The pandemic upended retail and accelerated ecommerce as a key (and sometimes only) channel for all brands. McKinsey estimates that consumer demand for online shopping jumped ahead 10 years during the first three months of the pandemic, and that growth has been sustained. As an executive, it is your job to capitalize on growth opportunities in ecommerce, specifically digital marketplaces, to maintain your brand’s profitability.
At Pattern we hear the same feedback from executives, their fear and trepidation around marketplaces has them questioning, “Should I even bother putting my brand on a marketplace?” This is understandable because the costs and complexity to succeed on marketplaces are higher than expected and progress is slow or stagnant. Once you add on other challenges to success, which include new competitors, rising customer expectations, and lower profit margins–it’s easier to ignore than solve for.
But brands really have no choice. They must invest in marketplaces to command their share of an exploding global market. Working with Pattern takes away the fears and anxiety since we will manage dozens of digital channels and global marketplaces while tackling distribution, advertisement, creative teams, pricing, fulfillment, and more.
Why Are Brands Failing on Marketplaces?
Limited resources and a lack of technology.
Let’s break it down. Imagine the pressure placed on ecommerce teams–in a given region, they have been tasked with getting products onto every marketplace and channel, keep listings fresh and optimized for conversion, create and manage direct-to-consumer sites and relationships, and guide advertising to drive traffic for all of these channels along with distribution and fulfillment.
To do this for just one region, ecommerce teams often stitch together a set of agencies, partners and software stacks that weren’t designed to work together. Now multiply that by 10, 50, 100 different and unique regions who each have cultural and logistical gaps that make scaling difficult to impossible for a brand.
To win on digital marketplaces, you’d need endless resources, but there is another way.
3 Steps to Success on Marketplaces
Step 1: Focus on the Ecommerce Equation
Growing marketplace revenue is one simple equation. Revenue = traffic x conversions x price
By focusing on this equation (and its implied competencies), your brand’s profitability will increase. Each part of the equation is essential to achieving growth, and you probably need more than three or four people on your ecommerce team to do it right. As the industry’s first and leading ecommerce accelerator, everything Pattern does to help brands accelerate is tied to this equation.
Step 2: Solve the Equation
Solving the equation is a combination of resources and technology. Pattern is able to fill gaps in resources, execute tangential activities, like enforcing MAP policies, and provides marketplace expertise so your brand can harness the power of influencers, data science, social media platforms, ecommerce acceleration technology, marketing, advertising, creative teams, search engine optimization (SEO), online marketplaces, live chat, price control, shipping logistics and more.
Step 3: Get the 2 Things Your Brand Needs
We know it is intimidating, but once you understand the complexity of digital marketplaces and competencies and resourcing necessary on each, your brand will be set up for success. But let’s be honest, even after you solve the equation, succeeding takes time and resources, which smaller teams typically lack. We hear time and again that driving traffic to your direct-to-consumer site alone can take 20 people. How is any brand going to be profitable with hundreds of ecommerce teams exclusively dedicated to each marketplace?
The better solution is to partner with an ecommerce accelerator, like Pattern, who can identify how long and how to get to profitability. In addition, Pattern uses its deep marketplace knowledge, real-time data and insights, proprietary technology and global team to manage every component of the ecommerce equation–driving traffic, increasing conversions, and price control.
Here is the point again: winning on digital marketplaces requires more of the right resources—people and technology—to unlock your brand’s potential.
Executives work with Pattern to crush their fears about digital marketplaces by leveraging the resources and technology from the world’s top ecommerce accelerator. How do you fill the resource gaps? Contact Pattern.
Based on article, “The Executive Dilemma: How Consumer Brands Can Approach the Challenges of E-Commerce”, by David Wright, CEO Pattern, Newsweek Expert Forum contributing editor