Cluster and Mirakl join forces to provide out-of-box marketplace catalog and assortment data for retail customers.Continue reading
For eCommerce marketplaces, it’s always the same story: they rely on sellers to provide complete and accurate product data, but what if changing ownership were a possibility? What if marketplaces actually owned their own product catalog data and took the reliance off of seller inputs, while still being able to provide accurate product information for consumers?
There are many roadblocks typically that prevent marketplace enterprises from achieving this outcome, but it is not an impossible feat. That’s why we caught up with Cluster CEO Ori Greenberg, in an interview to talk about the challenges, opportunities, and best practices for driving this industry to change. By transferring ownership of product catalog data from sellers onto marketplaces – success becomes possible for all parties involved, and below we dive into how and why.
Q: Who owns the product data catalog today in the eCommerce market and why? Is this the standard for most marketplaces?
GREENBERG: In the eCommerce marketplace landscape it always tends to be the same story. A marketplace starts by relying on sellers or merchants to provide product data, but quickly realizes it is a mess:
- The data is insufficient, and not normalized
- The marketplace catalog experience is bad for consumers.
- The marketplace catalog is underperforming in SEO and marketing in general.
- It is actually hard for sellers to list items and causes friction, sending 50% of them to abandon the onboarding process.
However, owning the product data catalog makes so much sense. The sellers can help, but the marketplace must own the process, the guidelines and the standards – to help your sellers comply with those standards.
And if you’re thinking this is not possible, this has been done successfully by enterprises like Amazon’s marketplace, and Google Shopping – and in looking at those examples, the results are clear. That being said, no one has the breadth that Amazon and Google have by themselves – and that’s why Cluster was created.
Q: What does the ideal marketplace product data catalog look like?
GREENBERG: The ideal marketplace product data catalog should be:
- Rich with structured product data.
- Detailed in taxonomy.
- Inviting, filterable and pleasant in every way.
Q: What is the best practice when it comes to ownership of the product catalog data?
GREENBERG: As mentioned earlier, marketplaces should own the catalog onboarding process, guidelines, and standards – and marketplaces need to help their sellers and merchants comply with those guidelines.
Q: Why is it so essential to follow these best practices?
GREENBERG: Loosening the rules on product data catalog ownership can cause a mess that spills into other business aspects across the board, and result in poor customer experience, bad seller experience, and poor performance overall.
Q: What are the roadblocks that keep marketplaces from gaining ownership of their product catalog data?
GREENBERG: Gaining ownership of your product catalog data is hard to set up, and taking the first steps can be difficult. You’ll ask yourself why would the sellers go through all the trouble to onboard their product information, and how do I even decide what to ask from them?
The reality is that it is a lot easier just to tell people, “Here you go – a platform – now just list your products! We’ll use Machine Learning and AI in the future to make sense of what you write!” And then you find out you can’t accomplish this, and the technology just isn’t there – but it’s too late. And, changing your practice becomes even more difficult.
Q: How can marketplaces work with sellers to create a mutually beneficial catalog onboarding process?
GREENBERG: First, marketplaces need to realize what data they need in order to provide a good customer experience and a frictionless seller experience. Next, help the existing sellers by adjusting their current catalog data. Provide clear guidelines on what is needed moving forward, and proactively help them provide the required catalog data. Examples of how to do this include:
- Pre-build a product data catalog. Start with top-of-mind categories,
- Match existing items with the ones in the pre-defined catalog.
- Provide matching tools for new products added to the catalog.
- Enhance items that are not in that pre-defined catalog on the fly using advanced tools and third-party data providers like Cluster.
Q: How does Cluster help?
GREENBERG: Cluster is an eCommerce data provider that solves for creating a superior online shopping experience through quality catalog and product data for marketplaces and online enterprises (including adjacent markets like eRetail, brands, and financial institutions).
When marketplaces do not have a complete understanding of their product variants, they can oftentimes end up with duplicate listings, which confuses shoppers and in turn, sends them to competitor sites. Building a quality product data catalog is a challenge, but Cluster can identify, validate and enhance product data by matching duplicate products, so inaccurate information doesn’t find its way in front of your shoppers.
Q: What does the future of eCommerce marketplace data look like?
GREENBERG: No new marketplace can provide an Amazon-like experience, which consumers are now expecting, from the get-go without requiring any help. From the product data catalog to the fulfillment of orders, marketplaces will need to partner with industry-leading vendors to get ahead of the game.
Mutual Marketplace and Merchant Benefits
Changing the script of a story (especially in the middle) is not an easy task, but the results can make for a much happier ending. In this case, restarting can seem daunting but the mutually beneficial results for merchants, marketplaces, and ultimately consumers, can make a major impact on success. Talk with a Cluster expert today and see how our game-changing insights can work for you.
When time allows, I love to geek out with customers’ data. Even if the customer didn’t ask for anything, I love finding trends, data gaps, assortment gaps, and insights in general that are intriguing. Usually, I keep it to myself, but sometimes I can’t help but share it with the customer/account owner.
Quotes to Live By:
For basic purchases, Amazon and Walmart. For fun, spontaneous or emotional purchases: Facebook Marketplace. I love the sustainability aspect, plus the fact I can ‘Uber’ a product my way in 20 minutes!
Describe Cluster in 5 Words:
Just because people can’t physically steal from online retailers doesn’t mean they can’t invade your business through fraudulent activities. In fact, about $20 billion in eCommerce losses were reported in the US — in 2021 alone.
