Interviews, insight & analysis on digital media & marketing

The NDA Roundtable: How marketplaces are changing the way we shop and sell

Part two of our coverage of our roundtable produced in partnership with Maze-One UK , the marketplace specialist agency.

Ban Van Kesteren, Reckitt Benkiser’s EU ecommerce director; Remco Evers, HG manager of ecommerce and marketplaces; Gracia Amico, chair of Pet Mate; Remco Schevenhels, ecommerce manager, Signify (formerly Philips Lighting); Roger Morgan-Grenville, MD of Dexam; Jane Savage, head of marketing and channel strategy for Roc Skincare; Tejesh Adavi, Nutravita’s head of marketplace strategy, sales and operations; Jag Lehal, founder of JAG London and Frank Mertens, founder of FM Consulting joined Maze-One London’s co-founders Rupert Staines and Dan Brown at the virtual round table held earlier this month.

Marketplaces such as Amazon, eBay, Walmart and ASOS have helped change the way we shop: they are, says Maze-One London’s Rupert Staines, the shopping malls of the future. 

Yet many businesses haven’t grasped the opportunity, largely because of the myths that surround marketplaces that is starting to change, in part because of the acceleration of online purchasing following the Coronavirus pandemic that saw people increasingly look to the Amazons and Ocados to get the goods they needed.

In fact, Ocado’s share price hit a record £22.36 on June 1, making it the best performing stock on the FTSE 100 in the second quarter of 2020, boasting a 66% rise. It now, say industry watchers, operates more as a tech giant than an online grocery store. A marketplace in the ascendancy, globally. 

Executives from companies including Signify (formerly Philips Lighting), Reckitt Benkiser, Roc Skincare, JAG London, Dexam and HP, and marketplace specialist MazeOne were brought together to discuss how brands today can stand out online and reach new customers.

Playing to a channel’s strengths

Brand presence is a particular concern surrounding marketplaces. It has been common for marketers to believe that being listed on, say, Amazon will devalue their brand and that they are not as in control of their image as they want to be on all channels. This is particularly true in luxury, but a well thought-out marketplace strategy will not only help sales in that channel, but in a brand’s own sites and stores, too. 

It’s a case, says Adavi, of playing to each channel’s strengths. “One of the reasons we are  a  seller (responsible for distribution on the platform) as opposed to a vendor (where goods are effectively sold to Amazon to sell and distribute)  right now is the element of control. Especially in the digital space, we feel that as a brand we need to be involved in terms of the content and customer engagement.”

Nutravita launched as a brand on Amazon in 2014, with a DTC site following the year after, though marketplace remains its biggest channel. “It can be challenging at times maintaining a brand on Amazon,” he said, citing those content and customer engagement restrictions. 

“What we’ve really been focusing on is offering a standardised experience to customers, getting as many eyeballs on our products out there and having some uniformity and conformity, so that we start getting recognition from the customers.”

Mertens concurred: “Some of the issues that CPGs have is that with many different sellers that brand consistency is not assured. It’s important to explore the use of Amazon stores and really start to create an experience that matches what you want, and to guide people to parts of that store for conversion.”

From B2B to DTC

Morgan-Grenville said his company, Dexam, was moving from a business-to-business only supplier of kitchen equipment to having a DTC offering. “One of the challenges for us is to move from vendor to seller on the Amazon platform.”

The biggest opportunity, however, lay in developing a strong hybrid strategy that encompasses marketplaces, digital DTC and a physical presence on the high street. Adavi said: “One of the main lessons from Covid is that it is very risky to be very heavily reliant on one channel, as Primark was with its bricks-and-mortar stores.”

Such a hybrid model could see a brand promote exclusives on its own site and use Amazon and other marketplaces to d-list or discount, according to Morgan-Grenville.

Yet, marketplaces are getting more luxe, think Net-a-Porter, and even Amazon is in talks with car marques to sell directly online: considered purchases are most definitely happening in these spaces. 

Many luxury brands are yet to be convinced, believing that being on Amazon tarnishes their image. Said Lehal: “For luxury brands going on Amazon can be quite daunting because you lose your premium branding. It is really important to choose the right marketplace for your brand.”

That said, she hopes to be one of the first luxury brands to benefit from Amazon’s investment in this area, and use it as a springboard to launch internationally. 

Being able to scale internationally is one of the benefits that marketplaces bring.

Read the first article in this series here and the third here.