A recent consumer survey revealed that consumers are flocking to ecommerce marketplaces for online shopping. In this interview, Ware2Go CEO Steve Denton shares insights for merchants looking to leverage third-party marketplaces to increase brand exposure.
Hey, Steve.
Hey, Megan.
Great to sit down with you today.
Hey, I’m excited to be here.
Awesome. Well, so Ware2Go’s marketing team recently released our 2023 eCommerce Marketplace Report. It was filled with great insights, lots about how consumers are evolving their shopping habits across marketplaces. And when we pushed it out, we got a handful of questions — social media, prospects, clients. They’re wondering how can merchants simplify selling across multiple marketplaces while taking advantage of the opportunity? So that’s what I’m hoping we can dig into today.
Let’s get started. Awesome.
So as a starting point, why is multi-marketplace selling an advantage?
Oh, geez. I mean, look, I didn’t invent this. We were talking to Bob Schwartz a couple weeks ago in Commerce Conversations, and he said this amazing thing. He said, “Marketplaces are the new marketing muscle for e-commerce,” and I think that that’s spot on.
And why is that? Well, I think you have to look at a couple of trends. A third of all consumers are reporting they’re going to do at least half of their online shopping through a marketplace. So you can’t really ignore that audience. And let’s unpacked that a little bit more. 89% of the consumers say, “I’m going to shop from two or more marketplaces before I make a purchase decision.” So if you really think about marketplaces being the new muscle for commerce, it’s also the new search engine for commerce. And it’s where consumers are discovering products or doing comparisons. You see more and more marketplaces curating content around that. So I just don’t think you can ignore it and be successful today, but I think those that are early adopters and move quickly on it are going to have an unfair competitive advantage. So I think it’s critical for success in today’s commerce landscape.
Yeah, definitely an opportunity. Having a presence across multiple marketplaces is somewhere that merchants should be, is what I’m hearing.
Yeah.
So what strategies should merchants utilize to maximize those results?
So it’s a great question, because you got to start with the inventory. The inventory, when you’re going to sell in multiple marketplaces, inventory management and understanding where the inventory is and what SKUs or where and what amounts and having them closest to the consumers is really critical.
So a couple of strategies would be to either, you know, you can either quarantine some of your inventory or an industry term might be ring-fence it, so making certain amounts of inventory available to certain marketplaces for certain period of times is really critical. And then the other thing you need to be thinking about there is some of the requirements that these marketplaces have. There’s so many different requirements that they have and being able to adhere to their labeling requirements or their shipping requirements or their speed requirements, that’s really hard to do. So you got to be on top of that.
And then I would say, lastly, think about holding some SKUs back that are just available through your own website, because 63% of all consumers say they would prefer to buy directly from the merchant. Now, what’s an interesting thing about marketplace strategies is they are. They just don’t know it at the time. But what’s a really bad thing is when you blow out a great SKU through a marketplace where you might have it at a higher price point or a better margin on your own website, and not having the inventory available to do that. So quarantining or blocking off some SKUs that you’re going to have only available through direct nav on your own website is a critical part of that strategy as well.
Yeah, so thoughtful strategy is part of the equation here.
Uh-huh.
So let’s discuss the challenges that that can create. What are the complexities of selling across multiple marketplaces?
Oh, geez. Well, I already hit on one, actually two, right? So inventory is, it’s complex, especially when you’re working in multiple warehouses and you might have multiple WMS systems or multiple 3PLs involved in this, staying on top of the physical inventory but also the virtual inventory, the puts and takes of what’s happening with your virtual inventory. So inventory management is really critical. We talked about that.
We talked a little bit about shipping requirements or labeling requirements that are going to take place. So you’re going to have different labeling requirements from, say, if you’re working on a Macy’s marketplace versus Wayfair. You’ve got just this different types of requirements that are going to add complexity to that. Pricing requirements are going to add some complexity to that. Speed, shipping speed, and then there’s data. So you’ve got different rules and regulations around consumer privacy, who owns what. Does the merchant own the data? Does the marketplace own the data? And just set all that aside, but the data requirements from the various marketplaces, the data requirements based on what country you’re selling in or what state you’re selling in. So being on top of that is really challenging and complex, and you’re going to have to stay on top of that.
And then equally important is just visibility and reporting. When you think about today’s connected consumer, transparency is really important. We talk a lot about speed and certainty, which really comes from transparency, and having that transparency is critical. And also the reports that are available to you as a merchant so that you can understand what do those shipping speeds look like? What do those fill rates look like? Because that’s going to ultimately drive your customer sat or your NPS score and your opportunity to get a second bite of that apple. So those are four complexities that need to be addressed, and certainly complexities that we help customers solve at Ware2Go.
