Jitterbit has revealed the results of its latest in-depth targeted study, ‘eCommerce Marketplace Strategy: The Power of Hyperautomation.’ The company says its the first survey of its kind. Revealing the views of European retailers across the UK, Spain, Germany and the Netherlands in executing and expanding their marketplace presence.
The report highlights the evolution of marketplaces. According to the Centre for Economic and Business Research, revenue from marketplace sales grew 9.4% year-on-year, outstripping the 7.4% growth of companies without a marketplace presence. Enabling this marketplace growth – and the transformation of the way consumers like to shop – is integration technology. Connections between vendors and marketplaces, connections between logistics and payment services, and other integration required to deliver the customer experience.
However, as the marketplace market expands, managing and maintaining the multitude of connectors between solutions becomes challenging. Manual data processes creep into operations. Fulfilling peaks in demand is difficult. Supply chain issues emerge, logistics break down, and customers leave poor reviews. Gartner’s trend of hyperautomation report speaks to this challenge. The study outlines the only solution for businesses wishing to stay competitive and scale – removing all manual data processes from within the organisation by fully automating integration.
European retailers embracing marketplaces
The majority of European retailers have wholly embraced marketplaces into their go-to-market strategies. 95% are already trading on at least one marketplace – Amazon (18%), eBay (14 %), Etsy (8%) and Wayfair (6%) are cited as the most popular.
88% of retailers were considering building their own marketplace, with one-third benefiting from a sales boost due to marketplace trading. Despite widespread optimism, 78% of all retailers said they found trading on marketplaces challenging, with the top reasons being:
- Hard to keep data accrued on a marketplace secure – 76%.
- Too many disparate systems used to trade on marketplaces – 88%.
- Challenging to get a complete picture of business activity when trading on marketplaces – 70%.
- Marketplace presence creates data silos within the company – 73%.
- Trading on marketplaces creates stockouts and inventory problems – 79%.
- Challenging to stay on top of fulfilment and refunds when trading on marketplaces – 89%.
Alarmingly, 83% of retailers admitted to still having more than 10 manual data processes in their marketplace tech stack. More than half (58%) have more than 20, and 31% have 31 or more. Furthermore, 77% of retailers believe they are less competitive in the marketplace than other companies due to cumbersome and disparate systems creating data silos.
Marketplace momentum here to stay
Joost De Bot, Vice President & General Manager EMEA at Jitterbit said, “There’s no doubt marketplace momentum is here to stay. Successful commerce leaders of the future must act swiftly to adopt or optimise their strategy to stay ahead. Integration, specifically enabling hyperautomation by removing all manual processes, will undoubtedly play a crucial role in enabling marketplace players to overcome current trading challenges and remain competitive.”
Yet optimism remains high, with 61% of retailers agreeing that although trading on marketplaces is challenging, it is also manageable. 100% of retailers in the study expect to continue trading on marketplaces within the next five years.
Retailers are making strides to overcome current challenges and know they need better integration and automation. 99% of respondents said they are already using one automation tool as part of their integration marketplace strategy. Looking ahead, 53% are likely to incorporate an integration solution into their marketplace strategy in the next five years.
Jitterbit commissioned third-party independent research company Vitreous World to survey 200 eCommerce and retail leaders in the UK, Spain, Germany and the Netherlands. The research explored the opportunities and challenges they face in executing and expanding their marketplace presence.
Enterprise Times: What this means for business.
The “You scratch my back and I’ll scratch yours” phrase pretty much encapsulates relationships in today’s eCommerce eco-system. In this landscape, retailers and marketplaces have a symbiotic relationship. Both retailers and marketplaces rely on each other to maintain their brand reputation and ensure customer satisfaction. With an increasing emphasis on consumer ratings, fulfilment efficiency and product pricing, this relationship has become more complex and dynamic than ever before.
As the report notes retailers need marketplaces to reach a wider audience and streamline their sales process. However, if retailers experience poor service from the marketplace or low traffic, they may seek alternative marketplaces to showcase products. On the other hand, marketplaces must ensure retailers deliver on time and maintain high customer satisfaction. Otherwise, the marketplace brand may suffer if a retailer’s fulfilment fails or the product sold doesn’t meet the customer’s expectations.
The report suggests five interesting takeaways for retailers to scale and secure marketplace success in 2023. For brands and retailers looking to put a toe into the marketplace space, then its definitely worth a read.