How brands can keep (or catch) digital marketplace momentum
Bobby Stephens and Surya Saurabh
Brands that don’t take marketplaces seriously now may find themselves in the same position as businesses that once dismissed e-commerce as a novelty.
Digital commerce boomed in 2020, which comes as no surprise to anyone who witnessed groceries regularly appearing on neighbors’ doorsteps or who collapsed countless cardboard boxes in their own recycling bins.
The rapid shift to digital commerce was born of necessity and safety in the early days of the pandemic, as consumers under stay-at-home orders adopted new ways of shopping. Yet the momentum in e-commerce proved tenacious even when pandemic restrictions eased up, with many people clearly not just sufficing with online shopping but in fact gravitating to it. All told, e-commerce sales soared 44 percent in 2020, reflecting the strongest single-year growth in two decades.
Amid this uncommon growth in an uncommon year, digital marketplaces—where multiple brands list and sell their products and services—saw even more exceptional growth, with gross merchandise value up 81 percent year over year, according to a recent, comprehensive report on marketplaces by Mirakl. In other words, digital marketplaces outpaced general e-commerce nearly twofold.
Why were marketplaces successful in 2020?
What is it about marketplaces that made them so compelling? Certainly, many shoppers were already familiar and comfortable with established marketplaces run by the biggest names in e-commerce, with their wide selection across multiple categories. But another kind of marketplace emerged in 2020 as well: nimble brands that quickly innovated by creating their own digital marketplaces. With this new breed of marketplace, brands of all sizes not only sell their own products and services but also offer a curated selection of third-party products and services complementary to their own. Third parties are charged a commission for every sale and are typically responsible for their own fulfillment logistics.
The success of the marketplace can be attributed to several factors:
Can 2020’s marketplace growth be sustained going forward?
The answer is yes, albeit at a tempered pace. We see a parallel between today’s digital marketplaces and the first e-commerce websites of 20-some years ago. Brands that don’t take marketplaces seriously now may find themselves in the same position as businesses that dismissed e-commerce as a novelty.
Here are the questions businesses need to ask to catch the momentum of digital marketplaces—or, for those already riding the marketplace crest, to sustain their growth:
Marketplaces proved themselves in 2020 as places where customers could find what they wanted—which, increasingly, is the ability to buy multiple products on reliable sites where offerings are available and frequently refreshed. In this new era of e-commerce, proactive brands need to ask themselves the right questions in order to carve out a marketplace strategy that attracts and retains loyal customers and drives revenues.
Want to develop or fine-tune your own marketplace strategy? Get in touch with Bobby Stephens to learn how Deloitte Digital can help.
Bobby Stephens, Principal, Deloitte Digital is a leader in Deloitte Digital’s Retail & Consumer Products practice. He has nearly 20 years of retail and e-commerce operations, consulting, and startup experience in the United States and abroad. He focuses today on working with clients to drive revenue growth through digital transformation and customer engagement.
Surya Saurabh, Senior Manager, Deloitte Digital is a results-driven leader in Deloitte Digital focused on helping clients leverage digital technologies for profitable business growth. Surya leads large e-commerce transformations, primarily focused on the Retail and Consumer Products industries.