If you manage or own an eCommerce marketplace, it’s absolutely crucial that you secure your business against online criminals with eCommerce fraud protection.
In this guide, we’ll tell you everything you need to know about eCommerce fraud prevention and 10 strategies that will keep your business safe.
What is eCommerce Fraud?
eCommerce fraud refers to when online hackers and scammers block and intercept transactions that happen in an online store. They can do this through a variety of methods that can steal money from either the merchant, the customer, or both.
As the world becomes more and more reliant on online transactions, scammers are finding new and creative ways to hijack customer data and commit fraud.
eCommerce fraud mitigation is not a one-time event. You must continually be vigilant and update your online platform’s security to keep up.
10 eCommerce Fraud Protection Strategies
Many business owners don’t begin implementing fraud protection for eCommerce until it’s too late. It’s always better to start being prepared and aware of different signs of fraud.
Let’s take a look at 10 different strategies that you can use for your online marketplace today.
1. Review Abnormal and Risky Orders
If you receive orders that seem odd or risky, it’s best to reach out to the customer to prove their legitimacy. Some examples of red flags include:
- Low-value orders from unusual IP locations
- Several orders placed in a row
- Different billing and shipping addresses
- Obscure shipping locations
- Abnormally large orders
If the customer doesn’t reply to your inquiry, there’s a good chance that the order was made from stolen data. You can also take a look at the customer’s order history to see if there are any odd patterns.
2. Limit Order Quantity
Orders that involve a high quantity of products can also be a red flag for scammers. You can up your eCommerce payment protection by limiting the number of products a customer can buy in a single day.
To do this, go back through your purchase data to determine the average number of products you typically sell. Then, set a limit to the number that can be sold at a single time based on this number.
3. Clearly State Your Business Policies On Your Website
It’s not only important to clearly state your policies for your customers to understand your business practices, but it’s also a way to help customers understand how to prevent fraud.
Some things your business should include are:
- A strong password policy to prevent scammers from hacking into customer accounts
- A return policy to clarify chargebacks and refunds
- Promotion and rewards policies to prevent fraud that may happen during promotions
The clearer you can make your policy, the better you’ll protect yourself against future fraudulent activity.
4. Use Address Verification Service (AVS)
Address verification system (AVS) helps verify your customer’s billing address with the card that they are purchasing with. This can help detect any suspicious transactions that happen in real time and increase price anomalies mitigation.
5. Require Card Verification Value (CVV) for Purchases
Requiring a card verification value (CVV) for purchases requires customers to add the three-to-four digit number as a required field. This adds an extra layer of security so that fraudsters can’t make purchases with just the front of a credit card.
This is one of the most popular forms of payment and fraud protection.
6. Use Other Verification Software
Although AVS and CVV are two of the most popular verification software out there, there are several others that you can use to enhance your eCommerce fraud management.
Some verification systems include:
- Email verification
- Customer Order History
- 3-D secure authentication
- Telephone number verification
- Postal Address Validation Services
- Payment protection
These extra steps can help you secure your platform against fraud.
7. Conduct Regular Site Security Audits
Make sure to conduct audits on your website regularly. Go through all of your plugins and make sure they are updated to the latest version. Here’s an example of an audit checklist:
- Check if shopping-cart software is up-to-date
- Check if your SSL certificate is working correctly
- Check how often you are backing up your store data
- Remove any inactive plugins
- Update strong passwords for every account
- Regularly scan for malware
There are also several eCommerce fraud protection services available that can help take care of everything for you. Things are constantly changing in the online world. It’s important to keep up.
8. Avoid Collecting Too Much Customer Data
One general rule of thumb is to never collect more customer data than you actually need to run your business efficiently. If there is ever a data breach in your store, hackers will only be able to take the data that is there, so the less, the better.
Avoid collecting any sensitive data like Social Security numbers, birth dates, and more.
9. Use Hypertext Transfer Protocol Secure (HTTPS)
HTTP is the main protocol used to send data between a web browser and your store. HTTPS is the more secure version of it. It encrypts data which can protect sensitive information from hackers. Use HTTPS by purchasing an SSL certificate.
10. Avoid Non-Physical Shipping Addresses
Fraudsters often use PO boxes or other anonymous locations to avoid being detected or having their physical address found. Avoid shipping any orders to PO boxes or other virtual addresses to avoid any fraudulent activity.
Take Control of Your Marketplace
eCommerce fraud protection is an ongoing process that never ends. As long as you’re selling products on the internet and there’s money involved, hackers will try to find new and innovative ways to invade your store’s data.
If you’re an online marketplace looking to identify reputable sellers, detect fraudulent prices and remove suspicious listings before customers get to payment, book a free demo today!
Just last year, retail eCommerce sales were an estimated $4.9 trillion worldwide. Over the next four years, it’s predicted to grow by 50% and reach almost $7.4 trillion by 2025.
Seems like a goldmine for eCommerce businesses, right?
Well, there are also anywhere up to 24 million online stores — and the number is steadily growing every single day.
It’s becoming more and more important for online businesses to find innovative solutions to stand out from the crowd. One recently popularized strategy is product matching.
This strategy is used to elevate the customer’s buying experience and stay competitive with other similar businesses.
Read on as we discuss everything you need to know about product matching in eCommerce and how it can be beneficial for both you and your customers.
What Is Product Matching?
Product matching is the term used in eCommerce when the same products are offered by different sellers in a single search result. This is done with the help of deep learning and a product matching algorithm.
