Catalog Integrity: Trust Your Backend Data and Shift Focus to Winning the Basket

Catalog Integrit Trust Your Backend Data and Shift Focus to Winning the Basket

Algopix has had the privilege of working with some of today’s leading marketplaces including Facebook Marketplace, Google Shopping, Mercari, Walmart, and others. Through our partnerships we have learned what works and what doesn’t, and our goal is to support our partners in tackling their most pressing challenges. So to that end we all know that eCommerce isn’t static. It is why many marketplaces can’t answer seemingly simple questions like:

 
  • Is my catalog data accurate?
  • Am I presenting the most relevant items at the right prices
  • Do I have the right mix of products to please shoppers? 
  • And lastly, how can I target the right sellers for my marketplace so I can keep shoppers coming back time and time again?
 

On December 8, 2021, during a live webinar, we dove into the most popular ways our team works with these marketplaces, starting with the importance of catalog integrity as the foundation of any marketplace business. Read the transcript below and watch the accompanying video.

Trust Your Catalog Data

First, catalog integrity is being able to trust your backend or canonical catalog data to support two fundamental processes for your business. The first is to improve seller onboarding by automating the listing process. This will release the reliance of your sellers to input accurate and robust information creating a frictionless onboarding process: What I like to call, the gold standard.

 

Then the second pillar I’ll touch on is the importance of having the backend data to consolidate duplicate listings of the same product for a better shopper experience. 

 

So let’s start from the beginning with the first pillar around disparate data and insufficient product content input by thousands of sellers, which leads to incomplete, miscategorized and duplicate product data entries. Let me ask you, what is more attractive to a power seller?

  1. A time consuming and manual process that can fall to easy inputs or 
  2. An easy automated and seamless product onboarding experience with recommended inputs that takes the responsibility out of the seller’s hands?

Well, I’ll answer it for you. It’s the latter. Our team has heard from one of the top marketplaces in the world that on average over 25% of sellers’ submissions are declined due to insufficient inputs because they require too much from sellers. This will create inconsistencies from the start.

 

Help Your Merchants Want to Work with You

The first step of the onboarding process input should be automated; where a seller starts typing in the name of a product in which your marketplace immediately starts suggesting products. This enables the merchant to auto-populate the product information.

 

Now, why is this important? As a marketplace it is your responsibility to make this process as easy as possible, to make your merchants want to work with you. This right here is a huge value making sellers want to list on your marketplace. Most marketplaces that we speak to are requiring a ton of attributes aspart of their product submissions and many sellers don’t have this information. This leads them to abandon the process resulting in poor product listings.

 

So, let’s make it easy for them. How will this impact your marketplace shoppers? We look at your business having two very important clients: your shoppers and your sellers. So we just talked about the sellers’ portion. Now we’re going to dive into how this is going to impact your shoppers. The answer is trust, and trust is one of the most important components for drawing shoppers to your marketplace.

 

Be the Gold Standard, Pivot to Winning the Basket

Marketplaces that aren’t thinking about enhancing backend data with the most accurate and robust product details will lag behind. And it starts with the aforementioned first pillar – having really strong recommendations for your sellers. This, in turn, will impact your shopper’s experience. If you see your product listing with disparate details on the product, the click-out rate of the external research will limit the chances of your marketplace winning the sale versus your competitors.

 

The ‘gold standard’ is being the product expert for your shoppers. An example of another large challenge is duplicate listings of the same products. Here, you will see three of the same products with different photos, titles, prices scattered throughout the DSLR camera category page on Facebook marketplace. This could be totally confusing and on off putting to some shoppers:

Group identical products by sellers

As illustrated above, it’s hard to see what is actually accurate, what’s fraudulent, if it’s the same product that is actually being searched, etc. So, if you have a robust catalog like Facebook marketplace does here, consolidating duplicate items into one listing can improve the shoppers experience. 

 

However, below shows the after view that we have been able to help our marketplace clients achieve:

Here you will see an example of a product listing with all the sellers that are selling this particular item. All the shopper needs to do is choose which offer makes the most sense to them based on price and other things like shipping, or what type of conditions it is in. So, as shown here, you’ve just limited a three-plus click process down to one or two by consolidating those listings into one. 

 

In closing, understanding the importance of the two main building blocks of your marketplace’s catalog will impact your seller and shopper experience. Next, be sure to dive into the importance of promoting the most relevant products with the most informed, competitive pricing – and learn the characteristics of A+ sellers that are right for your marketplace. 

Demand and Product Analysis: Present Relevant Items at Competitive Prices

Demand and Product Analysis Present Relevant Items at Competitive Prices

There is no question catalog integrity is truly the foundation of a successful marketplace, but you know what else is? Having high demand products of prices that will sell. Many marketplaces tell us time and time again that they struggle with the ability to stay apprised of pricing changes, which we know fluctuates by the minute. 

 

At the same time, shoppers want the reassurance that they’re getting the hottest items at the most competitive prices. To that end how does a marketplace stay ahead of new products or know what products are in highest demand outside of their own respective marketplace? 

 

On December 8, 2021, during a live webinar, we dove into this and more, starting with the importance of catalog integrity as the foundation of any marketplace business, followed by how to present the most relevant items, at the most competitive prices. Read the transcript below and watch the accompanying video

Getting Product Demand Analysis and Ranking Right

We can all determine why customers gravitate towards the Amazon marketplace. If I ask anyone if they ever had to go to the second page search results on Amazon, their answer would likely be no. Well, why is that? We know that Amazon has perfected product demand analysis and product ranking and always shows that best selling products at the most competitive prices. So despite this simple logic, this continues to be a pain point for many marketplaces in which low demand products are monopolizing the most important digital real estate, which is the first page search results.

