on 05 May, 2015.
This year at Catalyst EU, ChannelAdvisor CEO and Co-Founder Scot Wingo presented his view of the e-commerce landscape. The interpretation was portrayed as a ‘Game of E-Commerce Thrones’, using the bloodthirsty backdrop of the blockbuster series to explain the current state of e-commerce.
The marketplaces were the players, equivalent to noble families at war, vying for domination. These are the usual suspects, Amazon, eBay, Google, Apple, Facebook and Alibaba. Marketplaces have undeniably raised the bar for e-commerce all over the world. Consumers have more selection, and confidence than ever before. This is reflected by the $363bn turnover of Alibaba, $174bn of Amazon, $83bn of eBay, and Facebook’s 1.4bn users. This has led to the conclusion that Marketplaces are ‘eating the world’. But is this really the case?
Whilst the statistics paint a picture of unassailable dominance, there is another school of thought. Speaking to Internet Retailing Magazine in March this year, John Ernsberger, Co-Founder and CRO of Stella Service stated that ‘service will define the next decade of ecommerce.’ Equally, Emma Herrod also wrote about understanding customer behaviour to gain competitive advantage, and in April this year Chloe Rigby explained Forrester’s conclusion that retailers to ‘obsess’ over their customer to succeed.
Our industry is placing emphasis on innovation, personalisation, and the power of the customer in today’s ultra-competitive e-commerce space. This leads to the questions – Can marketplaces compete with this?
Whilst marketplaces offer choice and value, can they really deliver the service levels and understanding that a direct to brand experience can? According to recent research by Digital River, direct to consumer commerce is mutually beneficial opportunity, confirming that in many instances consumers actually prefer this route.
44% of consumers felt they could find a lower price dealing directly with a retailer, 41% assumed a direct route would bring more choice, and 29% cited brand loyalty as a reason they would deal directly with a retailer.
In addition, better service (17%) and personalisation (12%) enhance the experience and lead to customer preference being directly associated with the retailer.
Consumers are increasingly savvy and shrewd, and there is a universal requirement to innovate, or be defeated. However, is marketplace domination a foregone conclusion? Far from it. The next few years will see companies truly express themselves through online retail, and it is safe to say that the stronger the bond between the retailer and the customer, the more likely success. In this instance, the direct route is preferable.