To give you a better understanding, let’s take a look at the landscape of eCommerce right now. When people go shopping online, they’ll land on one of several different eCommerce platforms (whether they know it or not).
Some of the most popular platforms include:
Right now, more than 1.7 million merchants sell products on the Shopify platform. In 2020, Shopify processed more than $5.1 billion in sales.
With this in mind, it’s very likely that certain retailers are selling their products on several different eCommerce spaces throughout the internet. In other words, identical products are offered by different sellers on the same platform.
Through digital product matching, a seller can search for a product and see the same product being sold by the different sellers. From there, they can compare the price, quality, and other attributes, then make an informed decision to buy.
It’s like wanting to buy a new phone and walking into several different stores to see who has the best offer. The only difference is that you can do this online quickly and easily through matching products.
How Product Matching Benefits Both Sellers and Buyers
Product matching solutions are important for both the sellers and buyers in a transaction.
For the buyers, it creates an opportunity to compare several different options and choose the offer that works best for them. It’s more sophisticated than just choosing the lowest price, too. Let’s look at an example.
Let’s say a shopper is in the market for a new Bluetooth speaker. Two sellers are offering the same speaker for $50. However, another seller is offering the matching product for $55, but also offers a free one-month subscription to Spotify (a music streaming service).
Depending on if he or she is in the market for a streaming service as well, the second, more expensive option might be more attractive to our buyer than the first two options. If the first two are more attractive, the buyer can go deeper and take a look at the company, shipping costs, quality, etc.
Product matching is also helpful for sellers, too. It can be used to develop a pricing policy and keep them competitive with other businesses over time. They can easily learn about their competitors and figure out new strategies on how to stand out from the crowd (like offering a free month of Spotify).
It’s also important when they start building their offer, as well. They need to figure out how to name the product, what images to use, and what kind of copy they should write to describe the product.
For these reasons, product matching is incredibly useful for both parties involved.
Other Useful Benefits of Product Matching
Other than helping customers find the right products and sellers to compare their wares, product matching has other benefits as well.
Let’s take a look at a few.
Relevant Product Recommendations
Businesses can take advantage of product matching by simply suggesting related products to customers that are shopping online.
For example, let’s say that a customer is shopping for a new guitar online. He finally finds the perfect guitar and adds it to his shopping cart.
Through product matching, the system automatically recommends an amplifier and a cable to go along with it. The recommendation is just what he was looking for, so he purchases both products.
This can make product matching a powerful cross-selling tool.
Improve Product Listings
Through deep learning and name-matching machine learning, you can improve how your products are listed on your website.
The system’s analytics can help you learn more about your customers’ behavior, which will help you understand how to better rank products on your website.
For example, you can take a similarly matched store to your own and analyze their listings. The algorithms will give you insights into how your products are titled and described. This can help you find gaps and shortcomings in your product pages. For instance, you may find a certain page is missing vital keywords that could help you rank higher in SEO.
Detect Copyright Infringement
Most businesses spend tons of money and resources building their brand identity and designing a unique strategy. This applies to their visual content, the copy on their product pages, and the designs used on the website.
This is why it’s important to keep a close eye on copyright infringement. Through product matching, you can detect cases when other businesses are illegally stealing your designs.
Establish Competitive Prices
As mentioned above, product matching is an invaluable tool when it comes to forming product pricing. Through deep learning, you can automate pricing analysis not only when you first set prices, but over time as trends change.
Machine learning can lead to an increased profit that can’t be achieved through manual solutions effectively.
Get Real-Time Data Through Product Matching
Product matching is an invaluable tool that can help both retailers and their customers have top-notch experiences when they shop online.
Sellers can save time and get a positive ROI by utilizing deep learning to optimize their stores.
If you’re ready to start growing your store with the most accurate cross-channel eCommerce data in real-time, book a demo with us today!
Algopix has had the privilege of working with some of today’s leading marketplaces including Facebook Marketplace, Google Shopping, Mercari, Walmart, and others. Through our partnerships we have learned what works and what doesn’t, and our goal is to support our partners in tackling their most pressing challenges. So to that end we all know that eCommerce isn’t static. It is why many marketplaces can’t answer seemingly simple questions like:
- Is my catalog data accurate?
- Am I presenting the most relevant items at the right prices?
- Do I have the right mix of products to please shoppers?
- And lastly, how can I target the right sellers for my marketplace so I can keep shoppers coming back time and time again?
On December 8, 2021, during a live webinar, we dove into the most popular ways our team works with these marketplaces, starting with the importance of catalog integrity as the foundation of any marketplace business. Read the transcript below and watch the accompanying video.
Trust Your Catalog Data
First, catalog integrity is being able to trust your backend or canonical catalog data to support two fundamental processes for your business. The first is to improve seller onboarding by automating the listing process. This will release the reliance of your sellers to input accurate and robust information creating a frictionless onboarding process: What I like to call, the gold standard.
Then the second pillar I’ll touch on is the importance of having the backend data to consolidate duplicate listings of the same product for a better shopper experience.
So let’s start from the beginning with the first pillar around disparate data and insufficient product content input by thousands of sellers, which leads to incomplete, miscategorized and duplicate product data entries. Let me ask you, what is more attractive to a power seller?
- A time consuming and manual process that can fall to easy inputs or
- An easy automated and seamless product onboarding experience with recommended inputs that takes the responsibility out of the seller’s hands?