 

According to BigCommerce, over 70% of sales are coming from page one. Having low-demand items displayed first will undoubtedly lead to a very poor user experience and leave your customers wanting more. Again, the obvious lack of competitive pricing will deter your buyers. 

 

In fact, according to Active8 more than 50% of online shoppers will now regularly compare sellers to find the best prices. So the bottom line is pricing is not static and it’s a marketplace’s responsibility to stay apprised of competitors’ pricing, sales campaigns and promotions.

 

This can change by the minute. So to that end I’m just going to pose a few questions:

 
  • How does a marketplace ensure they’re offering competitive pricing? 
  • What guidance, if any, are you providing to your sellers to help them price their items competitively and to win that basket? 
  • And if a marketplace knows that they have the best offer, how do they inform their shopper that they are in fact receiving the best offer? 
  • What can you do as a marketplace to increase conversions?
 

First, fill gaps into the competitors’ pricing. Having sufficient market research will allow you to understand competitor pricing across marketplaces to help you win the basket. Now providing pricing guidance to your sellers is an amazing opportunity for marketplaces to drive value to their seller community, as well as presenting high demand and relevant items first. Most marketplaces are relying on transaction history to dictate product rankings on their marketplace.

 

This works well for big organizations like Amazon. They have massive amounts of transactional data. However, this can be incredibly challenging for less mature marketplaces. Moreover, this doesn’t account for the demand of products on competitor sites. Another point to consider is that a merchant could be trying to list hundreds, if not thousands of items, and not just on your marketplace. So like I articulated earlier, they need your guidance.

 

Driving Value to Sellers with Market Intelligence

If you have the right data to back pricing recommendations to your seller community, it can be a tremendous way to drive value to your existing sellers and result in recruiting power sellers to your marketplace. So help your customers realize they’re getting a good deal. According to BigCommerce nine out of 10 U.S. customers price check a product on Amazon.

 

In closing, if you have the sales intelligence and the confidence that your marketplace has the best price, you can communicate this with your user and show it through a best offer badge. Next, be sure to dive into the importance of catalog integrity, promoting the most relevant products with the most informed, competitive pricing – and learn the characteristics of A+ sellers that are right for your marketplace. 

 

Optimal Assortment: Find the Right Mix of Products to Accelerate Growth

Optimal Assortment Find the Right Mix of Products to Accelerate Growth

Imagine visiting your favorite eCommerce marketplace, where you search for an item you’d like to research or purchase, and land on a particular category page where all you see is the same item listed multiple ways with incomplete information. Immediately, you want to run or leave the website because you think your credit card is about to be compromised on a fraudulent online store. 

 

Online assortment is incredibly important for marketplaces, but how are they dealing with presenting the most relevant items, especially without compromising their product listing data?

 

On December 8, 2021, during a live webinar, we dove into the most popular ways our team works with major marketplaces, starting with the importance of catalog integrity as the foundation of any marketplace business, leading into insights around demand and product analysis, and diving into finding the right assortment. Read the transcript below and watch the accompanying video.

Finding the Assortment Opportunity in the Data

According to Salesforce, over 75% of consumers actually expect to see new items on a marketplace monthly. So this data point shows how important assortment really is in the lens of shoppers. But the question is how are marketplaces ultimately doing this? And not just find the right assortment, but also take advantage of a major opportunity around cross-selling? 

 

Well, you need to have data on your current customers, understand what are the items they’re typically buying, and data to understand what are ancillary items that they might want to buy (in order to group with that initial purchase). So if someone is buying a swimming pool, I would suggest swimming pool toys for the kids, and any other items that might accompany that purchase. Amazon actually makes about 35% of its revenue directly from cross-selling. So this is a huge opportunity for marketplaces.

 

They really need the data to make these suggestions interesting and relevant for their customers. But what are some challenges around assortment optimization? Here’s what I’ve learned in working with diverse marketplaces over the years:

 
  • Assortment lives within multiple functions of marketplace organizations. So, it’s not centralized. 
  • There are multiple teams with this role and responsibility. 
  • Marketplaces don’t have the right data and tools to help effectively and efficiently.
 

What’s more, marketplaces are doing this in a very, very manual way: by looking at competitive marketplaces, other websites where they have interesting items, trying to find and figure out what items they’re missing, trying to find and figure out which sellers can ultimately source those items to their marketplaces. So, it’s an incredibly fragmented and also an incredibly manual process today. So what do marketplaces ultimately need to make this a successful endeavor?

 

There are two things: No.1, centralize and make this a function of one role, so a key stakeholder can manage the process. No. 2, good data and analytics to help make these decisions quickly and efficiently. 

 

Demand and Product Analysis Use Cases

So, let’s take an example of what this actually looks like in real life. Kroger has a printer category on its marketplace. However, the only item it had on its marketplace in the printer category was a single item of printer paper. But, if I was in the market to buy a new printer I would be leaving this site to convert elsewhere if they only have paper. 

 

That said, if you’re going to be a marketplace that is selling in the printers category, you should also have printers and printer ink, in addition to the paper, which is certainly important. But what about including different sizes of paper for example? 

 

But by leveraging the right data, we were able to see that while Kroger has this one item, this item across other marketplaces sells about $10,000 in volume. The sales from this one item are great, but what we also can tell is that there’s another 4,200 or so items that exist within this printer category. And if Kroger were to upload those missing items, they can potentially gain about $150 million per month in this category.

 

While we’re not suggesting a marketplace bring on every single item in a category, it is crucial to understand what are the best-selling items within a category and quickly be able to upload those items to your marketplace in an effective manner. 

