Almost all major retailers in different product categories have chosen the path of development through marketplaces. In April 2020, Hoff launched the Home Furniture and Products Marketplace. Previously, the company traded through third-party platforms.
1. Technological breakthrough
Just a few years ago, there were no ready-made technologies for creating marketplaces in the USA - pioneers acted by trial and error, creating infrastructure from scratch. And if three years ago, when launching a marketplace it was necessary to invest at least $ 15 million for the pilot e-com project of the future trading platform, today the construction of a fully working model fits in 2-3 million or more. Moreover, a marketplace can be created in the shortest possible time, using ready-made box solutions or by contacting a specialized IT-company, working on a "turnkey" basis.
2. Accumulated experience
Not only the sums change for the development of MVP (minimum viable product, minimum viable product) - there is also an understanding of "how to do" and experience that reduces the possibility of error. In this sense, the experience of Ozon is significant. The first unsuccessful attempt to launch a marketplace remained in 2013. A year later, the second attempt, a newly created platform with Sapato, was sold to the KupiVIP brand. Only with the fourth attempt in 2019 Ozon was successful launch of marketing, the company closed the year with a record sales volume. This is just one example, and the market, rapidly growing successful projects in the category of marketing - eloquently confirms the trend.
3. Sharp breakthrough in logistics
Delivery is becoming cheaper and less time-consuming. DHL, BoxBerry, PickPoint and others are changing with the market. The quarantine situation has shown how quickly logistics companies can adjust to the needs of their customers: the traffic has increased dramatically, while a significant number of distribution points across the country have been closed. All this complicated the situation to the maximum, but the delivery was functioning. Had this happened a few years ago, online sales would have been simply "frozen".
Also delivery is optimized through the redistribution of logistics hubs: companies rely on cross-regional delivery, moving away from a centralized federal system. This reduces the cost of delivery and "entry threshold" to the market for new companies. Thus, WildBerries and Ozon plan to open large trade and distribution centers.
4. Mass digitalization of business
Among the largest companies there is a trend for digitalization. According to KPMG research, 63% of companies have already developed a digital transformation program and are implementing it in practice. But often this does not mean an integral program of digital optimization, but point solutions and the launch of pilot projects in certain areas. Companies expect from digitalization, first of all, to increase efficiency and reduce costs - this was stated by 77% of the interrogated. At the same time 51% of the companies expect that investments into digital technologies will pay off in less than 2 years, another 44% of the interrogated expect return of investments within 2-5 years.
Who is the e-com market open for?
It has become fashionable to be "digital" - it classifies a company as modern and progressive, allows to compete in the market and increases profitability. To join the number of "digital" companies, it is important to meet a number of criteria.
Digitized assortment (PIM)
The first step towards creating an online store is the digitization of goods. This process is very time-consuming: for each item you need to provide quality photos, structured description, size, characteristics, reviews, prices. PIM (Product Information Management) is a common name for systems that help businesses manage product information. PIM helps to aggregate and store information about products, complement, refine and sort it by building it through channels. All data entered through this system are automatically exported to other departments, programs and partner companies, thus ensuring uniformity.