Well, I’ll answer it for you. It’s the latter. Our team has heard from one of the top marketplaces in the world that on average over 25% of sellers’ submissions are declined due to insufficient inputs because they require too much from sellers. This will create inconsistencies from the start.
Help Your Merchants Want to Work with You
The first step of the onboarding process input should be automated; where a seller starts typing in the name of a product in which your marketplace immediately starts suggesting products. This enables the merchant to auto-populate the product information.
Now, why is this important? As a marketplace it is your responsibility to make this process as easy as possible, to make your merchants want to work with you. This right here is a huge value making sellers want to list on your marketplace. Most marketplaces that we speak to are requiring a ton of attributes aspart of their product submissions and many sellers don’t have this information. This leads them to abandon the process resulting in poor product listings.
So, let’s make it easy for them. How will this impact your marketplace shoppers? We look at your business having two very important clients: your shoppers and your sellers. So we just talked about the sellers’ portion. Now we’re going to dive into how this is going to impact your shoppers. The answer is trust, and trust is one of the most important components for drawing shoppers to your marketplace.
Be the Gold Standard, Pivot to Winning the Basket
Marketplaces that aren’t thinking about enhancing backend data with the most accurate and robust product details will lag behind. And it starts with the aforementioned first pillar – having really strong recommendations for your sellers. This, in turn, will impact your shopper’s experience. If you see your product listing with disparate details on the product, the click-out rate of the external research will limit the chances of your marketplace winning the sale versus your competitors.
The ‘gold standard’ is being the product expert for your shoppers. An example of another large challenge is duplicate listings of the same products. Here, you will see three of the same products with different photos, titles, prices scattered throughout the DSLR camera category page on Facebook marketplace. This could be totally confusing and on off putting to some shoppers:
As illustrated above, it’s hard to see what is actually accurate, what’s fraudulent, if it’s the same product that is actually being searched, etc. So, if you have a robust catalog like Facebook marketplace does here, consolidating duplicate items into one listing can improve the shoppers experience.
However, below shows the after view that we have been able to help our marketplace clients achieve:
Here you will see an example of a product listing with all the sellers that are selling this particular item. All the shopper needs to do is choose which offer makes the most sense to them based on price and other things like shipping, or what type of conditions it is in. So, as shown here, you’ve just limited a three-plus click process down to one or two by consolidating those listings into one.
In closing, understanding the importance of the two main building blocks of your marketplace’s catalog will impact your seller and shopper experience. Next, be sure to dive into the importance of promoting the most relevant products with the most informed, competitive pricing – and learn the characteristics of A+ sellers that are right for your marketplace.
There is no question catalog integrity is truly the foundation of a successful marketplace, but you know what else is? Having high demand products of prices that will sell. Many marketplaces tell us time and time again that they struggle with the ability to stay apprised of pricing changes, which we know fluctuates by the minute.
At the same time, shoppers want the reassurance that they’re getting the hottest items at the most competitive prices. To that end how does a marketplace stay ahead of new products or know what products are in highest demand outside of their own respective marketplace?
On December 8, 2021, during a live webinar, we dove into this and more, starting with the importance of catalog integrity as the foundation of any marketplace business, followed by how to present the most relevant items, at the most competitive prices. Read the transcript below and watch the accompanying video.
Getting Product Demand Analysis and Ranking Right
We can all determine why customers gravitate towards the Amazon marketplace. If I ask anyone if they ever had to go to the second page search results on Amazon, their answer would likely be no. Well, why is that? We know that Amazon has perfected product demand analysis and product ranking and always shows that best selling products at the most competitive prices. So despite this simple logic, this continues to be a pain point for many marketplaces in which low demand products are monopolizing the most important digital real estate, which is the first page search results.
According to BigCommerce, over 70% of sales are coming from page one. Having low-demand items displayed first will undoubtedly lead to a very poor user experience and leave your customers wanting more. Again, the obvious lack of competitive pricing will deter your buyers.
In fact, according to Active8 more than 50% of online shoppers will now regularly compare sellers to find the best prices. So the bottom line is pricing is not static and it’s a marketplace’s responsibility to stay apprised of competitors’ pricing, sales campaigns and promotions.
This can change by the minute. So to that end I’m just going to pose a few questions:
- How does a marketplace ensure they’re offering competitive pricing?
- What guidance, if any, are you providing to your sellers to help them price their items competitively and to win that basket?
- And if a marketplace knows that they have the best offer, how do they inform their shopper that they are in fact receiving the best offer?
- What can you do as a marketplace to increase conversions?
First, fill gaps into the competitors’ pricing. Having sufficient market research will allow you to understand competitor pricing across marketplaces to help you win the basket. Now providing pricing guidance to your sellers is an amazing opportunity for marketplaces to drive value to their seller community, as well as presenting high demand and relevant items first. Most marketplaces are relying on transaction history to dictate product rankings on their marketplace.
This works well for big organizations like Amazon. They have massive amounts of transactional data. However, this can be incredibly challenging for less mature marketplaces. Moreover, this doesn’t account for the demand of products on competitor sites. Another point to consider is that a merchant could be trying to list hundreds, if not thousands of items, and not just on your marketplace. So like I articulated earlier, they need your guidance.
Driving Value to Sellers with Market Intelligence
If you have the right data to back pricing recommendations to your seller community, it can be a tremendous way to drive value to your existing sellers and result in recruiting power sellers to your marketplace. So help your customers realize they’re getting a good deal. According to BigCommerce nine out of 10 U.S. customers price check a product on Amazon.
