Online marketplaces have completely reimagined the way we trade, buy and sell retail goods and how we purchase our favorite products. As the retail industry was expected to come to a grinding halt due to the pandemic, online marketplaces swooped in to save the day and help small businesses and individual sellers alike.
Providers, customers, sellers, buyers… whatever you call them, they’re staples of an online marketplace. They come with and sell products directly to those willing to purchase If you think about it, online marketplaces are no different from the bazaars of the ancient world. With one exception — you have website operators or administrators handling the marketplace itself and making a profit off running the site.
Whether you’re looking for an NFT marketplace or a freelance marketplace, the principle remains the same — there’s someone offering a product or a service and another party in dire need of it. But how does marketing work in an online marketplace?
eCommerce and marketplaces, what is the difference?
First off, it’s crucial to differentiate between the two most common types of marketplaces. Let’s discuss the broader definition first — eCommerce stores.
As more and more gravitate towards online shopping, the meaning of “eCommerce” has somewhat devolved to denote any online store that sells goods to customers. In essence, an eCommerce store is defined as a site devoted to selling goods by a single brand and to the specific target audience it’s trying to reach.
Take Timberland for example. It is, for all intents and purposes, one of the most accurate representations of an eCommerce store. You won’t find any other shoe brand on their site, and the marketing will be focused on the demographics that Timberland sells its shoes to. However, it’s not unheard of for large retailers to add smaller partners to their existing eCommerce sites, thereby becoming marketplaces.
Depop is one great example of a marketplace. On it, you’ll find clothing and jewelry from different sellers, and from there, consumers can begin to sort goods by brand, allowing them to zero in on one particular seller out of thousands. It’s the very meaning of an online marketplace.
Technically speaking, an online marketplace is also an eCommerce site, but with one major difference — it’s trying to attract not only buyers but also sellers.
That’s where marketplace marketing will differ from that of traditional eCommerce marketing — it needs to offer and advertise a better trading environment to sellers than its competitors.
KPIs and metrics for online marketplaces
Online marketplaces share a great deal of KPIs and metrics as other websites do. Simply put, certain signals are always a welcome sight, such as monthly active users (MAU). The more unique users you have, the better.
Other metrics, such as time spent on site, need to be understood in a different light. While you’d otherwise want to see users spending more time on your website, in the world of eCommerce, it usually means they can’t find what they’re looking for. Discerning details such as these can help you understand relevant metrics and set KPIs much more efficiently.
For online marketplaces, another interesting and highly relevant metric is liquidity, i.e., the percentage of listings that become transactions. Since it’s online marketplaces we’re talking about, you can measure liquidity from both the buyers’ and the sellers’ points of view. For buyers, you can look at how many page visits lead to transactions.
Other than that, some of the more useful metrics include
- Customer acquisition cost;
- Gross merchandise volume;
- Repeat purchase ratio;
- Provider-to-customer ratio.
Any one of these can prove to be excellent KPIs for a business that’s trying to succeed in the online marketplace industry.
High-performing marketing tactics and new trends
So, what can you do to stand out from the crowd?
For one, you can enable live streaming for your users and make the website feel more like a social network: with features that include the possibility of following and more. Engage your audience and keep them in the loop even when they aren’t purchasing your products. Turning your marketplace into entertainment and allowing your potential customers to partake in events is an excellent way to connect with your audience and stand out from the crowd.
Live streams aren’t the only method of gaining additional publicity. Influencer marketing, i.e., having influencers include your product in their social media posts, is an incredibly efficient way of spreading awareness about a certain product. It’s usually done by exchanging goods for services, that is, offering them a product for review.
Of course, we cannot talk about marketing tactics without mentioning paid advertising. Companies that have prioritized ad spending have seen substantial returns on ad spending. This is especially true for retargeting native campaigns. Businesses that rely on retargeting are now seeing unparalleled ROAS and will thus have more spending power in the event of another global crisis.
Finally, never forget to show gratitude to your existing customers. Running a successful online marketing store is not just about competing for new customers — it’s about retaining existing customers as well. Email newsletters, loyalty and referral programs can help you express gratitude toward your current customer base and build long-lasting relationships.
Don’t forget about providers
Buyers and sellers are the players of the marketplace, or at least, they used to be. As we’ve previously pointed out, online marketplaces differ from that of traditional eCommerce sites in that there’s a third party involved in the trading process, which would be the site provider — the marketplace operator.
Marketplace webmasters also have a role to play in the overall success of the site. They’re the ones who need to come up with a unique selling point that differentiates them from all the other marketplaces out there. How easy or difficult it is for a marketplace to succeed depends on the niche and the business model it opts for.
Buyer and seller programs, monetary incentives, commissions and cost margins can all make one marketplace seem more or less appealing than another. It’s crucial you research and formulate a unique and lucrative business model if you want to be a successful marketplace provider.
Whether you’re looking to operate a marketplace or make do on one of the existing ones as a seller, knowing a couple of handy marketing tricks will go a long way. Looking at 2022 as a whole, the only major difference to that of the previous year is going to be the prevalence of influencer collaborations, native ads and retargeting campaigns. While having influencers advertise your products certainly is nice, it will be good ad spend that makes the most impact on your future success.