The new marketplace identity: Best practices For operating an enterprise marketplace

The past two years have upended retail's traditions and core beliefs. Changing social behaviours and economic patterns have led to the rise of direct-to-consumer (D2C) platforms, social commerce and consumer-to-consumer (C2C) resale/thrift markets, but perhaps the most influential change has been the rapid growth of online marketplaces.

Research from my company's recent study showed that online marketplaces grew at twice the rate of traditional eCommerce for the second year in a row. In 2021, eCommerce sales growth reached 12%, while marketplaces achieved same-site growth of 25%. Even more significant, the number of businesses that began selling on marketplaces increased by 46% from 2020 to 2021—pointing toward rapid growth in the years to come. Additional research from OC&C Strategy Consultants found that online marketplaces are set to grow by 15% annually and are on pace to match direct eCommerce spending by 2025.

As companies adopt the marketplace model, questions around implementation remain. What can companies do to ensure their enterprise marketplace succeeds? Before major retailers begin scaling their businesses with marketplaces, they must commit to an approach that sets them up for success across the organisation.

This article is the second in a three-part series examining best practices for businesses looking to deploy their own marketplaces. In this article, I'll cover operations, while the third article in the series will examine change management.

The shift to the marketplace model can feel like an identity crisis for some brands. What does it mean when a brand is no longer just selling its own goods? How can they retain their identity while supporting a new network of third-party sellers? As an organisation integrates a marketplace into its strategies, these three approaches can help to ensure success while maintaining a brand's essence and values:

1. Embrace curation at scale.

The term "curation" has taken on a new meaning in commerce, with high-end enterprises using it to indicate hand-selection of products and a minimal, exclusive assortment. The simpler definition of curation has been lost: to select and care for objects shown as part of a collection. Successful curation doesn't require a dramatically reduced product assortment. Consider the world's largest art museum, the Louvre: its eight curatorial departments work to ensure its vast collection has a point of view, highlighting the strengths of each piece while delivering the best possible experience for all visitors.

Offering a wide range of products at competitive prices is essential to meeting customers' expectations, but retailers must do so without compromising brand DNA. Scale and curation must go hand in hand in the most successful enterprise marketplaces. This process begins with the selection of marketplace sellers, choosing partners that align with the company's brand and service offering. Internal teams should be empowered to identify high-quality sellers through recruiting efforts and aggregator partners, resulting in a strong base of qualified, pre-vetted sellers.

Marketplace technology can play an essential role in curation by automatically monitoring and managing sellers' performance and their offers in real-time. With the proper guardrails around seller performance and product ratings and reviews, retailers can make sure that their growing marketplace reinforces loyalty, trust and confidence among their customers.

2. Include the marketplace on all channels.

Marketplaces thrive when they are seamlessly integrated into a business's existing channels, not siloed in a marketplace-only section. Buyers recognise the marketplace as an extension of first-party offers, which frees organisations from developing a new digital channel strategy so they can instead tap into the processes already working for their business.

A thriving marketplace should also be integrated into the retailer's in-store strategy to maximise the benefits for both online and brick-and-mortar performance. Pickups, returns and pathways to order marketplace products while in-store can help to drive in-store traffic while reinforcing the marketplace's role as an extension of the existing assortment.

The omnichannel approach can also help organisations selling to business buyers. With the right tools and training, field sales representatives and call centre employees will be able to offer marketplace products alongside an organisation's core catalogue, increasing overall sales and customer satisfaction.

3. Market the marketplace, not just the business.

Introducing an enterprise marketplace allows retailers to grow revenue in two ways: First, they can increase sales to existing customers by offering more assortment; second, they can use the marketplace's expanded offerings to attract new customers. A brand's marketing and customer acquisition strategies should reflect this opportunity, emphasising the marketplace itself in addition to the brand as a whole—before, during and after the marketplace's launch.

• Before launch: Develop a comprehensive marketing plan with strategies for introducing the marketplace as well as integrating marketplace offers into existing channels. Consider how the marketplace will be featured in email marketing, paid advertising, social media, content and search engine optimisation.

• During launch: Execute on a communications campaign that addresses customers, prospective sellers, analysts and press. Retailers should dedicate space on their eCommerce site to educate buyers about the marketplace and its benefits.

• After launch: Marketplace products must be given equal weight in the brand's customer acquisition strategy. Integrate these products into regular promotions and digital marketing campaigns, and incentivise sales teams to include the marketplace in their customer engagement and sales strategies.

Operating a marketplace requires complete investment from every aspect of the business. Siloed pilot projects and limited rollouts without the company's full support are doomed to fail, limiting the marketplace's potential before it can thrive. By committing to a well-designed marketplace strategy, businesses can maintain agility and drive growth in a rapidly changing eCommerce landscape.