In closing, if you have the sales intelligence and the confidence that your marketplace has the best price, you can communicate this with your user and show it through a best offer badge. Next, be sure to dive into the importance of catalog integrity, promoting the most relevant products with the most informed, competitive pricing – and learn the characteristics of A+ sellers that are right for your marketplace.
Imagine visiting your favorite eCommerce marketplace, where you search for an item you’d like to research or purchase, and land on a particular category page where all you see is the same item listed multiple ways with incomplete information. Immediately, you want to run or leave the website because you think your credit card is about to be compromised on a fraudulent online store.
Online assortment is incredibly important for marketplaces, but how are they dealing with presenting the most relevant items, especially without compromising their product listing data?
On December 8, 2021, during a live webinar, we dove into the most popular ways our team works with major marketplaces, starting with the importance of catalog integrity as the foundation of any marketplace business, leading into insights around demand and product analysis, and diving into finding the right assortment. Read the transcript below and watch the accompanying video.
Finding the Assortment Opportunity in the Data
According to Salesforce, over 75% of consumers actually expect to see new items on a marketplace monthly. So this data point shows how important assortment really is in the lens of shoppers. But the question is how are marketplaces ultimately doing this? And not just find the right assortment, but also take advantage of a major opportunity around cross-selling?
Well, you need to have data on your current customers, understand what are the items they’re typically buying, and data to understand what are ancillary items that they might want to buy (in order to group with that initial purchase). So if someone is buying a swimming pool, I would suggest swimming pool toys for the kids, and any other items that might accompany that purchase. Amazon actually makes about 35% of its revenue directly from cross-selling. So this is a huge opportunity for marketplaces.
They really need the data to make these suggestions interesting and relevant for their customers. But what are some challenges around assortment optimization? Here’s what I’ve learned in working with diverse marketplaces over the years:
- Assortment lives within multiple functions of marketplace organizations. So, it’s not centralized.
- There are multiple teams with this role and responsibility.
- Marketplaces don’t have the right data and tools to help effectively and efficiently.
What’s more, marketplaces are doing this in a very, very manual way: by looking at competitive marketplaces, other websites where they have interesting items, trying to find and figure out what items they’re missing, trying to find and figure out which sellers can ultimately source those items to their marketplaces. So, it’s an incredibly fragmented and also an incredibly manual process today. So what do marketplaces ultimately need to make this a successful endeavor?
There are two things: No.1, centralize and make this a function of one role, so a key stakeholder can manage the process. No. 2, good data and analytics to help make these decisions quickly and efficiently.
Demand and Product Analysis Use Cases
So, let’s take an example of what this actually looks like in real life. Kroger has a printer category on its marketplace. However, the only item it had on its marketplace in the printer category was a single item of printer paper. But, if I was in the market to buy a new printer I would be leaving this site to convert elsewhere if they only have paper.
That said, if you’re going to be a marketplace that is selling in the printers category, you should also have printers and printer ink, in addition to the paper, which is certainly important. But what about including different sizes of paper for example?
But by leveraging the right data, we were able to see that while Kroger has this one item, this item across other marketplaces sells about $10,000 in volume. The sales from this one item are great, but what we also can tell is that there’s another 4,200 or so items that exist within this printer category. And if Kroger were to upload those missing items, they can potentially gain about $150 million per month in this category.
While we’re not suggesting a marketplace bring on every single item in a category, it is crucial to understand what are the best-selling items within a category and quickly be able to upload those items to your marketplace in an effective manner.
In a second example, we can see that the Kroger marketplace also has a toys category. However, when digging into that toys category, we noticed that they were actually missing the five best-selling items within the toys category.
What you can see pictured here is just these five items, over the course of one month are about $106,000 monthly with the highest volume being $260,000 in volume. If Kroger were to upload just these five items (and gain the right Seller Intelligence) in this single category, it could potentially mean up to $1 million dollars in sales monthly. This is why using data to make decisions around assortment is incredibly important.
Understand the Top-Selling Brands with the Right Data
Another opportunity for marketplaces is to think through their categories similar to category advisors throughout retailers. So not only what are the best SKUs and items that are selling, or the best brands, but I also want to understand what are the attributes that are most popular within a category.
In another example, we looked at shampoo and conditioners, finding that color treated (or dyed) hair, and damaged hair resulted for a large percentage of this category. For this, a marketplace should focus on adding items with attributes showing ingredients of shampoo and conditioners that are very popular, like Argan Oil, Organic or Paraben Free.
In one last example, we noticed that within five categories, one marketplace had about 7,000 items listed on its site. However, we could see about 35,000 items in our data, which could have resulted in about $28 million per month in increased sales.
In closing, the idea here is not to upload every single item to a marketplace that exists, the idea here is to understand what are the top-selling brands and items across channels that your marketplace might currently be missing and quickly be able to identify who can sell and source those items, for GMV growth.
Once your catalog is built, be sure to promote the most relevant products with the most informed, competitive pricing – and learn what might be missing from your mix of products that can accelerate growth. Once this is in place, it’s time to figure out the characteristics of A+ sellers that are right for your marketplace.
On December 8, 2021, during a live webinar, we dove into the most popular ways our team works with major marketplaces, starting with the importance of catalog integrity as the foundation of any marketplace business, leading into insights around demand and product analysis, and diving into finding the right product assortment. (Read the transcript below and watch the accompanying video.)
The next key to rounding out marketplace success is making sure that you’ve got the most productive, A+ sellers working with you on listing the right products. So let’s focus on some considerations to think about when you’re recruiting power sellers to your marketplace.
