There is a growing interest in marketplaces, both among consumers and companies. Where does this interest come from? What is the link between PIM and marketplaces? YellowGround went to Marketplace expert Niels Jaspers from Operai for answers. Read more in this blog.
Marketplaces and PIM
Consumers are buying more and more on marketplaces. Currently, 57 percent of all global e-commerce transactions are conducted through marketplaces. Looking at the numbers, Belgium seems to be lagging behind when it comes to marketplaces. But now that Amazon has also set foot in Belgium (the Belgian website was launched in October 2022), companies and consumers are increasingly interested in marketplaces. We spoke with Niels Jaspers about marketplaces and the role of PIM/MDM within marketplaces.
Bio: Niels Jaspers has been active as a marketplace consultant within Xplore Group for several years and founded Operai in 2022. He is also chairman of the marketplaces expert group and has international experience as a marketplace seller.
WHY DO MARKETPLACES BECOME MORE AND MORE IMPORTANT?
Niels: “The Marketplace business model is becoming increasingly important for companies due to changing consumer needs. Consumers buy where their needs are met. If you’re watching TV in the evening, you quickly grab your phone during the commercial. Fingerprint, bol .com, one more fingerprint and you’ve ordered. The next day it is already delivered at home. That convenience has changed consumer behavior in the Benelux. When people buy elsewhere after that, they have to fire up their laptop and create an account first. Either it is sold out, or the delivery time is two weeks or they have to pay a lot for the shipping… There is less and less understanding for this because people no longer see why they should accept that. That is the main reason for consumers to purchase on a marketplace.”
And on the supply side? Why are more and more companies interested in marketplaces? That’s twofold. On the one hand, you can reach a new market by selling your products on an existing marketplace. But you can also decide to start a marketplace yourself.
Niels: “Companies are looking for growth. And the marketplace model is a way to achieve that without increasing your investment and your workload directly. You let your range grow exponentially by letting other companies offer products on your platform. They purchase the products, store them in their warehouse, have their own staff on the payroll to pack the packages and handle the return themselves. The marketplace operator outsources all this cost-intensive workload to its sellers. We call this work evaporation. Exponential growth due to work evaporation.”
“When you can outsource those tasks, you can focus on the core of your business. Take Decathlon for example. That is a marketplace that has ensured that they are very good in their niche: sports. They don’t go far beyond that. Decathlon has a number of categories and these ensure that you as a customer know very clearly what to expect. If you are looking for black sports shoes, you will be able to buy them on their platform. It just can’t be sold out. If they don’t have it themselves, they will offer you the stock of one of the partners.”
MARKETPLACES & PIM: A MATCH MADE IN HEAVEN?
Modern marketplaces fluctuate between hyper-verticalization (selling a set of specific products) and hyper-localization (selling in a specific region/country), creating different marketplace models. One of the things that is central to the success of the marketplace is the accuracy of the product data down to the smallest detail. This plays a vital role in converting a visitor into a customer, especially if your product information is enriched, complete and contains the features they are looking for. That’s where a match emerges and a sale happens. So if you want to sell on a marketplace, you need high-quality, extensive and correct content.
Niels: “There are two important things to be competitive in a marketplace. Good content, unique content. That is very important, that you did not copy it from somewhere else, but offer your own content. And a competitive price. Because if you are even 10 cents more expensive than the competition, you will not sell anything.”
Since PIM’s core capability is to create a single source of truth for product information, it delivers data to marketplaces instantly and accurately. Modern marketplaces use PIM to gain a competitive advantage by providing the best possible customer experience to support conversion and customer loyalty. PIM is central to successful selling on marketplaces.
If you look at it from the point of view of building your own marketplace, PIM is also extremely important.
Niels: “You also have the build versus buy discussion at marketplaces. If you build a marketplace yourself, your success will stand or fall with the choice of the right PIM system. If you are going to buy a Marketplace solution, such as Mirakl, it often already includes a PIM system for third parties. If you are a pure marketplace, just like Uber or AirBnB, then this is sufficient. If, like Decathlon, you are going to expand your own range with products from third parties, then a PIM system is indispensable!”
If you need more information about this, we at YellowGround are happy to visit you with our colleagues from Operai.
THE FUTURE OF MARKETPLACES
“Online marketplace payments to hit USD $8.7 trillion by 2025”
– Finextra. 28 April 2021
According to some, marketplaces are the future of e-commerce. If we look at the figures, we indeed see that critical consumers increasingly use marketplaces for their purchases. What trends does Niels see within the marketplaces in the coming years?
Niels: “The emergence of the Marketplace model in B2B. The B2B marketplaces market is growing twice as fast as the B2C marketplaces market. According to Finextra, we can expect worldwide sales growth on B2C marketplaces of 14% Year Over Year until 2025. For B2B, the share of sales on marketplaces is currently still low, but we expect marketplaces growth of 32% year over year until 2025.”
The importance of marketplaces cannot be underestimated. Companies looking for growth should start focusing on marketplaces.
Another final thought from Niels: “The truly successful and scalable marketplace is the marketplace that has its content and its product attributes in order. If they are right from the start, you will receive good content and you will handle it well. Then you can really scale up with the marketplace.”
That makes PIM indispensable for the success of the marketplace and sales on the marketplace.