Consumers Take To Online Marketplaces, Survey Says

Consumers are increasingly gravitating toward online marketplace formats for greater convenience, value and variety, according to a survey of 9,000 consumers around the world.

The survey, called “The 2022 State of Online Marketplace Adoption,” was released Thursday by Mirakl, an SaaS platform for engineering online marketplaces, but conducted independently by the Schlesinger Group research firm.

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Consumers from Australia, Brazil, France, Germany, Italy, Singapore, Spain, the U.K. and the U.S. — 1,000 in each country — were contacted in October 2021 and asked about their shopping habits and preferences.

Among the key findings:

  • Two-thirds of consumers prefer e-commerce sites with online marketplaces; 70 percent said online marketplaces are the most convenient way to shop.

  • On average, consumers conducted 42 percent of their online shopping through marketplaces in 2021.

  • “Power shoppers,” defined as high-value customers who make purchases online at least once per week, are more inclined to utilize online marketplaces.

  • On average, U.S. respondents said 43 percent of their online shopping happens on marketplaces; 40 percent said their activity has increased in the past 12 months; 54 percent said their activity has remained consistent, despite the reopening of brick-and-mortar stores.

“This first global study on consumer preferences for marketplaces offers important insights for retailers as they evolve their e-commerce strategies for a post-pandemic economy,” said Adrien Nussenbaum, cofounder and co-chief executive officer of Mirakl. “The survey results clearly indicate that consumers want more of their favorite retailers to launch online marketplaces with third-party sellers.”

According to the survey, in 2019, 47 percent of U.S. consumers said they shopped exclusively or often on marketplaces; this number rose to 52 percent in 2020 and held steady at 51 percent in 2021. Ninety-two percent of U.S. consumers expect to use marketplaces at the same rate or more.

Online marketplaces enable retailers to present wider assortments and reach more consumers for digital growth. Conventional e-commerce sites typically offer only offer products from a single brand or retailer.

Marketplaces come in various forms and sizes, but basically three types: c-to-c, such as eBay, which operates an auction marketplace between consumers; b-to-c, such as Amazon, considered business-to-consumer marketplaces, and b-to-b, such as fashion trade shows held online where retailers shop fashion brands.

There are vertical retailers, such as Express and Madewell, that have marketplaces displaying their own branded merchandise as well as merchandise from third-party vendors. There are also pure marketplaces, such as Farfetch, which does not own any inventory.

Brands and retailers operating online marketplaces procure merchandise through a few business arrangements. Typically, brands on marketplaces pay an initial fee and have revenue-sharing agreements with the host marketplace. Wholesaling can also be conducted, while marketplaces simultaneously list products and take orders without actually buying the goods or handling order fulfillment, and then charging the third-party seller a commission based on sales.

While marketplaces enable companies to rapidly grow their offerings and sales volumes, there are risks. Sellers on marketplaces have less control of their brand experiences. Their presentations can be near other brands of inferior quality, affecting perceptions. Brands also risk cannibalizing their sales on one marketplace from another.

In addition, if a consumer orders from a marketplace and gets disappointed by a poor shipping experience (it arrives late or the wrong product is delivered) the marketplace might be blamed and its reputation suffer, even though it could be the fault of the brand handling the shipping.

Also, pricing inconsistencies across marketplaces can arise. For vendors listing on multiple marketplaces, managing inventories and pricing becomes complex. And the profit per transaction is less than what’s generated through traditional wholesaling.

Still, in recent seasons, retailers have increasingly developed marketplace formats, and Macy’s Inc. said it would launch online marketplaces this year for its Macy’s and Bloomingdale’s divisions.

Other findings from the survey include:

  • Despite supply chain issues, 88 percent of U.S. consumers expect their packages to arrive in three to five days or less; 46 percent expect delivery within just one or two days.

  • When buying products from third-party sellers, 59 percent of U.S. respondents research a seller before making a purchase; 72 percent check reviews.

  • Fifty-six percent of U.S. consumers are more likely to shop online with a company offering products tied to causes they care about; 38 percent are likely to pay more for products tied to a cause.

    Source : https://news.yahoo.com/consumers-online-marketplaces-survey-says-150436323.html

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