Ecommerce & Marketplaces Newsletter – Sep 15th, 2023
Platforms have now evolved to encompass the sharing economy and the gig economy. This edition’s lead story from MIT Sloan, with contributions from Brian Eastwood and Peter Evans, looks at how platforms are best placed to power the circular economy. With the platforms excelling at connecting disparate buyers and sellers, it is the best model poised to support the circular economy, which reuses raw materials and finished goods. Practical Ecommerce has exciting charts and data that rank the global marketplaces based on monthly website visits. It is no surprise that Amazon was by far the most widely used online consumer marketplace in the world, with an average of 2.5 billion monthly visits in August 2023, according to traffic estimates from Similarweb. Artificial Intelligence continues to march ahead with gusto; Jungle Scout presents eleven strategies to leverage AI in digital commerce. Among the long list of tools and solutions available to online marketplace businesses, artificial intelligence has emerged to help business owners and employees boost efficiency, automate operations, and focus on growth. As for the downside of AI, the Washington Post lists bizarre AI-generated products in stores and ways to avoid them. AI-generated coloring books, plant guides, and home goods fill online stores as sellers try to make a quick buck. The sellers often use AI to cut costs and time and capitalize on popular categories of goods for easy revenue. Marketplace fulfillment occurs when the platform on which you sell manages your order fulfillment procedure. WareIQ has insights into how sellers and brands can unlock value through the right marketplace fulfillment partner. Using a partner or depending on the marketplace for fulfillment helps a business get its items into customers’ hands faster. Read this and other great stories in this week’s edition.
Notable news from the past week
Platforms Could Power The Circular Economy
If there’s one constant in the platform economy, it’s change. Platforms started out fueling the matchmaking economy (eBay) and have evolved to further encompass the sharing economy (Airbnb) and the gig economy (Upwork). The next phase: platforms supporting the circular economy, which reuses raw materials and products by connecting consumers to enterprises and to each other to reuse, repair, refine, or recycle goods. “When it comes to the future of platforms, one of the big forces at work is growing concern about sustainability and climate change. The heat waves, the fires, and all sorts of other phenomena happening in the world are increasing anxiety,” said Peter Evans, PhD ’05, the chief strategy officer at McFadyen Digital. “There’s an opportunity for platforms to be incredible engines for driving a circular economy, not just the linear economy.”
Charts: Top Global Marketplaces by Monthly Visits
Online marketplaces are growing rapidly. The charts below show B2C marketplaces ranked by the number of visits in August 2023 — worldwide and in select countries. We define “marketplaces” as platforms that sell products or services without taking ownership of those items. With an average of 2.5 billion monthly visits in August 2023, Amazon was by far the most widely used online consumer marketplace in the world, according to traffic estimates from Similarweb. eBay had the second-most monthly visits at roughly 723 million..
Ecommerce business owners have a lot of competing priorities – conducting product and market research, writing product descriptions, building websites, answering customer service questions, and so many more. Among the long list of tools and solutions available to ecommerce businesses, artificial intelligence has emerged to help business owners and employees boost efficiency, automate operations, and focus on growth. Outside of ecommerce, artificial intelligence is quickly transforming the way we live, work, and interact with the world around us. AI image generators and chatbots challenge our perceptions of authenticity and creativity while offering seemingly endless opportunities for AI-assisted work. This ultimately poses questions about whether AI will replace — not just assist — the work of employees.
Bizarre AI-generated Products are in Stores. Here’s How to Avoid Them
There’s something off about the black and white drawings in “Floral Whispers, Coloring Book for Women.” At first glance, the book is just 26 pages of beautiful women with impressive bone structure, surrounded by or covered in flowers. But look closer and you’ll see that some don’t have the right number of fingers, or the fingers are elongated to create spooky alien hands. The $7.95 paperback by author “Der Vive,” available on Amazon, has all the hallmarks of being generated by artificial intelligence. It’s self-published by an unknown author with no internet history. There are no reviews, and it was only listed in the past few months. The images all have some kind of distortion or oddity that is typically associated with AI, such as incorrect body proportions and at least one mix-up between a flower and a breast.
The 2023 holiday season is fast approaching, and retailers are preparing for it. Accounting and consulting firm Deloitte announced Sept. 13 that it estimates 2023 holiday ecommerce sales to grow 10.3% to 12.8% over 2022. Deloitte projects holiday ecommerce sales to total between $278 billion and $284 billion between November and January. That compares with 7.9% growth in 2022 to a total of $252 billion in holiday ecommerce spending. Ecommerce sales over the Cyber 5 period (the five days from Thanksgiving through Cyber Monday) alone grew 4% year over year in 2022, Digital Commerce 360 reported at the time. They reached $35.27 billion in the five-day period, up from $33.90 billion in 2021. Digital Commerce 360 also found that holiday ecommerce sales in November and December 2022 increased 3.5% to $211.7 billion.
Marketplace fulfillment occurs when the platform on which you sell manages your order fulfilment procedure. This means they store it, pick it up, package it, ship it, and handle any returns. Some marketplaces, such as Amazon, will even handle customer care for you. All you have to do is deliver your stuff to the marketplace’s warehouse. Marketplace channels are various platforms that facilitate trade. Platforms such as Instagram and Facebook, as well as channels such as Amazon, Etsy, and eBay, are examples of marketplace channels. A marketplace channel is a website where you may sell your stuff. Product-focused or content-focused marketplace channels are frequently distinguished. markets that rely on content are sometimes referred to as “modern marketplaces.”
Marketers use analytics to show return on investment (ROI) for campaigns and make better decisions to increase sales, reduce costs, and make business improvements. Ecommerce analytics helps centralize and manage data. Siva K. Balasubramanian, associate dean and professor of marketing at Illinois Tech’s Stuart School of Business, explains that the onset of multiple data sources to gather and merge data about customers, products, and markets is a common problem for today’s businesses. “Analytics offers useful techniques to handle this problem by organizing data to develop metrics that are most useful for continuously monitoring business performance,” Balasubramanian says. “The focus of analytics is on issues that matter most to the business, and the performance metrics are helpful in identifying and solving problems in real time.”
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