Pres:Digital Marketing - Marketplaces

From EcommerceWiki

Digital Marketing - Marketplaces

Digital Marketing - Marketplaces

Title Digital Marketing - Marketplaces
Target group
Topics Marketplaces
Go to slideshow Go to print version

Public summary

Market places (Amazon, Alibaba, Ebay) are having a major impact on how companies are selling online. They are attracting a huge numbers of consumers. A a result, market places have become an important marketing and distribution platform for both retailers as well as brands. This course discusses what market places are, what their impact is and how retailers and brands can use market places to their advantage.

Slides

Notes

This is the overall framework of the Digital Marketing couse. We will start with explaining the elements of an online marketing plan. Than we will zoom in on the different marketing aspects based on the customer journey. We start with those online media most suitable to reach consumers and slowly move down the funnel. In the end we discuss customer loyalty which has as goal to re-start the entire process from the beginning.


  • What are marketplaces?
  • Types of marketplaces
  • Why marketplaces grow so fast
  • Advantages & disadvantages of marketplaces
  • Trends in marketplaces
  • How to select a marketplaces
  • Getting on a market place
Logo Ecommerce Foundation1.png 3


  • From which market places are you buying?
  • Why are you buying from them (and not from a webshop)?
  • Do you also use them to sell?
Class Assignment.jpg
Logo Ecommerce Foundation1.png 5


Notes

There are several global players:

  • Aliexpress: the international brand of Alibaba
  • Amazon
  • Ebay
  • Mercado Libre: Present in 13 South American countries
  • Rakunten: originally from Japan, owns several European platforms.

In many countries there are also local players like Allegro in Poland, Bol.com in the Netherlands, etcetera.


An online marketplace (or online ecommerce market place) is a type of ecommerce site where product and inventory information is provided by multiple third parties, whereas transactions are processed by the marketplace operator.

Logo Ecommerce Foundation1.png Source: https://en.wikipedia.org/wiki/Online_marketplace 7



Notes

The turnover of the marketplaces are growing rapidly


Notes

Amazon offes a huge assortment, allowing it to sell many different products to the same customer. Resulting in a huge "Share of Wallet".


Notes

The long tail assortment strategy allows for higher margin on rare products and more traffic (via SEO) but also because the consumer knows that "if you cannot find it on Amazon it probably does not exist."


  • Supporting the entire buying process
  • Converging in role and functionality (social media buy button)
  • Facilitating small local players
  • Placing the consumers in the driver’s seat
  • Always nearby via mobile and smart devices
Logo Ecommerce Foundation1.png 23



Notes

Amazon (but in China also Alibaba) offers retailers a wide selection of additional services:

  • Hosting/Amazon Cloud
  • Payment (Amazon Wallet)
  • Loyalty program (Amazon Prime)
  • Warehousing
  • Fulfilment
  • Return management
  • Customer care
  • and more...


Notes

An increasing number of social media platforms are offering users to buy directly what they see. In essence they are transforming into market places.


Notes

Local market places bring together local demand and supply. They can be country based (e.g. marktplaats.nl in the Netherlands or 2ehands.be, but also regional (for organic food) or city based (Peerby for sharing products/services).


Notes

You cannot sell on all market places at once. It takes time to prepare your product data, set-up processes, sign the contracts and meet the demands of the market places. You have to chose your platforms carefully from a marketing, commercial and IT/operations perspective.


  • Does it suit your brand?
  • Do you reach your target audience?
  • Are the platforms’ search and storage functions detailed enough?
  • Who determines the stock?
  • Who determines the way your product is presented?
  • What is your position compared to your competitors?
  • Which marketing actions are performed together?
  • Which information will you get back from the platform?
  • In which countries does the platform operate?
Logo Ecommerce Foundation1.png 29



  • What is the cost/earn model?
  • What is the balance of power?
  • Does the platform sell their own products?
  • Who has the purchase agreement?
  • Who becomes the owner of the customer data?
  • Who has the juridical responsibility?
  • How about safety, privacy, disputes etc.?
Logo Ecommerce Foundation1.png 30



  • Which stock model is used?
  • What are the delivery standards you will have to comply to?
  • What are the throughput times when offering a new product?
  • Who delivers the product data? Who owns it?
  • Which requirements are imposed as to the packaging?
  • How will the returns and customer service department be equipped?
  • How fast will payment happen?
  • Does the platform make use of a multi-platform (IT) solution?
  • Which IT changes will be necessary?
  • Can your organization handle the changes?
Logo Ecommerce Foundation1.png 31



Notes

Once you have selected the right market places, you have to prepare your product data and determine your price and assortment strategy.


