• by Jack Loechner , Staff Writer @mp_research, January 17, 2017

Marketplaces provide a new way for retailers to interact and engage with customers, offering a broad assortment of products and services at competitive prices, and have quickly gained traction as an extension of retailers’ eCommerce pursuits.

According to a study reported by Internet Retailer, commissioned by Mirakl and ChannelAdvisor to Forrester Consulting, retailers are rethinking their eCommerce engagement strategy to respond to customers’ new shopping behaviors. The study found that marketplaces are likely to boost customer loyalty, increase average order values, and build trust.

To explore this, Forrester conducted a global survey of 2,520 consumers who have shopped on multiple online marketplaces in the US, the UK, France, or Germany. In addition, retailers were involved who had their own marketplace or were selling on marketplaces, including a marketplace manager, two marketplace category managers, an eCommerce manager, and a director of online retail. Each interviewee had influence on his or her organization’s marketplace strategy.

The report shows that a marketplace must meet or exceed customers’ expectations to be successful. Customers are comfortable shopping with familiar and even unfamiliar sellers in marketplaces, but they are not afraid to leave negative ratings or reviews if their needs aren’t met. Retailers’ marketplace platforms need to allow them to closely monitor and curate the right sellers. Retailers’ marketplaces need to deliver consistently high-quality service, says the report, or risk the wrath of online reviewers and potentially undermining the trust they have established with their customers.

Forrester’s study yielded four key findings:

• Adding a marketplace will enhance customers’ shopping experiences. The study revealed that online consumers shop on marketplaces at least three to five times per month, as the marketplace allows consumers to explore, discover, and purchase multiple products and services on a single website.
• Building trust is a central part of marketplaces. User- generated content, such as product reviews, influences shopper buying decisions. This visibility into product and seller performance builds consumers’ trust in a seller, even if the seller is unfamiliar to them, notes the report
• Consumers are able to differentiate between the retailer and marketplace seller. If consumers have a poor shopping experience, they are able to identify what went wrong and why. Two-fifths of consumers who have had an issue with their marketplace purchase say that they would not purchase from that seller again but would shop with that marketplace again
• Marketplaces create deep customer relationships. 90% of consumers said they were satisfied with their purchase from a marketplace, resulting in increased loyalty.

Consumers are more empowered now than ever before, says the report. They want what they want, and they want it now. If online retailers don’t react quickly to meet customer demands, they risk losing that customer to a competitor that will. Forrester estimates that US eCommerce will total $373 billion in 2016, approximately 11% of overall retail. To survive in this competitive and growing market, online retailers must offer a broader selection of products and services, deliver competitively priced products, and offer a variety of shipping options, opines the report.

The study found that consumers prefer online marketplaces over traditional retailer sites because they offer:

• Competitive prices. Multiple merchants sell the same product on a retailer’s marketplace. Therefore, to compete for more customers and address their customers’ needs, merchants offer competitive prices. Over 70% of consumers indicated the importance of marketplaces offering competitive prices when shopping on them.
• A deep catalog of products. Marketplaces enable retailers to quickly expand their product and service categories and sub-categories for consumers to browse through. Consumers seek marketplaces that have a variety of products and services (56%).
• Flexible and cheaper shipping. 63% percent of consumers indicated that lower shipping costs are very important when they make a purchase on a marketplace. 32% percent of consumers surveyed said that having more shipping options available to them is also a key benefit when they shop on a marketplace.
• Better overall experiences. Consumers who have poor experiences will shop elsewhere, so it is important to provide a smooth and straightforward shopping journey. Consumers want a marketplace that is easy to navigate (53%), offers a smooth checkout experience (46%), and has user-friendly account management (40%).

The report summarizes, noting that marketplaces are here to stay. They offer retailers a way to capture new revenue through commission on sales, without the headache of storing and shipping items themselves. Retailers need to develop a marketplace strategy to seize this opportunity, or they will face difficulties remaining competitive with limited product variety. Companies may struggle to develop a marketplace without a commitment to the technology, people, and processes that will enable it to thrive.

To access the complete report please visit here.