Some of this may seem obvious, but I think it’s worth talking about because having quality sellers is critical to your success. And when we’re considering sellers, I kind of broke it down into four key elements that you want to think about.
Four Characteristics of A+ Sellers: What to Look For
First off, look at seller ratings. Amazon has given us a track record for sellers. There’s a couple of metrics that they provide that do a pretty good job in scoring the sellers. One is the seller rating and the second is actually the buyer’s feedback.
And so I’m going to elaborate on each one of those. First of all, seller ratings: What the heck is it? You might have seen that everybody seems to have a rating of 99 or above. Well, that’s because it’s not based on a 100-point scale. What actually is occurring is that fractions of a 10th of a percent matter in that seller rating.
So if you look at that seller ratings, you’re going to want to try to isolate and find sellers that have a rating of 99.8 or greater, and contrasting with that, you could eliminate sellers with a 99.5 rating. They can be considered horrible. And it may really seem like splitting hairs here, but the reason is that, again, you want to look at that decimal point in comparing those sellers because it’s that fraction of a 10th of a percent that matters.
The way that Amazon is calculating this is that the feedback ratings are based off of the stars left in reviews. And so they kind of look at all five or four stars and consider those positive feedback and everything below four is considered neutral or negative feedback. And the calculation is basically they’re dividing the sum of the positive ratings by the sum of all the remaining ratings. And again, that’s why we’re talking about how small differences in percentages make a big difference.
So in summary, you’re going to want to look for a 99.8 or greater seller rating. However, you also want to kind of dive into the buyer feedback and look at the negative ratings or the negative feedback that was recorded. Amazon has previously advised that best sellers average 0% negative feedback. Does anybody ever get 0% negative feedback? Not realistically.
So what the industry is kind of pinned on and identified, is that anything between zero and 2% negative feedback is considered great, anything greater than 5% could be a cause for concern and you might want to look at some other metrics around those sellers. So combining those two, 99.8 rating or better with less than 5% negative ratings is what you’re looking for. The second piece to consider is a seller’s portfolio size. The A+ sellers tend to have larger portfolios.
In fact, over 70% of million-dollar sellers have over 20 items in their catalog. You’re not going to want a seller with one or two items. They’re typically testing out whether or not they even want to get into eCommerce. You want to try to find sellers who are making this their business and are actively pursuing it.
One-third of million-dollar sellers, in fact, have over 250 items and they’re changing their mix regularly to make sure that they are relevant and have the right assortment to be able to meet market demand. So while you’re evaluating a seller, make sure they’re committed and active in their business indicated by a large number of items and a changing mix over time. These are the sellers that are also actively managing their portfolios and continuing to bring new products and new excitement to your marketplace.
Third, you’re going to want sellers who have fulfillment flexibility. This means trying to find sellers that are not FBA. These sellers have proven that they can deal with complexities of inventory management on their own and have the flexibility to pivot and deliver to their customers while having to deal with Amazon’s ever changing requirements.
So you don’t want to have them locked in and needing to send all of their inventory to Amazon to meet their requirements. Lastly, there are a couple of sales metrics and KPIs that you’re going to also want to consider. You’re going to want to find established sellers who have been in business for more than six months.
That’s because if they’ve made it to that six month mark, they’ve learned what works and what doesn’t work. They actively work their portfolios with social media, SEO, price monitoring, etc., in order to be a successful marketplace. And last, you should look for sellers with positive sales trends and a significant share of the Buy Box.
Finding Quality Sellers are Critical to Success
For example, we recently worked with a marketplace that was interested in adding paintball supplies to its portfolio. We did a seller analysis and what we found is that a large percentage of the market was supplied and serviced mainly by two sellers (over 50% of that marketplace). So if I’m trying to find the right seller, I’m going to look at those two first. But let’s dig down and take a closer look at those two sellers and kind of compare and see which one is going to be the best fit for the marketplace.
The first seller has a market share of 25% (the highest market share). It is selling over $330,000 in GMV, but it is actually trending down. They’re an FBA seller and they’ve been in business for about eight months. The second seller has a slightly lower category share and a lower GMV, but it is not an FBA seller and has been in business for over 18 months.
When you look at their different ratings, the second seller has much stronger positive ratings both recently and over the lifetime that it has been in business.
So when comparing two sellers and trying to recruit them to my marketplace, looking at the metrics, the sales, and the ratings makes it pretty clear that I would want to try to recruit the second seller rather than the first seller.
To summarize, there are four key elements to consider when comparing sellers on the marketplace: seller rating, portfolio size, fulfillment flexibility, and key KPIs like sales metrics. After you’ve established catalog integrity, promoted the most relevant products with the most informed, competitive pricing – and learned what might be missing from your mix of products that can accelerate growth, finding the right sellers are crucial to success.
Keeping a pulse on eCommerce intelligence in real time involves many moving parts. From scouring various datasets to online trending insights, we look to create the most comprehensive and accurate product catalogs; the foundation for any online brand, CPG, marketplace or aggregator looking to accelerate growth across digital channels.
While we continue to track and analyze product data from over a billion items, from millions of brands, across multiple marketplace channels (and geographies) in addition to the digital point-of-sale data leveraged – in our own market research, we also keep an eye on some key eCommerce influencers that help guide us on where to look next.