 

In a second example, we can see that the Kroger marketplace also has a toys category. However, when digging into that toys category, we noticed that they were actually missing the five best-selling items within the toys category.

 

What you can see pictured here is just these five items, over the course of one month are about $106,000 monthly with the highest volume being $260,000 in volume. If Kroger were to upload just these five items (and gain the right Seller Intelligence) in this single category, it could potentially mean up to $1 million dollars in sales monthly. This is why using data to make decisions around assortment is incredibly important.

 

Understand the Top-Selling Brands with the Right Data

Another opportunity for marketplaces is to think through their categories similar to category advisors throughout retailers. So not only what are the best SKUs and items that are selling, or the best brands, but I also want to understand what are the attributes that are most popular within a category.

 

In another example, we looked at shampoo and conditioners, finding that color treated (or dyed) hair, and damaged hair resulted for a large percentage of this category. For this, a marketplace should focus on adding items with attributes showing ingredients of shampoo and conditioners that are very popular, like Argan Oil, Organic or Paraben Free.

 

In one last example, we noticed that within five categories, one marketplace had about 7,000 items listed on its site. However, we could see about 35,000 items in our data, which could have resulted in about $28 million per month in increased sales.

 

In closing, the idea here is not to upload every single item to a marketplace that exists, the idea here is to understand what are the top-selling brands and items across channels that your marketplace might currently be missing and quickly be able to identify who can sell and source those items, for GMV growth.

 

Once your catalog is built, be sure to promote the most relevant products with the most informed, competitive pricing – and learn what might be missing from your mix of products that can accelerate growth. Once this is in place, it’s time to figure out the characteristics of A+ sellers that are right for your marketplace. 

Seller Intelligence: Target the Right Sellers for Your Marketplace

Seller Intelligence Target the Right Sellers for Your Marketplace

On December 8, 2021, during a live webinar, we dove into the most popular ways our team works with major marketplaces, starting with the importance of catalog integrity as the foundation of any marketplace business, leading into insights around demand and product analysis, and diving into finding the right product assortment. (Read the transcript below and watch the accompanying video.) 

The next key to rounding out marketplace success is making sure that you’ve got the most productive, A+ sellers working with you on listing the right products. So let’s focus on some considerations to think about when you’re recruiting power sellers to your marketplace.

 

Some of this may seem obvious, but I think it’s worth talking about because having quality sellers is critical to your success. And when we’re considering sellers, I kind of broke it down into four key elements that you want to think about. 

Characteristics of an A+ Seller

Four Characteristics of A+ Sellers: What to Look For

First off, look at seller ratings. Amazon has given us a track record for sellers. There’s a couple of metrics that they provide that do a pretty good job in scoring the sellers. One is the seller rating and the second is actually the buyer’s feedback. 

 

And so I’m going to elaborate on each one of those. First of all, seller ratings: What the heck is it? You might have seen that everybody seems to have a rating of 99 or above. Well, that’s because it’s not based on a 100-point scale. What actually is occurring is that fractions of a 10th of a percent matter in that seller rating.

 

So if you look at that seller ratings, you’re going to want to try to isolate and find sellers that have a rating of 99.8 or greater, and contrasting with that, you could eliminate sellers with a 99.5 rating. They can be considered horrible. And it may really seem like splitting hairs here, but the reason is that, again, you want to look at that decimal point in comparing those sellers because it’s that fraction of a 10th of a percent that matters.

 

The way that Amazon is calculating this is that the feedback ratings are based off of the stars left in reviews. And so they kind of look at all five or four stars and consider those positive feedback and everything below four is considered neutral or negative feedback. And the calculation is basically they’re dividing the sum of the positive ratings by the sum of all the remaining ratings. And again, that’s why we’re talking about how small differences in percentages make a big difference.

 

So in summary, you’re going to want to look for a 99.8 or greater seller rating. However, you also want to kind of dive into the buyer feedback and look at the negative ratings or the negative feedback that was recorded. Amazon has previously advised that best sellers average 0% negative feedback. Does anybody ever get 0% negative feedback? Not realistically.

 

So what the industry is kind of pinned on and identified, is that anything between zero and 2% negative feedback is considered great, anything greater than 5% could be a cause for concern and you might want to look at some other metrics around those sellers. So combining those two, 99.8 rating or better with less than 5% negative ratings is what you’re looking for. The second piece to consider is a seller’s portfolio size. The A+ sellers tend to have larger portfolios.

 

In fact, over 70% of million-dollar sellers have over 20 items in their catalog. You’re not going to want a seller with one or two items. They’re typically testing out whether or not they even want to get into eCommerce. You want to try to find sellers who are making this their business and are actively pursuing it.

 

One-third of million-dollar sellers, in fact, have over 250 items and they’re changing their mix regularly to make sure that they are relevant and have the right assortment to be able to meet market demand. So while you’re evaluating a seller, make sure they’re committed and active in their business indicated by a large number of items and a changing mix over time. These are the sellers that are also actively managing their portfolios and continuing to bring new products and new excitement to your marketplace.

 

Third, you’re going to want sellers who have fulfillment flexibility. This means trying to find sellers that are not FBA. These sellers have proven that they can deal with complexities of inventory management on their own and have the flexibility to pivot and deliver to their customers while having to deal with Amazon’s ever changing requirements.

 

So you don’t want to have them locked in and needing to send all of their inventory to Amazon to meet their requirements. Lastly, there are a couple of sales metrics and KPIs that you’re going to also want to consider. You’re going to want to find established sellers who have been in business for more than six months.

