight, consumers were given access to an incredible range of products, were exposed to raw supply & demand pricing, and were of course suddenly given the opportunity to sell their own wares, new or old, to an audience of millions.

Amazon, the savvy internet behemoth, was never far behind eBay, quickly seeing the

potential in having its own online marketplace. By the very early 2000s, it was allowingtraders to sell the same products competing alongside Amazon’s own offering – often at an alternative, lower price. Why, one might logically ask, would they be prepared to apparently undercut their own prices?

Play.com followed Amazon by launching their own marketplace and in 2010, ASOS launched marketplace.asos.com, interesting for its focus on ‘democratising fashion’. And of course, we cannot overlook App stores, such as Google Play or Apple’s App Store, which give the opportunity for buyers and sellers to meet and trade under their digital roofs.ers to sell the same products competing alongside Amazon’s own offering – often at an alternative, lower price. Why, one might logically ask, would they be prepared to apparently undercut their own prices?

Indeed over the years, these various companies have set something of a trend which according to Forrester, we will start to see more of in the coming 18-24 months. And it starts to become pretty obvious as to why.

According to Forrester, Amazon’s marketplace accounts for fully 35% of its gross retail sales. That, is sizeable. When we scratch a little deeper, the attraction to a retailer is clear: they can greatly increase their product range, take a chunk of the margin for matching the consumer to the seller, and bear very little logistical expenses, such as buying, storage or shipping. And it’s low risk. If something doesn’t sell, it’s not an immediate problem, and if something goes wrong, well, you’re just there to help make things better.

And that’s not all. Forrester are seeing an interesting growth area for media companies. As their revenue landscapes become unpredictable, even unstable, new revenue streams are welcome. Newspapers, for example, have long been engaged in facilitating sales, through classifieds and the like. The notion of being able to link their editorial to these transactions – and to take a portion of the cash for doing so – is intriguing.

And as brands are encouraged to take more of an editorial role in the lives of their consumers, marketplaces could offer fantastic opportunities for their editorial to convert into further sales they may never have anticipated, or never seemed obvious. Is it completely unreasonable, for example, for electrical retailers to develop reselling platforms for old wares, in a bid to encourage shopper loyalty purchase cycles?

And perhaps it’s something Facebook have an eye on. As we have seen, retail is very much in their sights – a Facebook marketplace does not seem far-fetched in the slightest.

Of course, establishing an online marketplace needs to be a well considered endeavour; it’s no small undertaking. If ill-considered, it could end up a ghost town. But as the smallest of peer selling communities such as Etsy have shown, a heck of a lot can be achieved, from nothing. We’ll be keeping a close eye on developments…

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