Right, right. So it’s not easy. You’re managing multiple marketplaces, different requirements, different data, reporting and visibility. So I think it’d be helpful for us to dig into ways to simplify this equation. What should merchants consider when simplifying selling across multiple marketplaces? Are there options?
Well, yeah, and the other thing we didn’t even talk about is technology,
Right, right.
Right, so-
Well, that can be the equalizer, right?
It can be, but different marketplaces have different implementation guidelines and there’s different technology requirements to integrate into one marketplace versus another marketplace. So when I think about one of the things to simplify that is look for a partner. And one of the ones we work with here at Ware2Go is a company called Mirakl. So think about Mirakl as a marketplace in a box. They’ve got partnerships with tons of these merchants and branded manufacturers and retailers and grocery stores, basically places that have a lot of traffic or a lot of visitors, and they want to offer an endless aisle. Instead of going and doing it on their own, they partner with someone like Mirakl, who sets up the technology to offer that, and then has a roster of branded manufacturers, product producers, things like that, to provide the goods in that endless aisle and do it without the merchant having to carry the inventory cost on that.
So finding a partner that can help you navigate that and get you into multiple marketplaces so you can test and learn is certainly one way to do that. Simplifying your supply chain is really, really critical thing that you need to do here. You can’t have multiple 3PLs working against this and inventory in multiple locations. You really need to streamline where… where’s the inventory going to come from that’s going to feed the marketplaces? So you can keep that straightened out. So technology integrations, inventory or partner integrations allow you to do that.
And then lastly, this is an integrated advertising and performance program in the sense that a lot of people look at marketplaces as an opportunity to work almost for free. Well, it’s not for free. We’ve already talked a little bit about it’s the new search engine. You’ve got to be able to convert there to make that relationship worthwhile for the parties that are involved. You have to drive a great consumer experience or else the marketplace provider’s not going to want to work with you anymore. So really integrating your advertising campaign there along with a great consumer experience is going to be critical to be able to simplify that and make that successful for you.
That brings us to Ware2Go. We work with many clients that are managing omnichannel, multi-marketplace sales, right?
Mm-hmm.
And we help them do it.
Lots of them.
How does Ware2Go help?
Right. I think the first thing that we do here at Ware2Go that’s really important is we’ve already done the integrations into most of these channel partners. So we’ve already integrated into these marketplaces. So it saves you on the technology implementation in terms of speed and cost, but you also know it’s done properly. So that’s really critical. You’re not running it off multiple platforms. Your marketplaces and your fulfillment strategy can all run off one single platform at Ware2Go. We’ve done that work. So that’s great news.
The second thing we do to help our clients win in this space is we have this flexibility built into our network model. Most of our merchants are sitting in two, three, four warehouses, and as demand increases or inventory shifts, having the flexibility to pivot to different warehouses or pivot into different regions of the country based on what those demands are is going to be really critical.
Thirdly, shipping optionality. Some of these marketplaces require overnight delivery for a certain percentage of the consumers or a certain percent gets second day. But that’s not good enough anymore. You’ve also got to have sustainable green options. You’ve got to have very low-cost, slow options. You’ve got to have shipping delivery optionality, and that’s already built in to what you get with Ware2Go.
Three more points I’ll tell you how we help people out, is one, we work with an amazing amount of integrated marketing partners. So whether you’re working with someone like Whitebox or NetElixir or any one of the marketing partners that we are integrated with, you know, you really have to integrate your marketing ad spend and your marketing strategy into this channel strategy. And if they’re not connected, if your agency doesn’t have visibility into your inventory, then how do they know to do things like let’s do a great sale.
I’ll give you a great example. Let’s say you got a ton of inventory in Vegas and you need to move it. Well, why wouldn’t you offer free overnight shipping to anyone that’s in California or Nevada or any of the states where you can get one- to two-day ground at a lower rate? You could actually offer a deal there. So the integrated marketing partners in that strategy is really critical.
And then two last points is, we’re already set up for SFP, Seller-Fulfilled Prime, so we already meet the requirements for that. And if you’re going to talk on marketplace strategy, you can’t ignore Amazon. You’d be foolish to ignore that. So having SFP requirements already built in to where to go, you retain control. You retain control over your brand, you retain control over your data, and that entire end-to-end customer experience. So those are six areas that we help merchants compete and win in this new muscle of marketing commerce online known as marketplaces. And I’m proud of the work we do and our merchants are winning because we’re helping them win there by simplifying that supply chain for them.
That’s great. This has been really great. Lots of actionable insights here.
I hope so. I hope so. But thanks for taking the time. I enjoyed our conversation, and I hope everybody looks into the marketplaces report that the team generated. Lots of great insights there, and let us know how we can be helpful.