 

That’s because if they’ve made it to that six month mark, they’ve learned what works and what doesn’t work. They actively work their portfolios with social media, SEO, price monitoring, etc., in order to be a successful marketplace. And last, you should look for sellers with positive sales trends and a significant share of the Buy Box. 

Finding Quality Sellers are Critical to Success

For example, we recently worked with a marketplace that was interested in adding paintball supplies to its portfolio. We did a seller analysis and what we found is that a large percentage of the market was supplied and serviced mainly by two sellers (over 50% of that marketplace). So if I’m trying to find the right seller, I’m going to look at those two first. But let’s dig down and take a closer look at those two sellers and kind of compare and see which one is going to be the best fit for the marketplace.

The first seller has a market share of 25% (the highest market share). It is selling over $330,000 in GMV, but it is actually trending down. They’re an FBA seller and they’ve been in business for about eight months. The second seller has a slightly lower category share and a lower GMV, but it is not an FBA seller and has been in business for over 18 months. 

 

When you look at their different ratings, the second seller has much stronger positive ratings both recently and over the lifetime that it has been in business.

 

So when comparing two sellers and trying to recruit them to my marketplace, looking at the metrics, the sales, and the ratings makes it pretty clear that I would want to try to recruit the second seller rather than the first seller. 

 

To summarize, there are four key elements to consider when comparing sellers on the marketplace: seller rating, portfolio size, fulfillment flexibility, and key KPIs like sales metrics. After you’ve established catalog integritypromoted the most relevant products with the most informed, competitive pricing – and learned what might be missing from your mix of products that can accelerate growth, finding the right sellers are crucial to success.

10 eCommerce Influencers to Follow on Social Media

Keeping a pulse on eCommerce intelligence in real time involves many moving parts. From scouring various datasets to online trending insights, we look to create the most comprehensive and accurate product catalogs; the foundation for any online brand, CPG, marketplace or aggregator looking to accelerate growth across digital channels. 

 

While we continue to track and analyze product data from over a billion items, from millions of brands, across multiple marketplace channels (and geographies) in addition to the digital point-of-sale data leveraged – in our own market research, we also keep an eye on some key eCommerce influencers that help guide us on where to look next. 

 

These 10 eCommerce Influencers are presented here:

No. 1: Juozas “Joe” Kaziukenas, Founder of Marketplace Pulse

If you’re looking for data and research on marketplaces, the lead of this eCommerce intelligence firm is a good place to start. With data collected from Amazon, eBay, Etsy, Walmart, Wish and others, its proprietary software takes raw data from web scraping and APIs to extract particular insights on brands, product categories and sellers. Kaziukenas’ most recent piece is an annual “Marketplaces Year in Review 2021,” giving an in-depth snapshot on what’s going on in this industry based on data observations in the most objective way possible.

No. 2: John Dick, Founder and CEO of CivicScience

Built his survey and data company to ‘study emerging trends among early adopters, market mavens, and influencers.’  A frequent speaker at the Carnegie Mellon University Don Jones Center of Entrepreneurship, regular contributor to AdAge, the HuffingtonPost, and Forbes and with appearances on Good Morning America, Cheddar, Yahoo Business, etc., his latest insights most recently take the temperature of consumers during a pandemic including what this means online

No. 3: Deborah Weinswig, CEO & Founder at Coresight Research

And one of LinkedIn’s Top Voices for retail, is focused on covering all things retail technology, trends, live streaming, commerce and more. Her latest LinkedIn share speaks to rising inflation presenting a significant challenge and insights on how retailers should not simply ‘pass along rising costs to their shoppers.’ Instead, seek other opportunities to offset those inflationary pressures by looking for tech that streamlines and optimizes eCommerce processes. 

Sri Rajagopalan

No. 4: Sri Rajagopalan is not only the Chief Omnichannel Customer Officer for General Mills

But he has made his way up the eCommerce ranks in a career that spans the likes of well-known brands including PepsiCo, J&J and Revlon. He has also added advisor to startups to his current role, but is most relevant to this list for his Co-Hosting of The CPG Guys podcast. Rajagopalan adds his eCommerce expertise to podcast Co-Host and consumer loyalty guru Peter V.S. Bond to ‘explore how brands and retailers engage with consumers in-store, online and everywhere in between.’

No. 5: Colin Lewis, CMO, of OpenJaw Technologies and author of Econsultancy’s Third-Party Marketplaces Best Practice Guide

regularly researches and writes about eCommerce trends and most recently how marketplaces are everywhere. He reports that over 50% of the gross market value for the top six eCommerce players in the world is on marketplaces. What’s more, entrepreneurship and cross-border shopping, the gig economy, and so on … have all contributed to this trend. Most importantly though, Lewis covers how to take advantage of this opportunity and win on marketplaces. 

Kaleigh Moore

No. 6: Kaleigh Moore is a regular contributor to Forbes

With an expertise in retail, eCommerce and direct-to-consumer (DTC). She’s particularly focused on trends within the fashion, beauty and luxury verticals. Her latest works include how DTC brands are diversifying their product lines creating more eCommerce competition – something online retailers need to track. She also reports recently that digital, third-party marketplaces are seeing an 81% increase in gross merchandise value year-over-year so far in 2021, and highlights examples of how online luxury marketplaces are ones to watch. 

Chris Dawson

No. 7: Chris Dawson

Is a former eBay seller turned Co-Founder and Editor of Tamebay. According to his bio, he noticed a lack of general information and help [around eBay selling]  and he had aspirations to create a site to “Tame eBay,” bought a URL and promptly did nothing about it. Fast-forward to today and Dawson works on the site full time, writing and attending numerous eCommerce events throughout the year, also undertaking consulting gigs for companies wishing to fast-track their eBay sales.

