Online Marketplaces: A New Path to Boosting Customer Loyalty and Trust
Let’s be honest, at the end of the day shoppers just want to find the products they want in the easiest, most convenient way possible. We know that there are shoppers that are loyal to their favorite retailers and brands, but years of industry research also tells us that most shoppers can be fickle and will open their wallets for the retailer that's offered them the best price on the exact product they were looking for at that specific point in time.
At a time when the battle for consumers’ loyalty and wallet share is fiercer than ever, how do retailers ensure they have the right products available 24/7 and eliminate the possibility for consumers to shop with their competitor down the street?
According to a recent Forrester study commissioned by Mirakl and ChannelAdvisor, online marketplaces may be the secret ingredient for retailers to interact and engage with consumers in a whole new way, and give them access to the products they want. The Forrester study concluded that online marketplaces boost customer loyalty, increase average order values and build trust.
Among the findings uncovered by the survey, three stand out:
1. Online marketplaces enhance the customer's shopping experience: Consumers are shopping on online marketplaces at least three to five times per month. This is due in part to the fact that online marketplaces allow consumers to shop more conveniently, compare and explore a wide assortment of products and services, all while discovering new retailers. According to the Forrester report, 95 percent of U.S. respondents agreed that marketplaces offer the convenience they appreciate. In addition, marketplaces offer competitive prices, flexible and better shipping, and more variety, leading to a better shopping experience.
2. Building trust is a central part of marketplaces: Visibility into product and seller performance builds consumers’ confidence in a seller, even if the seller is unfamiliar to them. That being said, consumer-generated content is a crucial component to building trust with shoppers. Eighty-eight percent of U.S. consumers cite ratings and reviews as important attributes to purchasing via an online marketplace. To earn the trust of consumers, marketplace sellers must deliver a high-quality experience while avoiding long delivery times, damaged items and low-quality products. Therefore, marketplace operators need a robust technology platform that can automate and enforce seller quality control.
3. Marketplaces foster deep customer relationships: On a global scale, the majority of consumers indicated they were satisfied with marketplace purchases, with more than 90 percent translating into increased customer loyalty. In the U.S. alone, 94 percent of consumers said they would shop with same marketplace again if getting a similar product. Driving customer loyalty is a key component to creating any successful brand and bringing long-term value to the retailer.
It’s Time to Create Your Own Online Marketplace
The results from the report emphasize that marketplaces are here to stay. They offer retailers a way to capture new revenue through sales commission without the headache of storing and shipping added inventory.
To take advantage of the growing popularity of marketplaces, Forrester recommends retailers develop a strategy to build their own marketplaces and seize this opportunity. In doing so, retailers should focus on boosting customer experiences, building trust and getting noticed. Forrester also suggests that retailers building their own marketplaces should proactively recruit and continuously assess sellers. To do so, some retailers have created an invite-only model to vet select sellers.
Perhaps most importantly, retailers need to enhance their technology capabilities to support their marketplace strategy. A marketplace technology must support and manage third-party content and orchestrate orders and communications between customers and suppliers. It's crucial that marketplace platforms offer search, merchandising and personalization tools, along with product content management, inventory management and order management, among other capabilities. A third-party organization that specializes in marketplace development can help guide retailers and provide the necessary expertise to establish a marketplace that will boost customer loyalty, increase average order values and build trust.
Adrien Nussenbaum is the co-founder and U.S. CEO of Mirakl, a SaaS-based online marketplace solution.
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