The popularity of marketplaces is growing steadily and this trend is reflected in the number of online marketplaces popping up throughout the retail industry. In the D-A-CH (Germany, Austria and Switzerland) region alone, the number of marketplaces (B2C) has increased by 40% to 214 marketplaces in the past two years. 1
This article examines the marketplace format and shows how personalization improves the shopping experience on marketplaces or, to use a metaphor, "rolls out the red carpet” for customers to find the product offer that best suits them.
What are marketplaces?
Just like a weekly market, or an actual marketplace, where various merchants offer their goods, a virtual marketplace also brings together a variety of online merchants in one digital place. For customers, this format offers significant added value in terms of choice, as they can find many products and brands bundled in one place. The format also offers retailers various advantages. For example, these retailers do not have to build up their own infrastructure online, the marketplace itself builds up visibility as a multiplier and stationary retailers without their own online store can also sell products there.
There are two types of marketplaces that have unique distinctions from one another. A marketplace can either be horizontal or vertical in nature. In a horizontal marketplace, all types of products are available to consumers, while in the vertical variant, only products from a specific segment are offered.
More and more retailers are turning to marketplaces
As a retailer, you must weigh the pros and cons of relying on the marketplace format. Yet, the growing presence of marketplaces available and the popularity among users provide clear proof of the opportunities that exist on marketplaces. In fact, the number of marketplaces online has tripled from 2015 to 2022. 2
One of the first and most recognizable marketplaces is eBay, but many others have followed in eBay’s footsteps. The largest marketplaces like Amazon and Alibaba are now indispensable. Etsy is also known as a unique marketplace where small businesses offer their self-made products. Another recent example is OTTO. Since mid-2020, the company has been offering retailers and brand manufacturers the opportunity to offer their products via the online presence of the mail-order giant with OTTO Market. Lastly, with Douglas, the product range of the health beauty provider is now broadly diversified. Brands such as Butlers and Marc O`Polo offer products in the "Home & Lifestyle" category.
Personalization as a sales lever for customer loyalty
Retailers that provide personalized offers and experiences create positive customer relationships that make a key contribution to ongoing loyalty and other key performance indicators. Despite personalization beginning primarily in e-commerce, this tool is now also being used in stationary retail to offer customers special services. Marketplace operators are also aware of the benefits of personalization and they rely on personalized spaces to convert their visitors into active, returning customers.
Seven ideas for a personalized shopping experience on marketplaces
Retailers can implement a personalized customer approach on marketplaces in several ways, including:
1. | Offering different product recommendations on home, category or product pages.
2. | Personalizing content that informs, entertains, advises or inspires. Click here for more about content personalization.
3. | Creating strategic product bundles, i.e,. two or more products in combination that relate to each other or relate to the customer.
4. | Adding meaningful product recommendations to the wish list that matches the customer's taste.
5. | Personalizing banners to create visually appealing content that promotes purchases.
6. | Incorporating visually similar items on the item detail page, shopping cart and notepad to offer customers added value through alternatives.
7. | Personalized newsletter campaigns or order confirmations with new shopping ideas that appeal to customers.
Furthermore, it makes sense, especially for online marketplaces, to play out brand-specific recommendations in the respective shop area. For example, if a customer looks at backpacks and filters by a certain brand, product recommendations should favor backpacks of the same brand. The marketplace operator can offer this to their co-merchants as a benefit to keep the customer interested in the specific brand.
In addition, some marketplace operators also take the opportunity to offer co-merchants additional space with personalized recommendations from the co-merchant's product range. In this way, the co-merchant can actively push its own products.
Would you like to learn more about personalization on marketplaces or in your own online shop? Contact our expert Mr. Personalization on LinkedIn or via email This email address is being protected from spambots. You need JavaScript enabled to view it..
1) and 2) https://www.ecom-consulting.de/marktplatzwelt-2022/