No. 8: Steve Dennis

Is a keynote speaker and the bestselling author of “Remarkable Retail,” keeping tabs on the latest retail, eCommerce and digital disruptions happening in the industry right now, closing out his latest podcast with another well-known industry influencer, Professor Scott Galloway. Dennis is focused on retail growth and innovation, stemming from his 30-year career as a senior executive at two Fortune 500 retailers – and more recently as a strategic advisor. He has most recently penned content around the potential Saks.com spin-off, provocative retail predictions, and the hybridization of retail – and he doesn’t hold back on offering up his opinions. 

Tom Davenport

No. 9: Tom Davenport 

Is Visiting Professor at Saïd Business School, University of Oxford, and your go-to for all things data science. He keeps a close eye on artificial intelligence, machine learning and the democratization of data within organizations. He has co-written and written around 20 books and hundreds of articles, most recently quoted as saying the AI/ML trend is part ‘motivation in addition to technology.’ Whether you’re getting started in your data/analytics journey, or need a refresher, Davenport is a helpful ‘follow’ away.

Sucharita Kodali

No. 10: Sucharita Kodali 

Is the Retail Industry Analyst for Forrester, talking all things retail and digital transformation. While her research is typically about broader retail industry trends, she recently held a session at a live event, which looked at a 140-brand study, released in partnership with Vorys eControl that focused on online marketplaces, the challenges that arise in digital sales and solutions for increased online control.

Putting the Influence in [eCommerce] Influencers 

The aforementioned compilation is a list of top eCommerce influencers to follow, who continue to create the content that not only covers the industry trends we’re hearing and seeing, but also have an influence on the more robust eCommerce product catalog information we’re trying to build and improve upon consistently. We hope you find it useful.

 

Who would you add to this list? Let me know at alaricer@algopix.com, and you could see those individuals highlighted in the next iteration since, sharing is caring, after all. 

5 Marketplace Growth Opportunities to Watch for 2022

5 Marketplace Growth Opportunities to Watch for 2022

Keeping a pulse on eCommerce trends and opportunities is not an easy task as it constantly evolves with new and consistently emerging consumer demands – which has been fast-tracked today by a global pandemic.

 

The emergence of different types of online marketplaces has certainly helped to ease the influx of the online shopping shift. With many consumers being forced to buy their groceries and essentials online, this is one of many marketplace trends that will stick around for a while.

 

In fact, according to a recent Alvarez & Marsal Consumer and Retail Group survey, 85% of consumers indicated they will maintain their shopping habits post-pandemic, which bodes well for online marketplace growth.

 

As the new year is just around the corner, many eCommerce brands and sellers are likely considering where to place their bets on strategies that will boost their marketplace growth. While creating a foundation of accurate catalog data is table stakes, knowing where to focus next is key to winning with shoppers.

 

The following compilation is a shortlist of opportunities to watch, pulling from trending headlines, combined with insights from key online marketplace data:

1. Consider the Petcare Category

One of the benefits to being locked down in quarantine is families were spending more time working and learning from home, therefore giving them more time to care for pets. This brought on a surge of pet purchases and adoptions (in the UK alone, 3.2 million pets were bought during the pandemic).

 

According to Pet Gazetteonline marketplaces are the biggest opportunity of growth for petcare brands, as the sector has been shifting to digital, and it is predicted that a third of global petcare sales will be eCommerce transactions by 2026.

 

As such, beginning with an Amazon or Walmart as a launchpad is recommended as a starting point, since the petcare landscape is oversaturated with well-known brands. That said, the data shows that shoppers are mainly researching their items by product and not household brands, making it a level playing field for the category. So, as this category continues to grow, marketplaces should take note.

2. Invest in Cross-Border eCommerce

Data from eShopWorld shows that one-quarter of shoppers surveyed across 11 countries purchased apparel from websites outside of their home market in 2020 (rising even higher among Gen Z and Millennials).

 

This trend goes to show the importance of investing in and offering cross-border eCommerce capabilities, especially for the clothing, footwear and children’s apparel retailers/categories online. The international momentum is still high making the total for cross-border eCommerce up 74% year-over-year for the first four months of 2021.

 

As such, having the right global and cross-platform strategy is key for capitalizing on this growth-area. Ensure to invest in the right data to help fuel this cross-platform/cross-border strategy to take advantage of this new international shopper.

3. Prepare for Longer Holiday Seasons

Data from many online marketplaces showed that consumers started their holiday shopping much earlier than ever before and simultaneously increased their use of online marketplaces. The ongoing supply chain disruptions have prompted consumers to start their research and purchasing earlier so as not to be let down by inventory issues or shipping delays.

 

The once Black Friday/Cyber Monday sale anticipation has now stretched to a longer holiday season, and the average consumer still plans to conduct most of his or her shopping online, even with the reopening of brick-and-mortar retail stores.

 

“As a result of supply chain disruptions and unpredictable product availability, global consumers are starting their holiday shopping earlier than ever before and using online shopping to avoid disappointment,” according to Adrien Nussenbaum, co-founder and co-CEO of Mirakl. “The data from our Holiday Shopping Snapshot offers proof that many of the temporary behavioral changes originally brought on by the global pandemic are becoming permanent. In particular, shoppers are increasing their use of online marketplaces to help reduce costs and ensure gifts arrive on time, with marketplaces seeing the greatest gains among frequent shoppers.”

 

Knowing what high-demand products to promote, and at the most competitive prices, will be imperative to keeping up with the longer shopping season at least until the supply chain regulates itself again (remember: it’s a marathon, not a sprint).