Requirements

  • The number of product characteristics that can or must be described
  • The way products are photographed
  • The data format in which information has to be delivered

Manual or PIM?

PIM Wiki.png
Logo Ecommerce Foundation1.png 33



Reasons for applying different prices on marketplaces

  • Match competitors
  • Traffic generator
  • Reduce inventory
Price Management Example.png
Logo Ecommerce Foundation1.png Source: http://www.redicom.pt/en/solutions/multichannel-solutions/marketplaces-and-feeds/?id=195 34

Notes

Match competitors: when products are sold via marketplaces and competitors offer a lower price, retailers may tend to match competition and lower their price in this specific channel. In those situations price harmonization across channels comes under pressure.

Get traffic: It is also an option to offer (some) products for a higher or lower price on the marketplace get traffic. In this case retailers sell the some products on the marketplace. However, the more exclusive products can only be bought on the retailers own website. Be warned, some marketplaces like Amazon and Allegro for example demand that the lowest price is always offered on its platform. If the retailer is not offering the lowest price, the product is removed from the platform.

Reduce inventory: Marketplaces can be an attractive way to get rid of inventory by selling this at a discount on marketplaces.


Stock models on marketplaces:

  • Wholesale
  • Drop shipment
  • Consignment
  • Cross-dock
Logo Ecommerce Foundation1.png 35

Notes

Wholesale: the platform is buying stock, takes the stock risk and delivers to the consumer

Drop shipment: the platform receives the order, but dispatches the order to the stock-keeping seller. The seller will execute the delivery to the consumer.

Consignment: the platform stores the items and executes the consumer delivery, but the stock ownership and risk remains with the seller until it is sold to the consumer.

Cross-dock: the platform receives the order, but will receive stock from the seller after a consumer order has been placed. The platform will then take care of the consumer delivery and bundle items with items from other sellers if requested.


Notes

Philips is an example of a company that cooperates with several marketplaces in multiple countries. To support its countries in finding the correct partnership, Philips uses the model shown below. On the basis of four separate roles, sixteen different cooperation forms can be distinghuised. Philips chooses which scenarios can be developed in other countries (such as the B2B e-commerce portal), and which should be used as a pilot (such as omnichannel branded stores in eBay).


  • Contractual and commercial agreements (owner of the product data, restrictions regarding customer data, protection and payment terms, etc.)
  • Operational agreements (logistics, customer service and marketing)
  • Record the agreements in a SLA (Service Level Agreement)
Logo Ecommerce Foundation1.png 37

Notes

It is advised to write down these arrangements in a separate Service Level Agreement (SLA), which has the same contractual value but is often easier to adapt than the formal contract.


  • Select a retailer/brand of your choice.
  • On which local market places
    • would you sell?
    • or not sell?
    • why?
  • Per market place:
    • What is your assortment strategy? Why?
    • What is your pricing strategy? Why?
Logo Ecommerce Foundation1.png 38


  • Basics: rise of marketplaces, definition
  • Different types: comparison, search engine, theme portals, local platforms, opened platforms, auctions, marketplaces
  • Advantages: increased sales, cross-border, brand awareness, other (e.g. fulfillment).
  • Disadvantages: fees, price transparency, customer ownership
  • Trends: increased outlet function, diverse logistic models, new omnichannel optimization tools, source for big data, catalyzing internationalization.
  • Selecting marketplaces: marketing, commercial and operational/IT criteria
  • Price & inventory management: match competitors, generate traffic and reduce inventory.
Logo Ecommerce Foundation1.png 40