Ecommerce & Marketplaces Newsletter – Dec 22nd, 2023
In this week’s lead story, Forbes gazes into the future on what we can anticipate for brands engaged in selling and advertising on retail platforms like Amazon , Walmart.com, and Instacart in 2024. The speed at which the retail marketplaces and retail media landscape evolve is accelerating. In addition to numerous other advancements, 2023 witnessed significant milestones, such as integrating generative AI into online shopping and establishing the groundwork for standardizing retail media measurement. Marketplace Pulse reports Temu and Shein are the fastest-growing e-commerce marketplaces in the U.S., yet they have practically no U.S. sellers. More than half of Amazon sellers are based in China, and the two newest marketplaces are exclusively for Chinese sellers. The original purpose of these marketplaces was to attract U.S. sellers to diversify a retail environment heavily reliant on Chinese products. However, as of today, their efforts to achieve localization are long-term strategies that, in reality, resemble more of an illusion or a temporary diversion. Digital Commerce 360 has exciting statistics from CNBC’s All-America Economic Survey. American shoppers prefer Amazon to other retailers for holiday online shopping. The survey reveals that 57% of respondents indicated that they conducted most of their holiday shopping online. Comparatively, in 2022, 51% reported the same online shopping behavior. The previous record for holiday online shopping was set in 2020, with 55% of consumers opting for online purchases during the festive season. The introduction of artificial intelligence (AI) has revolutionized the pursuit of the ideal online purchase, triggering a remarkable transformation in the world of e-commerce. Retail TouchPoints story looks at E-commerce’s AI Playbook. Read this and other great stories in this week’s edition.
Notable news from the past week
Five Retail Media & Marketplace Predictions For 2024
The pace of change in the retail marketplaces and retail media world seems to be increasing. Among many more developments, 2023 notably saw the introduction of generative AI into the online shopping experience, foundational work on retail media measurement standardization, and the bankruptcy of the largest Amazon aggregator. But looking forward – what will 2024 bring to brands selling and advertising on retail marketplaces like Amazon, Walmart.com and Instacart? Here are my top five predictions as a retail media and marketplace practitioner. Instacart gets the medal for “first to cross the finish line” here, as the shopping app launched this capability early in 2023, summarizing customer reviews for products. But 2024 will see more retailers introduce more intuitive chat-bots and ways to interact with retailers to surface brand content, product discovery and more. Retailers will build experiences that facilitate better discovery and recommendations through a chat experience that allows for more nuance and personalization.
Shein, Temu Marketplaces With No US Sellers
Temu and Shein are the fastest-growing e-commerce marketplaces in the U.S., yet they have practically no U.S. sellers. More than half of Amazon sellers are based in China, and the two newest marketplaces are exclusively for Chinese sellers. Shein, the Chinese fast-fashion app, launched a marketplace in the U.S. in May. According to Marketplace Pulse research, it has since added tens of thousands of sellers. The marketplace doesn’t identify the business location of the sellers; however, by cross-referencing the list with other marketplaces, nearly all sellers are based in China. Shein’s marketplace was meant to bring U.S. sellers to localize an otherwise China-dependent retailer. As Shein’s head of strategy, Peter Pernot-Day, described in a Modern Retail podcast episode, the marketplace is part of Shein’s localization strategy. “The final piece [of this strategy] is finding both suppliers who make and manufacture Shein clothing, but also third-party sellers who are interested in coming alongside us and reaching our customer base in these local geographies,” he said.
Online shopping was more popular than ever this year, according to the survey. 57% of respondents said they did all or most of their holiday shopping online this year. In 2022, 51% had said the same. 2020 marked the previous all-time high in consumers opting to shop for the holidays online, at 55%. 2020 was also the first year online shopping topped 50%, according to the CNBC survey data. The next most popular response was far lower than online. Just 18% of respondents reported doing most of their holiday shopping at big box stores, like Walmart and Best Buy. That figure has been largely on the decline since 2010 when it made up nearly half (48%) of answers. Locally owned non-chain stores (16%), department stores (8%), outlets (7%), wholesale retailers (4%), chains (3%) and luxury stores (1%) made up the remainder of responses.
South Korean Ecommerce Giant Coupang Saves Farfetch
Luxury fashion marketplace Farfetch has been bought by Seoul-based ecommerce firm Coupang, with $500mn (£395mn) in emergency funding provided to save it from bankruptcy. There were reports on Sunday that business management consultant AlixPartners had been lined up as administrators. Farfetch had faced a slowing luxury market and high cost of debt. Furthermore, Farfetch’s complex deal with Richemont to acquire a 47.5% stake in Yoox-Net-a-Porter, mostly in shares, has been terminated, according to a person with direct knowledge of the matter. Richemont has yet to issue comment. Earlier this year, the RetailX European Luxury 2023 report profiled Farfetch. It tracked how the marketplace has more than 1,400 sellers on its platform and was constantly reaching out to brand owners with the offer of hosting their wares on its site. This direct approach was designed to give smaller players a chance to leap into ecommerce with minimal outlay.
Are you a business owner in the B2C space who is looking to start a marketplace eCommerce platform? If so, it’s important to take some key considerations into account before launching. It can be difficult to know where to start when setting up such an ambitious venture, but with the right strategy and planning, you can ensure your new platform will get off the ground running. In this blog post, we’ll discuss ten core considerations a business owner should keep in mind while planning a new B2C market platform. By understanding these key points ahead of time, you will be well-equipped for success when finally going live with your new channel! Problems that marketplace owners have when launching an online marketplace platform include: failing to research whether there is a need for a particular industry, not putting enough effort into drawing reputable sellers, choosing the wrong model, not choosing the right software development partner, and not putting enough effort into building an attractive marketplace website.
Once upon a time, finding the perfect product online was like wandering the aisles of a library without a card catalog. But the advent of artificial intelligence (AI) has transformed the quest for the perfect online purchase and unleashed a remarkable evolution in ecommerce. From its first rudimentary keyword-based tools to today’s ability to decipher intent and deliver personalized results, the evolution of AI in ecommerce has been nothing short of revolutionary. It has fundamentally altered the way we explore, discover and embrace products in the ever-shifting landscape of online shopping. The use of AI in ecommerce has uncovered numerous lessons about how modern businesses should operate and engage with their customers. Here are some key insights that can be applied to any industry building with AI.
Consumer demand for refurbished and pre-owned goods in Britain and across Europe has created a billion pound ($1.3 billion) business for Amazon (AMZN.O), its UK boss said. Many retailers and manufacturers expect that trend to continue as shoppers, hit by rising prices and borrowing costs, look to save cash and buy more sustainably. John Boumphrey, Amazon’s UK Country Manager, told reporters that in the UK alone the online retail giant last year sold more than 4 million used or refurbished products at a discount. In the first nine months of 2023, Amazon’s sales of second-hand goods in the UK increased by more than 15% on the same period last year, he added. Amazon UK’s total revenue in 2022 was 24 billion pounds. “Customers are telling us that they’re shopping second-hand items to save money in the ongoing cost of living crisis and because they want to shop more sustainably,” Boumphrey told reporters.
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