4. Look to Luxury

While many shoppers flock to online marketplaces for good bargains, the luxury sector has also seen a surge brought on by COVID-19, shutting down travel for destination shopping experiences. But translating that journey into a virtual experience has helped with an uptick in growth.

 

According to Forbes, Farfetch serves more than 190 countries and territories with an average order in the first quarter of 2021 totaling $618, with a digital platform GMV growth up 60% year-over-year. Other luxury brands on the marketplace bandwagon include Net-A-Porter and Matches Fashion, using more strategic ways to profit from omnichannel retail.

 

What’s more, Bain & Company projects that as much as one-third of all personal luxury purchases will take place digitally by 2025, with revenues reaching an estimated $136 billion. In order to take advantage of this growth opportunity, fostering product discovery to drive sales is key in luxury.

5. Keep Up with Emerging Competition

Many large and well-known brands having been struggling to keep their doors open resulting in talks of splitting up: separating the brick-and-mortar footprint from the eCommerce business. Most recently, Macy’s has been on the fence about it, attracting a lot of attention, however Fortune reports that “An online only Macy’s would need to work incredibly hard to differentiate itself against Amazon and many other players.”

 

Macy’s is not the only one to watch: Kohl’s and Saks have been reporting a similar story, and most recently Giant Food has launched an eCommerce marketplace featuring non-grocery products. Whether some of these splits will be cause for concern for marketplace competition, only time will tell if they can compete with the likes of Amazon, Walmart, or eBay, etc.

 

How can online marketplaces get ahead of the competitive landscape? The answer is in the data. By having real-time insights at their fingertips, marketplace leaders can build a catalog that can be trusted, with the right power sellers to overcome any competition. It’s a win-win-win for marketplaces, sellers, and shoppers alike.

Recommendations

Use key product data to know where to expand next, whether it be in petcare or luxury items. Look to high-demand products at the most competitive pricing and know when to offer the right promotions to remain top-of-mind. While the marketplace industry may seem oversaturated at times, building the right backend product data catalog is essential to keep up. Then, invest in a cross-border, cross-platform strategy – agility is critical to survival in a constantly changing eCommerce landscape.  

 

Scaling an online marketplace for success can feel like a major undertaking, but with the right canonical catalog as a foundation, and an eye on the right real-time data, seizing the next big opportunity can help marketplaces continue to thrive without signs of slowing down.

From the Tech Trenches: 5 Questions with Cluster Chief Technology Officer

When the company was first launched in 2016, the mission for Algopix was seemingly simple, “To make eCommerce marketplace data more accessible and usable so online brands can make informed decisions.” It was able to aggregate marketplace data in real-time to help sellers research, source and launch their online businesses. 

Fast-forward to today (and throwing a global pandemic into the mix), eCommerce has been thrust into the spotlight – as a survival mechanism for brick-and-mortar and even restaurants, to accommodate social distancing mandates, and to get essential goods and services to those in unprecedented circumstances. 

Whatever the reason to shift to eCommerce, Algopix also began its own shift. As more and more enterprises and big brands started to pique their interest into learning more about what real-time data can do for their online marketplaces, we also had to pivot and create new products and services for a broader audience. 

And while the only certainty in eCommerce is change, we also know that: 

1. eCommerce/online shopping is here to stay (now that we’ve figured out how to buy groceries online, why would we want to go back?), and 

2. Data, analytics and technology can’t be static in a constantly changing world. 

So, here we went right into the trenches and caught up with our Chief Technology Officer Yaniv Cohen, with five top-of-mind questions to see what advice he uses to thrive and what technologies to watch going into 2022 and beyond:  

 

Q: What did you learn along your career path that you still use today?

COHEN: First, when you get the chance to build something from scratch, make sure you get it right the first time. This ensures you won’t face any issues with systems that someone else has built (especially if they didn’t do it right). 

Next, even if someone else is to blame, don’t use that as an excuse to report failure. Make it work by doing everything possible to get things moving in the right direction until it gets done. Try to help others around you become better at what they do, you’d be surprised how much improvement you’ll see in their performance. The most talented people I’ve had the pleasure to work with during my career are not those who have the best looking CVs.

Finally, leadership is never given by authority. Leadership is given to those who take care of others around them. 

 

Q: If you could go back and give yourself advice when you first started your career, what would that advice be?

COHEN: As a software engineer, you should have a very solid knowledge of the basics (data collections, algorithms and even design patterns). They apply to almost every development language you will use.

Additionally, make sure to surround yourself with highly professional and GOOD people. It will make you a better professional and a better person.

I started out in the industry when XML became all the hype and JSON hadn’t been thought of yet. Today, nobody would use XML if they can avoid it, so if I could go back to when I first started, I’d say, “Use JSON, not XML!”

 

Q: What advice would you give to any entry-level business/tech person today?

COHEN: What you do at the beginning of your journey will most likely lead to what you’re doing for the rest of your career. So, choose your first role carefully.

The majority of interesting, challenging and innovative positions are usually not found in high profile, large companies. It is usually at the smaller or digitally born organizations that are trying to build something new and innovative using the latest technologies.

 

Q: What resources do you use for continuing your education or learnings as technology continues to evolve and change.

COHEN: Online blog posts and technology-centered websites. But above all, I look to my colleagues and peers who I’ve become to know well during my career. I get to discuss new technologies with them especially if they’ve had experience with them already.

 

Q: What is the greatest piece of technology to watch?

COHEN: I think that quantum computers are going to change everything. Programming languages are going to change considerably in order to support this new technology.

