Adrien Nussenbaum, CEO of Mirakl Inc spoke to Talk Retail about how retailers can maximise the sales potential of their online marketplace during Black Friday and Christmas promotions.
Many of the world’s biggest and most well-known retailers now operate their own online marketplace, including 50% of US top 10. From supermarkets to electrical retailers and department stores to sports & leisure, all have been attracted by the potential to offer better service to their customers, to offer a greater range of products and of course, grow their e-commerce revenues.
We are about to enter the busiest period of the year for retailers, where Black Friday (now firmly established as a global phenomenon) and Christmas see enormous promotional activity and account for a large proportion of the year’s total sales. It is obvious that the marketplace’s role during that time is more strategic than ever.
The challenge however is to ensure that third-party sellers support the overall brand and align with the overall promotion strategy. Coordinating a disparate and growing number of sellers is no small undertaking, but there is no reason why an online marketplace cannot be an integral part of Black Friday and Christmas promotions, nor indeed promotions at other times of the year. Here is how best to go about it:
1. Cross-company collaboration
If a retailer operates its own marketplace, effective and timely collaboration across teams is imperative. This should particularly involve the retailer’s buyers communicating to the marketplace team, a list of strategic products they cannot or may not be able to offer in the upcoming key promotional period.
This could be due to a lack of stock or perhaps profitability issues around that product, but sharing this information, it gives the marketplace team a chance to make up any shortfall during the promotional period. A key benefit of an online marketplace is that it allows a retailer to offer a much broader range of products without inventory, and this is an occasion where this really comes into play.
An audit of the sellers and the products they sell means that the retailer can ensure not only are there sellers around to offer such products but that they can also include them in any seasonal promotional offers.
2. Conduct a seller performance review
A 2015 eBusiness Guru study showed that more than half of marketplace sellers have margins above 20%, while 6% have margins more than 50%. If a retailer is smart then it will always have a good idea about which of its sellers are in the latter category and perform to the standards the retailer requires. But this is especially true in key promotional periods, where poor service such as late delivery of products, tends to be noticed much more by the customer.
So retailers must look at how their marketplace performed during previous promotional periods, evaluating each seller on a number of key service criteria. Conducting such a seller performance review before Christmas is important to identify any sellers at risk and allows the retailer to request an action plan from them to improve their performance and / or offer its own stipulations on improved performance. Operating a marketplace with a platform that integrates advanced automatic scoring and SLA enforcement for sellers is definitely a must-have.
3. Getting your best sellers onside
If a review of its sellers allows the retailer to improve poorly-performing sellers, then it also allows them the opportunity to involve the sellers that they think will really deliver over the promotional period in question.
A good marketplace operator should always have its finger on the pulse as to which of its sellers get the best customer feedback, offer the most popular products, deliver the best service and ultimately, make the most money. During key promotional periods these sellers must be briefed beforehand and the retailer should ensure these sellers and ready and able to participate. This can mean letting those sellers know about the retailer’s own promotions and ensuring they can offer complementary products, or even including certain popular products in the main promotion.
Given that 8% of all products bought online are bought from an online marketplace, involving marketplace sellers in a seasonal promotional period is highly advisable and can help make Black Friday, Christmas or another promotion be a huge success for the retailer in question.