Why There’s Room for Everyone to Profit in the Marketplace Landscape

Image credit: John Schnobrich via Unsplash

Digital marketplaces are impossible to mention without bringing to mind the global giants that pioneered this paradigm: Amazon and Alibaba. There's a good reason for this prominence. Both of these eCommerce trailblazers are dominant in their markets of origin, with Amazon accounting for an estimated 48% of US e-retail spend in 2023, and Alibaba claiming 53% in China during the same period.  

Surely, with the clear dominance of major players in this space, there’s little space for brands to carve out their own corner of the Marketplace landscape? This inclination could not be further from the truth. When Brands and Retailers approach their marketplace presence as an integrated component of their commerce and marketing strategy, they will attract and retain more customers, grow an international customer base, fuel growth through data, and capture new revenue streams. 

Expanding beyond a core audience base

While direct-to-consumer platforms target a single customer base that is confined to the platform’s existing audience, marketplaces multiply reach and deliver higher conversion rates. In addition, by opening their platform to third-party sellers, curated and generalist brands and retailers can offer a greater depth of catalogue that makes them more likely to retain this expanded customer base. They can offer this greater assortment of product without the bottom-line risks and responsibilities associated with higher inventories, such as selling heavy or bulky items, highly seasonal products, or categories that haven’t been tested with their target audience.  

Global expansion opportunities

As brands and retailers’ audiences expand, they’re presented with an opportunity to tap into new customer bases in different countries, breaking through the virtual barriers that local retailers often face. With this increase in foreign transactions, brands and retailers can better operate at scale, making it more economical to adapt to new payment methods and logistics to serve new markets and ultimately expand their business. 

Unlocking growth through data

By driving new traffic, marketplaces allow brands to obtain transaction data and customer insights that allow them to better understand larger audiences and ultimately fuel core objectives and top line growth with data. Brands can view marketplaces as a complementary component of their digital advertising strategy, allowing them to acquire data and insights effectively and economically.  

Capturing new revenue streams

By growing profitability through media activation, retailers can implement a digital advertising solution on their platform, allowing advertisers to programmatically buy display and video ads. This opportunity is significant, with retail media spending already a $125 billion market globally and forecasted to surpass spending on TV advertising by 2028. Monetizing a marketplace can unlock new revenue for brands and retailers by allowing them to tap into this fast-growing space.  

Creating a tailored marketplace is easier than ever.

While the benefits of creating a marketplace are clear, initiating a curated direct-to-consumer platform can seem incredibly complex, bringing new requirements around seller onboarding, third-party catalogue integration, quality control, and customer care. However, purpose-built technology solutions make it possible to manage these processes while ensuring a consistent, high-quality customer experience at scale.  

When assessing the best media partner for your brand, it’s essential to look for an agency that not only has a dedicated commerce practice, but has access to technology and leading industry partners that create a marketplace experience that is tailored, economical, and effective, establishing the marketplace strategy that delivers against your growth objectives.