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“You could tomorrow start an online marketplace business out of your basement and run it very successfully. But if you’re working for a major brand, that’s not going to be how you set up the experience.”
— Jamie Dooley, Digital Practice Partner, The Partnering Group
In the wake of COVID-19, many brands quickly understood that they weren't adequately prepared for the online shopping rush. Even brands that were able to capture a fair amount of the new digital demand faced a complicated reality: The key to a digital shelf-oriented future is to offer as many options and channels as possible to discover and buy products.
One of the most notable channels that's seen significant attention in recent months? Third-party (3P) marketplaces.
For some brands, 3P marketplaces are seen as a Goldilocks fit. Brands can receive the traffic and awareness associated with first-party (1P) selling while also better controlling the consumer experience that comes with direct-to-consumer (D2C) programs.
The Digital Shelf Institute (DSI) presents the D2C Strategy Playbook Series, a virtual program of expert-led sessions outlining how to navigate a D2C program in this "new normal." Ecommerce expert Jamie Dooley hosted the most recent session, "Drive D2C Sales With 3P Online Marketplaces," outlining how brands can leverage these marketplaces successfully.
Jamie Dooley is the digital practice partner at The Partnering Group and former ecommerce and merchandising leader at Keurig Dr Pepper, Dorel Juvenile, Wayfair, and Target. He has launched some of the largest 3P marketplace programs, helping brands bring in hundreds of millions of dollars in online sales.
Dooley detailed some of the main benefits of selling on 3P marketplaces and offered suggestions on how brands can get up and running with marketplaces in time for the 2020 holiday season.
Marketplaces are offered by some of the top online retailers in the world, such as Amazon, Walmart, and eBay. By listing products on their marketplaces, brands can tap into the billions of visits those sites get every month.
When an online retailer de-lists a product through 1P sales, marketplaces offer the ability to quickly pivot and sell that same product — allowing brands to continue to tap into the retailer’s audience.
One of the most significant problems facing brand manufacturers today is unauthorized sellers on 3P marketplaces. By investing in marketplaces directly, brands can go head-to-head with unauthorized sellers, offering a better consumer experience and price to recapture sales.
For brands launching a new product through their 1P or D2C site, marketplaces offer an excellent way to test consumer feedback before making additional investments.
This strategy also applies to new content types or product bundles, where brands can get data on their effectiveness before launching full-scale programs.
Marketplaces can help clear out older products or excess inventory that no longer have a place in a brand’s D2C or 1P sales strategy.
Brands can mitigate damage in a situation where major retailers like Amazon need to once again reprioritize essential goods by pivoting to marketplace selling.
There is still time to launch a 3P marketplace before the 2020 holiday season, according to Dooley. To accelerate the process, there are three critical steps brands must take.
One option Dooley recommends for those looking to get up and running quickly is to look for options offered by major retailers, such as Fulfilled by Amazon or Walmart Fulfillment Services.
This investment is essential to help establish and scale 3P marketplace selling, such as enterprise resource planning (ERP), customer communications, and content syndication that guarantees what consumers see on marketplaces is accurate and up to date.
Dooley recommends investing in retailer advertising spend, which will help brands quickly gain a leg over their competition and gain greater brand awareness and product page traffic. It's important to note that these efforts must be overseen by a team member with the time and ambition to dedicate efforts to growing a complex and collaborative program.
Marketplaces can be an incredible source of revenue and a complementary effort to 1P and D2C programs. As the 2020 holiday season quickly approaches, the ability to facilitate a more direct connection with consumers while also tapping into the size and reach of an Amazon or Walmart should be considered by any brand manufacturer who understands the rapidly growing importance of the digital shelf.
Watch the full session to learn more about how your brand can drive D2C online sales with 3P online marketplaces.
