How Marketplaces Rose to the Top of the Food Chain

Ally Feiam By Ally Feiam | 06 Jun 2019

Amazon, Catch, MyDeal, Kogan – the online marketplace landscape is rapidly evolving and adapting, as are consumer’s needs. Research reveals what consumers really want from online marketplaces, and if it’s worth retailers investing. 


Online marketplaces have become one of the most popular platforms for online retailers. A few years ago, online marketplaces were a ‘blip’ on the radar, but now they’re everywhere. From Catch to Amazon, there is a myriad of choices for consumers to assess.

In the new Spotlight Series Report from Power Retail, Marketplaces: Eating the World, the company’s data and insights team delve into the shift in the marketplace landscape, investigating the importance of cross-border growth and how retailers can satisfy the ‘discontent’ consumers.

In the digital shopping age, customers have access to everything at their fingertips. Whether it be stock availability to competitive pricing and delivery rates, consumers now have the ability to unlock facts and figures about the major marketplaces and online retailers with the touch of a button. Despite the urgency behind riding the marketplace wave, the rise of FOMO (fear of missing out) from retailers to get into the online marketplace landscape may not be considered a wise decision, according to new research.

In fact, the current status of global marketplace organisations as a ‘default’ choice may be challenged in the next 12 months. So, what does this mean? “Online retailers should consider retaining flexibility in their commitment to global marketplace organisations,” explained the report.

John Barkle, CMO of MyDeal.com.au, explained the importance of reaching a mass audience of online shoppers: “Being able to reach a critical mass of online shoppers in a lost cost framework is what has put marketplaces in vogue. In order to continue to grow their customer bases, marketplaces will need to continue to invest in innovation, people, knowledge and technology and use these vital assets to continue to win the customer. Marketplaces are only as strong as their customer bases – which is why online retailers seek out marketplaces as new sources of sales revenue.”

As demographics and characteristics for each online marketplace differ in relation to age, gender, household structure, categories and average basket size, it’s important for online retailers to consider their brand and which product range will ‘fit’ into any given marketplace.

Despite its growing popularity, some issues have arisen in the global marketplace landscape. One of which includes the change in commission charges in the face of anticipated market disruption, and the change in prices as a result. According to the report, online retailers competing against or selling via online marketplaces must convey ‘saving money’, but should also maintain a strong focus on the ways they wish to convey the message to its consumers that flatters its brand and voice.

“Online marketplaces focus on price because their customers focus on price. There are various case studies and opinions in the industry that proclaim discounts on RRPs are paramount online. It is price differentiation that gave e-commerce its original value proposition,” explained Barkle. “Larger brands (especially brick-and-mortar retailers) do discovery and inspiration very well but are let down by high search costs. Merging price, range, discovery and inspiration make for a very powerful value proposition to the consumer.”

In Power Retail’s latest instalment of the Spotlight Series, Marketplaces: Eating the World, are further insights into the fast-growing platform. The report covers in-depth knowledge of categorisation, omnichannel approaches, marketplace purchasing and online retailer participation.

For further insights into the metamorphic marketplace landscape, as well as other investigations into the Australian e-commerce industry, take a dive into the Spotlight Series Reports on Returns: The Profit Killer? and Last Mile Delivery: A Race Against Time?

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