We used to shop online for convenience and cost. Now consumers are beginning to shop online for the experience. As global e-commerce sales continue to skyrocket, brands are adding new technology and features that draw customers into a world of their passions and desires, and in the process, drive loyalty and revenue.
The data is compelling.
According to Salesforce, 80% of customers say their customer experience (CX) is just as important as the product or service the business provides. Forrester found CX leaders outperformed those lagging in CX on the S&P 500 index by nearly 80%.
Additionally, their customers are seven times more likely to return to the company, eight times more likely to try other products or services offered, and 15 times more likely to spread positive word of mouth. This Global State of Customer Experience Report cites 68% of responding CX experts strongly believe that expectations from customers are rising.
Gartner reported more than 80% of companies are expecting CX will be their primary differentiator now and into the future. And lastly, Forrester predicts there will be a 40% increase in digital customer service interactions in 2021, and to accommodate this activity, brands will add more channels (growing their channel ranges from eight to 11, on average).
An emerging e-commerce strategy that supports CX goals is the development and implementation of a third-party marketplace where goods are fulfilled by third-party suppliers.
The Emergence of Third-Party Marketplaces to Support CX
One of the many benefits of third-party seller-driven marketplaces is they connect retailers with an intent-driven audience. This is where we see some of the greatest opportunities for retailers and brands: using their websites to curate unique experiences around particular topics or interests.
"Driving positive customer experience is a priority for all of our clients, no matter what industry they are in. We are definitely focused on third-party marketplace opportunities for the brands we work with and how they can be used to deepen relationships between our clients and their valued customers to meet their expectations. One area where we see a great deal of potential is the ability to curate highly-unique experiences — either ongoing shopping environments or pop-up type stores tied to events or seasonality. Third-party marketplaces will likely become a key component of any e-commerce solution,” said Jon Panella, group vice president at Publicis Sapient.
Many highly-regarded American and global retailers, such as Anthropologie, Michaels, Target and Walmart, are already harnessing the power, and reaping the benefits and effectiveness of, third-party marketplaces to bolster existing e-commerce strategies, first-party data sets, and customer satisfaction.
According to e-commerce platform developer Shopify, third-party marketplaces now account for half of the $5.86 trillion in global e-commerce sales volume, with the top 100 marketplaces raking in nearly $2 trillion in combined annual sales in 2020. Trade publication Retail TouchPoints reported the number of third-party marketplaces increased 81% year over year (YoY) in the fourth quarter of 2020, a figure more than double the already-impressive growth rate of international e-commerce.
Creating experience-driven shopping with third-party marketplaces means bringing together a wide range of product categories into an experience-driven event. If you’re selling coolers, why not offer a seasonal pop-up for fall camping stocked by third-party sellers offering complementary products outside of what’s in the brand’s warehouse? You could bring in retailers like SoloStove, Rumple blankets, products for hiking, and so on.
Sports and outdoor is a strong-performing vertical, and one third-party marketplaces can integrate easily into commerce efforts. There’s an established community, fan base and products that accompany the experience of enjoying a watched sport or outdoor activity.
FishBrain, a wildly-popular fishing app with more than nine million users, recently added a third-party marketplace layer to their offering. Fishing equipment, accessory and apparel brands are now able to directly connect with a hyper-targeted audience with high intent. This highly-engaged community can now find everything they need for their passion/hobby in one place, and it’s housed within the walls of a trusted and beloved company, with loads of accessible feedback from like-minded peers. For most of these brands, this was their first direct B2C connection to their customers.
The financial benefits to retailers are obvious: larger shopping carts leading to increased sales. Perhaps, the greater advantage is more psychological and rooted in consumer behavior. By delivering an important, value-added service to their customers, companies are able to cultivate deeper brand loyalty among them.
Why? Because the most likely consumer response to this experiential approach is, "I feel like this retailer understands me and my needs and wants, and it’s saving me time (and money, perhaps) by being a one-stop shop." This same thought process also extends to a shopper's passions, interests, hobbies, and recreational communities to which they belong. Research has proven that, over time, strong brand loyalty and connection lead to greater revenue per customer.
Third-party marketplace strategies are about far more than simple product range extensions or endless aisle implementations. Rather, it’s a much more holistic, customer-focused methodology which lies at the essence of conversation, intelligently curating a range of product categories into life and seasonal experiences that matter, and ultimately delivers a real service to customers with real value. It opens the consumer’s eyes to other things they may need, or want, but had not previously considered.
Creating and maintaining a great, not just good, online CX is becoming more critical as e-commerce sales continue to grow. Third-party marketplaces play an important role in this ecosystem, especially since they enable retailers to enhance the online CX in multiple, meaningful ways, while creating deeper loyalty with, and providing real value to, consumers constantly searching for better and richer life experiences.
Jim Stirewalt is president of Marketplacer U.S., a global technology developer that empowers companies to create third-party online marketplaces which bring buyers and sellers together through common interests, passions or hobbies, and generate additional revenue by selling products they don't own or control. You can connect with him on LinkedIn and reach him via email at [email protected].