Christian Gees, Director of Sales EMEA at Rithum, discusses the growth of ecommerce channels and why managing multiple marketplaces, and making a profit, is essential for brands in today’s world.
Third-party commerce (3P) is growing. Current projections estimate that the UK e-commerce market, currently valued at approximately £220 billion, will reach around £588 billion by 2029. The proliferation of third-party marketplaces globally is reported to be heading towards accounting for almost 60% of online sales in the next three years. Marketplaces will play a significant role in this growth, and 3P commerce allows brands to reach consumers directly through these marketplaces.
However, it can be difficult for brands to effectively manage their presence across multiple channels. That’s why more brands are considering outsourcing marketplace management to reduce risk, adapt to market and consumer demand changes, and maintain smooth operations.
Why are marketplaces becoming more popular?
Consumers want more choices before committing to a purchase. A substantial 82% of global shoppers visit two or more websites before buying, according to the 2023 Online Consumer Behavior Global Report by Rithum and research firm Dynata. 72% of consumers said they would look even further, exploring two to four websites before purchase.
With consumers shopping around, marketplaces inevitably are becoming more popular. A recent study by Forrester and commissioned by Rithum found that 77% of brand leaders claim online marketplaces are growing faster than their traditional sales channels. This has often been an entry point for new-to-market brands and now long-standing flagship brands are reconsidering their go-to-market strategy. To meet consumers where they are, brands are looking at 3P commerce models to scale efficiently and fast.
Scaling at speed
The requirements to become successful have escalated at a rapid rate in the last ten years. More brands are seeking consultancy or agency support to effectively pursue marketplace success.
Outsourcing marketplace management to a single platform connects retailers’ product listings, inventories, and order systems with major sites like Amazon.com, eBay, and John Lewis, allowing centralised control and real-time updates. This creates more choices for customers, provides a smooth buying and selling process, mitigates inventory risks like stock-outs, and helps businesses achieve profitable growth faster.
While the benefits of scaling to a new marketplace are significant, doing so in-house can be cost prohibitive and time consuming. By outsourcing marketplace management to a single platform, brands and retailers can leverage years of experience, a quality network of suppliers, and cross-channel insights, allowing them to focus on managing performance. This is useful when adapting to changes and requirements to launch with marketplaces like Zalando, Nordstrom, and others.
Three benefits of selling through third-party marketplaces
Marketplaces are a rapidly growing channel and present an opportunity for brands and retailers to expand quickly and profitably. Third-party marketplace services drive business resilience in three ways:
- Access to valuable data and expert support: Third-party marketplace services provide a wealth of data, showing what customers are buying, how sales are trending, and market dynamics. This information helps businesses make smart decisions about inventory, pricing and promotions. A team of experts help retailers comply with regulations and optimise their listings, reducing the risk of costly mistakes.
- Reducing risks and increasing flexibility: Third-party marketplace services help reduce the need to own large inventories and eliminate markdown risks. If a retailer runs out of an owned SKU, cross-channel strategies on marketplaces allow suppliers to fulfil orders on multiple sites, mitigating stock-out risks.
- Reaching new customers and improving efficiency: Each marketplace has its own audience, giving retailers a chance to reach new customer segments and boost brand awareness. Marketplaces services streamline operations by centralising order management, inventory tracking, and fulfilment processes, reducing errors and saving time. This efficiency allows businesses to respond quickly to market changes and customer needs, maintaining business continuity and fostering innovation.
Third-party marketplaces are essential for long-term success. It’s time for brands to explore the benefits of third-party marketplaces and embrace this strategic method for a resilient future.