These 10 eCommerce Influencers are presented here:
No. 1: Juozas “Joe” Kaziukenas, Founder of Marketplace Pulse
If you’re looking for data and research on marketplaces, the lead of this eCommerce intelligence firm is a good place to start. With data collected from Amazon, eBay, Etsy, Walmart, Wish and others, its proprietary software takes raw data from web scraping and APIs to extract particular insights on brands, product categories and sellers. Kaziukenas’ most recent piece is an annual “Marketplaces Year in Review 2021,” giving an in-depth snapshot on what’s going on in this industry based on data observations in the most objective way possible.
No. 2: John Dick, Founder and CEO of CivicScience
Built his survey and data company to ‘study emerging trends among early adopters, market mavens, and influencers.’ A frequent speaker at the Carnegie Mellon University Don Jones Center of Entrepreneurship, regular contributor to AdAge, the HuffingtonPost, and Forbes and with appearances on Good Morning America, Cheddar, Yahoo Business, etc., his latest insights most recently take the temperature of consumers during a pandemic including what this means online.
No. 3: Deborah Weinswig, CEO & Founder at Coresight Research
And one of LinkedIn’s Top Voices for retail, is focused on covering all things retail technology, trends, live streaming, commerce and more. Her latest LinkedIn share speaks to rising inflation presenting a significant challenge and insights on how retailers should not simply ‘pass along rising costs to their shoppers.’ Instead, seek other opportunities to offset those inflationary pressures by looking for tech that streamlines and optimizes eCommerce processes.
No. 4: Sri Rajagopalan is not only the Chief Omnichannel Customer Officer for General Mills
But he has made his way up the eCommerce ranks in a career that spans the likes of well-known brands including PepsiCo, J&J and Revlon. He has also added advisor to startups to his current role, but is most relevant to this list for his Co-Hosting of The CPG Guys podcast. Rajagopalan adds his eCommerce expertise to podcast Co-Host and consumer loyalty guru Peter V.S. Bond to ‘explore how brands and retailers engage with consumers in-store, online and everywhere in between.’
No. 5: Colin Lewis, CMO, of OpenJaw Technologies and author of Econsultancy’s Third-Party Marketplaces Best Practice Guide
regularly researches and writes about eCommerce trends and most recently how marketplaces are everywhere. He reports that over 50% of the gross market value for the top six eCommerce players in the world is on marketplaces. What’s more, entrepreneurship and cross-border shopping, the gig economy, and so on … have all contributed to this trend. Most importantly though, Lewis covers how to take advantage of this opportunity and win on marketplaces.
No. 6: Kaleigh Moore is a regular contributor to Forbes
With an expertise in retail, eCommerce and direct-to-consumer (DTC). She’s particularly focused on trends within the fashion, beauty and luxury verticals. Her latest works include how DTC brands are diversifying their product lines creating more eCommerce competition – something online retailers need to track. She also reports recently that digital, third-party marketplaces are seeing an 81% increase in gross merchandise value year-over-year so far in 2021, and highlights examples of how online luxury marketplaces are ones to watch.
No. 7: Chris Dawson
Is a former eBay seller turned Co-Founder and Editor of Tamebay. According to his bio, he noticed a lack of general information and help [around eBay selling] and he had aspirations to create a site to “Tame eBay,” bought a URL and promptly did nothing about it. Fast-forward to today and Dawson works on the site full time, writing and attending numerous eCommerce events throughout the year, also undertaking consulting gigs for companies wishing to fast-track their eBay sales.
No. 8: Steve Dennis
Is a keynote speaker and the bestselling author of “Remarkable Retail,” keeping tabs on the latest retail, eCommerce and digital disruptions happening in the industry right now, closing out his latest podcast with another well-known industry influencer, Professor Scott Galloway. Dennis is focused on retail growth and innovation, stemming from his 30-year career as a senior executive at two Fortune 500 retailers – and more recently as a strategic advisor. He has most recently penned content around the potential Saks.com spin-off, provocative retail predictions, and the hybridization of retail – and he doesn’t hold back on offering up his opinions.
No. 9: Tom Davenport
Is Visiting Professor at Saïd Business School, University of Oxford, and your go-to for all things data science. He keeps a close eye on artificial intelligence, machine learning and the democratization of data within organizations. He has co-written and written around 20 books and hundreds of articles, most recently quoted as saying the AI/ML trend is part ‘motivation in addition to technology.’ Whether you’re getting started in your data/analytics journey, or need a refresher, Davenport is a helpful ‘follow’ away.
No. 10: Sucharita Kodali
Is the Retail Industry Analyst for Forrester, talking all things retail and digital transformation. While her research is typically about broader retail industry trends, she recently held a session at a live event, which looked at a 140-brand study, released in partnership with Vorys eControl that focused on online marketplaces, the challenges that arise in digital sales and solutions for increased online control.
Putting the Influence in [eCommerce] Influencers
The aforementioned compilation is a list of top eCommerce influencers to follow, who continue to create the content that not only covers the industry trends we’re hearing and seeing, but also have an influence on the more robust eCommerce product catalog information we’re trying to build and improve upon consistently. We hope you find it useful.
Who would you add to this list? Let me know at email@example.com, and you could see those individuals highlighted in the next iteration since, sharing is caring, after all.
Keeping a pulse on eCommerce trends and opportunities is not an easy task as it constantly evolves with new and consistently emerging consumer demands – which has been fast-tracked today by a global pandemic.
The emergence of different types of online marketplaces has certainly helped to ease the influx of the online shopping shift. With many consumers being forced to buy their groceries and essentials online, this is one of many marketplace trends that will stick around for a while.