 

Benefits To Using an API-First Strategy

Over the past few years, eCommerce businesses have had to deploy new digital technologies to better serve their customers and stay one step ahead of their competitors.

As such, many eCommerce providers have adopted application programming interfaces (APIs) to integrate their software with such shopping platforms as Shopify, Magento, eBay, Amazon, and more. This eCommerce API integration works as a data transfer bridge between the eCommerce shopping platforms and the eCommerce tools, enabling the vendors to provide their customers with the functionality of their platforms.

An API is a set of functions that lets an application interact with operating systems, microservices, external applications, or data. Put simply, APIs allow software to “talk to” and interact with each other. An API for an eCommerce website connects consumers and eCommerce companies by transforming data into valuable business information.

Participating in the API economy is critical to the long-term success of eCommerce vendors as it allows them to connect to tools that help them as well as their customers operate more efficiently. The key to this, however, is using an API-first strategy. 

 

Benefits of an API-first strategy

Generally, software vendors add APIs on top of their platforms, allowing customers to access some of their software’s underlying functionality but not all the functionality. The API-first strategy makes system integration easier. 

An API-first strategy ensures that customers can access all of the functionality of the vendors’ software through the APIs. This API-first strategy enables eCommerce vendors to create and extend the solution they need to develop to meet their needs as well as the needs of their customers. Not only does the API-first approach improve the development of a solution, it also makes the development process more agile.

Today, applications must not only be well-designed but they have to be on the market within six months. Another benefit of an API-first strategy is that it allows companies to get their products to market faster and it enables customers to derive value more quickly from those products. 

And an API-first model allows developers to customize the features of their solutions according to the business needs of their clients. API-first also makes it easier for developers to make improvements and adjustments to the solutions without having to re-architect the entire system to meet the ever-changing business needs of their customers

The following are benefits of an API-first strategy for eCommerce vendors:

  • Saves time and money on developing applications and rolling out updates. 
  • Changes to the API happen simultaneously across all applications. 
  • Enables automation, which accelerates production.
  • Developers don’t have to build new programs for each application.

Benefits of an API-first approach for eCommerce companies:

  • Lets teams identify design or programming flaws before rolling out applications to customers. 
  • User-facing information looks the same across all platforms. 
  • Website content can be customized to meet the needs of returning customers and website visitors.
  • Improves user experience, as APIs let companies offer customers more services in less time.
 

Importance of a product price API strategy 

Price monitoring software enables eCommerce companies to monitor the changes in their competitors’ prices in real time. It also gives them real-time insights into stock availability, promotions, and other information eCommerce companies can use to optimize their pricing strategies on the fly.

It’s important for eCommerce companies to use price-monitoring APIs that provide up-to-date eCommerce data that collects information from large retailers and eCommerce marketplaces. This includes information about the top-selling products, product availability, shipping costs, and more. 

Price monitoring APIs also allow eCommerce retailers to trace the pricing history of any product for a specific time period. In addition, the automated price tracing capabilities help organizations save time and money on competitive analysis.

Conclusion

By adopting an API-first development strategy, eCommerce vendors will have agility to meet ever-changing customer expectations and remain competitive in the market. An API-first strategy gives online retailers more control over the selling experience and offers them more options when it comes to scaling up and improving services. APIs also help online retailers get more insight into their customers so they can offer them products customized to meet their needs.

API tools enable online retailers to build more scalable and robust eCommerce platforms that are critical in today’s business climate.

7 Tips To Recruit Power Sellers to Your Marketplace

If you’re looking to create a multi-vendor eCommerce marketplace, one of the most important things to consider is how to attract the right vendors to your marketplace.

Although eCommerce marketplaces can be incredibly lucrative, recruiting sellers for your marketplace can be extremely competitive. 

However, if you want to attract thousands of shoppers to your marketplace each day, you must give them what they want — quality sellers. And that means you must have a top-notch seller recruitment strategy.

Here are seven tips to help you figure out how to get vendors to sell on your website:

1. Contact eCommerce sellers on top eCommerce marketplaces

When you’re putting together your seller network, contact merchants on eBay, Facebook, or Amazon that meet the needs of your shoppers. More often than not, these sellers would love the chance for added publicity and likely would agree to also sell their services or products on your marketplace. 

2. How to find a seller offline

Reaching out to sellers via social media and other online marketplaces is a great idea; however, in-person meetings are also highly effective. Today, more organizations are again holding-in-person events after holding virtual-only events during the height of the COVID-19 pandemic. As such, you should take every opportunity to connect with vendors at meetings of merchant associations, trade fairs, and other offline events. After you get to know sellers at these events, add them to your social media contact list or send them emails to keep in touch and discuss collaboration prospects.

3. Offer a good user experience

A poor user experience is a major reason your target sellers would opt for Amazon rather than your marketplace so make it easy for vendors to publish and manage orders via your platform. For example, offer sellers an administration panel where they can track how many people viewed their products or service listings. You should also offer to help them publish their listings and provide 24/7 customer support. In addition, build a knowledge base to guide sellers as well as users around your platform. 

4. Employ a smart marketing strategy

A smart marketing strategy is one of the most effective methods to promote your multi-vendor marketplace platform and attract sellers. There are a number of ways you can promote your eCommerce marketplace.

For example, using social media groups, forums, and communities. Social media is a great way to connect with sellers and bring results for your business. Try posting informative and promotional messages on social networks. Regularly sharing information on social media platforms will keep sellers updated about the latest news regarding eCommerce marketplaces in general and your website in particular. Joining merchant communities and forum discussions across different social media websites and channels will also help you connect with them directly. 

