Amazon, eBay, Etsy, Shopify, are all big names that most likely resonate with online shoppers. That’s because most shoppers prefer these outlets while shopping.
These well-known names are referred to as online marketplaces. They differ than regular e-commerce sites, and because of their distinctive traits, customers seem to gravitate toward them.
According to a recent Forrester report released on Retail Dive, half of online shopping took place on marketplaces.
“Last year, shoppers did half of their online spending through marketplaces, and that could rise to two-thirds in five years, according to a report released Wednesday by Forrester Research.” Retail Dive reports.
With the buzz surrounding this complex retail outlet, it makes us wonder, what are online marketplaces all about?
When setting up an online marketplace, it is important to understand that it differs from regular e-commerce sites. The main difference just involves the fact that online marketplaces rely on third parties to carry out operations. So, shopping comes from different sources.
Basically, an online marketplace is just what the name says. It is a marketplace that allows other businesses inventory to be available. eBay is the most popular example of an online marketplace that is widely used. You can get anything you want from eBay, by connecting shoppers to third-party outlets.
Online marketplaces offer convenience, which is one reason why they are so popular among shoppers. They give customers access to a variety of different products and suppliers, easily and effectively.
It is easier to browse an online marketplace because you can get way more selection as opposed to just going through the inventor of a regular e-commerce site.
The marketplace is continuing to grow, with big names like Walmart joining the industry. This give marketplaces a competitive edge against brick and mortar stores, and e-commerce sites.
According to Forbes, there are three different kinds of marketplaces:
A vertical marketplace sells the same type of products, but the sources vary. For example, if one marketplace focuses on clothing, it will only sell clothing. However, the marketplace will focus on making sure the suppliers for their site are high quality and all match the same overall theme.
Vertical markets target specific customers and provide products that meet their needs. In order to be successful, a vertical marketplace needs to make sure its technology is up to date in order to follow its designated customer base.
To do so, channel companies look to gain experience and expertise in their targeted vertical market. This would include developing an understanding of that customer base’s unique needs, business models and challenges, as well as the market’s important trends and terminology.” Tech Target reports.
Horizontal marketplaces get more specific when it comes to its goods and services. This marketplace offers the same type of product, but instead, target different characteristics.
The goal here is to reach a wide range of buyers across various different sectors. So, the output good of this market is usually in wide demand.
Global marketplaces are known for selling everything! A perfect example of this marketplace is eBay. This platform sells everything and anything the supplier wants to sell.
“eBay has 167 million users, over 1 billion items for sale, more than 80% of the items are new, and this year will sell almost $90 billion worth of product. Their appeal is their breadth of product.” Forbes reports.
eBay has created a community of users who trust the site to sell their products and goods. It is the most familiar global marketplace on the web, and it has gained its popularity and reputation based on what it offers its customers, like low prices, accessiblity, and relaiblity.
ABOUT DIGITAL RETAIL TRANSFORMATION ASSEMBLY
North America’s most prominent digital, marketing, technology, and business leaders from the Retail Industry are coming together October 19-20, 2017 at the Grand America Hotel in Salt Lake City, UT, for the Digital Retail Transformation Assembly.
Our agendas and attendee lists are for events attendees only. Apply to attend here! Already attending? Simply click the link and enter your password when requested.