In fact, according to a recent Alvarez & Marsal Consumer and Retail Group survey, 85% of consumers indicated they will maintain their shopping habits post-pandemic, which bodes well for online marketplace growth.
As the new year is just around the corner, many eCommerce brands and sellers are likely considering where to place their bets on strategies that will boost their marketplace growth. While creating a foundation of accurate catalog data is table stakes, knowing where to focus next is key to winning with shoppers.
The following compilation is a shortlist of opportunities to watch, pulling from trending headlines, combined with insights from key online marketplace data:
1. Consider the Petcare Category
One of the benefits to being locked down in quarantine is families were spending more time working and learning from home, therefore giving them more time to care for pets. This brought on a surge of pet purchases and adoptions (in the UK alone, 3.2 million pets were bought during the pandemic).
According to Pet Gazette, online marketplaces are the biggest opportunity of growth for petcare brands, as the sector has been shifting to digital, and it is predicted that a third of global petcare sales will be eCommerce transactions by 2026.
As such, beginning with an Amazon or Walmart as a launchpad is recommended as a starting point, since the petcare landscape is oversaturated with well-known brands. That said, the data shows that shoppers are mainly researching their items by product and not household brands, making it a level playing field for the category. So, as this category continues to grow, marketplaces should take note.
2. Invest in Cross-Border eCommerce
Data from eShopWorld shows that one-quarter of shoppers surveyed across 11 countries purchased apparel from websites outside of their home market in 2020 (rising even higher among Gen Z and Millennials).
This trend goes to show the importance of investing in and offering cross-border eCommerce capabilities, especially for the clothing, footwear and children’s apparel retailers/categories online. The international momentum is still high making the total for cross-border eCommerce up 74% year-over-year for the first four months of 2021.
As such, having the right global and cross-platform strategy is key for capitalizing on this growth-area. Ensure to invest in the right data to help fuel this cross-platform/cross-border strategy to take advantage of this new international shopper.
3. Prepare for Longer Holiday Seasons
Data from many online marketplaces showed that consumers started their holiday shopping much earlier than ever before and simultaneously increased their use of online marketplaces. The ongoing supply chain disruptions have prompted consumers to start their research and purchasing earlier so as not to be let down by inventory issues or shipping delays.
The once Black Friday/Cyber Monday sale anticipation has now stretched to a longer holiday season, and the average consumer still plans to conduct most of his or her shopping online, even with the reopening of brick-and-mortar retail stores.
“As a result of supply chain disruptions and unpredictable product availability, global consumers are starting their holiday shopping earlier than ever before and using online shopping to avoid disappointment,” according to Adrien Nussenbaum, co-founder and co-CEO of Mirakl. “The data from our Holiday Shopping Snapshot offers proof that many of the temporary behavioral changes originally brought on by the global pandemic are becoming permanent. In particular, shoppers are increasing their use of online marketplaces to help reduce costs and ensure gifts arrive on time, with marketplaces seeing the greatest gains among frequent shoppers.”
Knowing what high-demand products to promote, and at the most competitive prices, will be imperative to keeping up with the longer shopping season at least until the supply chain regulates itself again (remember: it’s a marathon, not a sprint).
4. Look to Luxury
While many shoppers flock to online marketplaces for good bargains, the luxury sector has also seen a surge brought on by COVID-19, shutting down travel for destination shopping experiences. But translating that journey into a virtual experience has helped with an uptick in growth.
According to Forbes, Farfetch serves more than 190 countries and territories with an average order in the first quarter of 2021 totaling $618, with a digital platform GMV growth up 60% year-over-year. Other luxury brands on the marketplace bandwagon include Net-A-Porter and Matches Fashion, using more strategic ways to profit from omnichannel retail.
What’s more, Bain & Company projects that as much as one-third of all personal luxury purchases will take place digitally by 2025, with revenues reaching an estimated $136 billion. In order to take advantage of this growth opportunity, fostering product discovery to drive sales is key in luxury.
5. Keep Up with Emerging Competition
Many large and well-known brands having been struggling to keep their doors open resulting in talks of splitting up: separating the brick-and-mortar footprint from the eCommerce business. Most recently, Macy’s has been on the fence about it, attracting a lot of attention, however Fortune reports that “An online only Macy’s would need to work incredibly hard to differentiate itself against Amazon and many other players.”
Macy’s is not the only one to watch: Kohl’s and Saks have been reporting a similar story, and most recently Giant Food has launched an eCommerce marketplace featuring non-grocery products. Whether some of these splits will be cause for concern for marketplace competition, only time will tell if they can compete with the likes of Amazon, Walmart, or eBay, etc.
How can online marketplaces get ahead of the competitive landscape? The answer is in the data. By having real-time insights at their fingertips, marketplace leaders can build a catalog that can be trusted, with the right power sellers to overcome any competition. It’s a win-win-win for marketplaces, sellers, and shoppers alike.
Use key product data to know where to expand next, whether it be in petcare or luxury items. Look to high-demand products at the most competitive pricing and know when to offer the right promotions to remain top-of-mind. While the marketplace industry may seem oversaturated at times, building the right backend product data catalog is essential to keep up. Then, invest in a cross-border, cross-platform strategy – agility is critical to survival in a constantly changing eCommerce landscape.
Scaling an online marketplace for success can feel like a major undertaking, but with the right canonical catalog as a foundation, and an eye on the right real-time data, seizing the next big opportunity can help marketplaces continue to thrive without signs of slowing down.