5. Target ads properly

Another way to get the word out about your eCommerce marketplace and persuade merchants to join is by running Google search ads and display ads campaigns. Build ads so businesses can register on your online marketplace as sellers. You can also publish your ads on eCommerce websites.

6. Write blogs to attract vendors

Writing blog posts is another effective way to draw merchants to your multi-vendor marketplace. You can write about the successes of your current sellers, offer information about selling on eCommerce marketplaces, and other helpful business information for merchants. Post your blogs on your social media accounts as well as on your website. And you can boost your rank in Google search results by optimizing your blog posts for search engine optimization.

7. Target the right vendors at the right time

The types of merchant you want to attract to your marketplace varies according to where you are in the process. 

  • Stage 1: Launch and development: focus on finding specific merchants rather than specific products. Seek out experienced marketplace vendors with large product catalogs to ensure you’re offering buyers a large variety of good quality products.
  • Stage 2: Established marketplace: after you’ve attracted a sufficient number of experienced vendors, you need to ensure that you’re offering all the products and services that meet the needs of your buyers. Now, you can also onboard and train sellers who are less experienced to ensure they are also successful. However, you still need to keep seeking out experienced vendors to expand your eCommerce marketplace.

Conclusion

Acquiring the right vendors is a critical component of a successful eCommerce marketplace. The tips we’ve offered here will help make your eCommerce marketplace a success. However, attracting vendors is an ongoing process so you should periodically re-evaluate based on the requirements of your buyers.

The Impact of Consumer Spending on the Growth of Online Marketplaces

During the height of the COVID-19 pandemic, consumers were forced to shift their spending online. Now, even as federal, state, and local governments are lifting COVID-related restrictions, most consumers are still not planning to return to their old ways of shopping.

In fact, 85% of consumers indicated they will maintain their online shopping habits post-pandemic, according to a survey from the Alvarez & Marsal Consumer and Retail Group. 

Many of these consumers are shopping on eCommerce marketplaces, such as those operated by eBay, Amazon, and Expedia. And this shift in consumer spending is responsible for the massive online marketplace growth.

The Growth of Online Marketplaces

The marketplace trends in 2022 and beyond have been accelerated by Covid-19. More than 40% of online spending post-pandemic is taking place on eCommerce marketplaces, according to the Wunderman Thompson Commerce’s Future Shopper Report 2021. And by 2025, spending on online marketplaces will surpass spending on eCommerce websites in established retail and travel categories, according to OC&C Strategy Consultants’ Trading Places report.

Consumers are attracted to marketplaces because they offer convenience, choice, and value. And eCommerce marketplaces offer suppliers a large pool of customers as well as such value-added services as fulfillment and payments. 

This change in the shopping habits of consumers that has contributed to this marketplace growth has also caused brand owners and retailers to investigate selling on already established marketplaces, such as Amazon or eBay. 

In this case, merchants should identify the top marketplaces in their areas and determine how best to optimize for those marketplaces. Every online marketplace is also a search engine that enables consumers to search for and find the products or services that best suit their needs. Marketplace optimization lets sellers’ product listings show in relevant searches, which boosts their chances of selling their goods or services.

To capitalize on the growth of online marketplaces, some merchants are looking at setting up their own marketplaces to help them reach new consumers and new markets, as well as expand their offerings.

However, attracting sellers to eCommerce marketplaces is not an easy proposition. Business owners that aim to build their own marketplaces must identify their target audiences first, then identify the best channels to reach them. And then the operators of these marketplaces must also understand the concerns and interests of potential vendors so they can create the right messaging to recruit the right sellers.

Effectively incorporating new sellers and ensuring their ongoing satisfaction starts with a seamless marketplace onboarding process and includes ongoing customer support and easy website management. 

 

Types of Marketplaces

There are three main types of eCommerce marketplaces: business-to-business (B2C), business-to-consumer (B2C), and peer-to-peer (P2P).

Business-to-Business Marketplaces

A B2B marketplace connects companies (consumers) with other businesses (vendors), such as retailers, wholesalers, or manufacturers, to buy from them. This type of website enables vendors to begin delivering services much faster than if they had to develop their own e-commerce websites or open physical stores. A B2B marketplace helps sellers expand their sales channels and attract new customers.

Examples of popular B2B marketplaces include Amazon Business, Alibaba, DesignRush, Global Sources, and IndiaMART

Business-to-Consumer Marketplaces

A B2C marketplace matches individual consumers with vendors. Large B2C eCommerce marketplaces can be compared with retail stores where consumers can find multiple providers offering a variety of products. 

B2C marketplaces are the most popular marketplace model. However, the giants in the space, including Amazon, eBay, and Booking.com, are likely to maintain monopolies in the B2C marketplace for many years. As such, it may be difficult for new entrants in the market to attract millions of consumers because of this high level of competition.

To succeed in the B2C market, eCommerce companies might want to think about creating niche marketplaces that target consumers that have similar needs and preferences. 

Peer-to-Peer Marketplaces

Peer-to-peer (P2P) marketplaces (also known as consumer to consumer) provide platforms for individual buyers and sellers to find each other and trade goods and services

P2P marketplaces allow users to be both consumers and service providers, depending on their needs. For example, Meta (formerly Facebook Marketplace) was created to connect consumers online to sell and/or purchase new or used goods and services within their own neighborhoods. 

Conclusion

With the fundamental shift in consumer spending habits, there’s never been a better time for businesses to build B2C, B2B, or P2P online marketplaces to reach new customers and sell their products or services. Online marketplaces enable companies to grow beyond the limitations of their own operations and infrastructure and take their eCommerce businesses in new directions.