At the Ecommerce Club Dublin Working Lunch on 26 April: Multichannel, Omnichannel and Marketplaces we learned a great deal about how social is becoming the new ecommerce boundary and its impact on omnichannel and marketplaces in particular.
Ciaran Bollard, Managing Director of Kooomo cloud commerce platform explored how developing the right digital commerce strategy today will future-proof a business for tomorrow, how to stay competitive and how businesses have to act fast and smart.
Multichannel, Omnichannel and Marketplace strategies have helped Kooomo’s customers enter new markets, build brand identity and achieve impressive revenue growth. And we were lucky enough to be joined by Ian Snipper, Head of Online Selection process and Journey at Avoca and Abbas Bari, Managing Director eBay and Amazon at iClothing, to hear their experiences.
It was a particularly good day for Koomoo, as it had just been named in Gartner’s Magic Quadrant for Digital Commerce 2017. Ciaran talked us through what makes Koomoo so special, which is the incredible range of plugins the platform offers, allowing customers to manage logistics, order and warehouse management, social, data analysis, CRM and, of course, marketplaces. With 190 different features, Ciaran argues that Koomoo provides one of the most effective platforms for scaling up a business.
One of the key things to remember when working with a platform, or a marketplace, is that you need to understand its benefits and problems specifically as they relate to your business. And that can be a challenge. One of our guests admitted that sometimes, where there is little to no digital experitise or experience in the company culture, that it can feel like attempting to drag the company into the nineteenth century!
What Gartner and Forrester argue is that the digital ecosystem is going to be about plug and play – different businesses and markets will have different requirements, and platforms need to be responsive to these needs as omnichannel continues its march through customer expectations. This plug and play can also cut down operational expenditure when the add-ons have already been integrated into a platform and simply need to be connected.
The point is that with omnichannel it’s vital to be able to manage everything from one place – especially with Gartner predicting that by 2018 around half of all ecommerce sites will be using technologies from at least 15 different vendors. If these aren’t integrated then how can an omnichannel strategy work? There isn’t time to upload data into a range of systems – its needs to be automatic or you simply can’t serve the customer in the way that they want. The best way to do this is through a SaaS platform, predominantly down to its ability to synchronise stock.
This flexibility and robustness needs to be built in from the beginning, in order to match the growth that is expected in ecommerce. Projections include:
- Worldwide retail ecommerce sales will reach $1.915 trillion this year
- Double digit growth will continue through 2020, when sales will top $4 trillion
- eMarketer estimates sales will top $27 trillion in 2020
- eMarketer expects retail ecommerce sales will increase to $4.058 trillion in 2020
- 14.6% of all global retail will be online by 2020
The day to day processes from social to stock management have got to be streamlined. Many ecommerce businesses already suffer from shipping challenges and low margins, so they need a way to connect the digital ecosystem to traditional retail, all the while driving footfall as well.
Reports suggest that 25 per cent of customer purchases using click and collect will buy more product when in-store, which drives efficiencies, options and in-store sales. If your business can integrate the PoS system into its digital ecosystem, then the customer journey (and the operational journey) become completely connected.
“Instead of seemingly running several different businesses, merchants can use a single commerce platform to have a holistic view of sales, manage inventory, fulfill orders and optimize pricing and listings across channels — all in one place”. Armstrong, C. (2017). Omnichannel Retail in 2017. Why this matters is consumer expectations. Today these are already far beyond what most retailers have to offer.
Marketplaces are going to play a fundamental role in the future of ecommerce. Globally marketplaces are expected to own 39 per cent of digital commerce sales by 2020. For example, according to Statista, “Germany and the UK, Amazon’s biggest markets after America had €12.8 billion & €9.5 billion worth of sales in 2016.” Meanwhile eBay reached 167 million active users in 2016.
Did you know? –
- Over 2m retailers sell through Amazon marketplaces
- 25m merchants sell on eBay
- eBay and Amazon account for 41% of all internet traffic in Europe
- 4 in 10 online sales are expected to be on marketplaces by 2020
- There are over 300 retail marketplaces
Every business is going to need a strategy to address this. Which marketplace you choose and how you use it will depend on the stock and market – if it’s a high quality product you might sell end of line stock on Amazon to avoid cannabilising your own sales. Remember to think about mobile – 60 per cent of ecommerce purchases are made via device and that can cause problems, especially with barcodes.
Ciaran argues that Koomoo would expect to see results of 3-4 times productivity and its pricing model (part of sales) makes it appealing to those decision makers who are wary of significant investment. As he says, “At Koomoo we’re trying to democratise ecommerce.”
And you can download the Gartner Magic Quadrant for Digital Commerce Report free from Koomoo’s site www.kooomo.com