state of b2b online retail marketplace 2015€¦ · the leading platforms were magento with 15%...

Research Report - July 2015

STATE OF B2BONLINE RETAILMARKETPLACE2015

WHO WE SPOKE TO

© REGALIX RESEARCH STATE OF B2B ONLINE RETAIL MARKETPLACE 2015 / 01

With online retail seeing significant growth in recent years, marketplaces offer an

opportunity to smaller retailers for addressing a larger audience.

To understand the challenges faced by them in dealing with marketplaces, we spoke to

retailers in the US, and some in India.

71 percent of the retailers we surveyed had an annual revenue below $500K.

25 percent of them had less than 50 products or SKUs; another 32% had between 50 & 500.

81 percent of the retailers had 60% & more of their products listed on marketplaces.

And 50% of them had 50% & more of their overall revenue generated from

marketplaces & comparison shopping engines.

88% retailers pick high cost as the reason for their not

listing on marketplaces » tweet this «

65% retailers choose inventory control as the most useful

feature offered by a marketplace» tweet this «


77% respondents say they expect their aggregator to

provide phone support immediately» tweet this «

93% retailers have their own websites » tweet this «

68% respondents say they would like to see their

aggregator offer a reduced monthly fee» tweet this «

KEY FINDINGS:

What is the annual revenue of your company?

0%$10M to $50M

71%Below $500K

9%$500K to $1M

9%$1M to $5M

7%$5M to $10M

5%Above $50M

How many products or SKUs do you have?

25%Below 50

32%50 - 500

11%500 - 1000

1000 - 5000 9%

23%Above 5000


What percent of your products are listed on marketplaces?

10%Below 20%

10%20% - 40%

0%40% - 60%

80%Above 60%

What percentage of your overall revenue is generated from marketplaces and comparison shopping engines?

18%Below 10%

18%10% - 25%

50%Above 50%

14%25% - 50%



Only 7% of the retailers we spoke to did not have their own website.

Among the rest who had, we encountered a wide range of platforms on which these

websites have been built on.

The leading platforms were Magento with 15% share, and Shopify with 13% share.

Do you have your own website?

93%Yes

No

7%

93 PERCENT OF RETAILERS HAVE THEIR OWN WEBSITE; BUT THE PLATFORM THEY

CHOOSE TO BUILD IT ON IS VARIED


If yes, which platform is it built on?

5%Bigcommerce

15%Magento

5%Opencart

13%Shopify

5%Shipstation

10%Webstore

10%E-commerce by Yahoo

3%3dcart

3%Volusion

10%Amazon website

3%Americommerce

3%Stone edge


AMAZON IS BY FAR THE MOST POPULAR MARKETPLACE

As high as 90% of the respondents we spoke to, said they were listed on Amazon.

Ebay was the next popular marketplace with 55% response. Sears came in third at 15%.

Select the marketplaces you are listed on?

90%Amazon

3%shop.com

55%Ebay

3%Wayfair

3%Pricefalls

15%Sears

10%Houzz

8%Rakuten.com


LARGER CUSTOMER BASE & INCREASE IN SALES ARE THE PRIME DRIVERS OF

MULTI-CHANNEL SELLING

Asked what the benefits were of multi-channel online selling, 90% of respondents said

it was access to a larger base of potential customers; while 87% chose increase in sales.

Only 27% saw it as a reduction in overheads.

What, according to you, are the benefits of multi-channel online selling?

90%Access to a larger base of potential customers

87%Increase in sales

67%Increase in brand visibility

27%Reduction in overheads


SAVING COST ON ADVERTISING IS THE BIGGEST BENEFIT FOR LISTING PRODUCTS

ON COMPARISON SHOPPING ENGINES

42 percent of the retailers we spoke to, said saving cost on advertising led them to

listing their products on comparison shopping engines. 37 percent chose the reason

as easy to track ROI.

What are the benefits of listing your products on comparison shopping engines?

42%Saving cost on advertising

37%Easy to track ROI

21%Enables an organization to personalize messages or more effectively choose a

target clientele

16%No dead stock

21%Easy to integrate with traditional marketing strategies

16%Instant delivery of the message

enables organizations to make their marketing campaigns faster


INVENTORY CONTROL IS THE MOST USEFUL FEATURE OFFERED BY AN AGGREGATOR,

SAY RETAILERS

65 percent of respondents found inventory control to be the most useful feature provided

by their marketplace aggregator; while 50% picked on reporting & analytics.

What features provided by your marketplace aggregator do you find most useful?

65%Inventory / stock control

25%Getting the best listing across channels

50%Reporting & analytics

40%Sale order processing

35%Multichannel management

30%Back office automation

25%Personalising messages for shoppers

REDUCED MONTHLY FEE TOPS THE LIST OF MOST WANTED FEATURES

68 percent of respondents chose reduced monthly fee as the feature that they would

like to see their aggregator offer.

In terms of business enabling tools, 36% of retailers said they would like their

aggregators to offer sales forecasting & CRM.


What are some features that you would like your aggregator to offer ?

68%Reduced monthly fee

50%Reduced transaction cost

50%Availability of more marketplaces

50%Customer service

41%Free account management

36%Sales forecasting

36%CRM feature

27%Adapting to new marketplace features quickly

27%‘Do it for me’ model

18%Streamlining traditional and digital channels into one tool

18%More stable platform

14%More influence on marketplaces


MAJORITY OF RETAILERS ACCESS THE PLATFORM THROUGH A USER INTERFACE

56 percent of respondents said they access the marketplace platform through a user interface.

How do you access the platform?

56%User Interface

22%Application Program Interface

15%Spreadsheet


RETAILERS EXPECT SUPPORT OVER PHONE IMMEDIATELY; PREFER TO HAVE AN

ACCOUNT MANAGER FOR TECHNICAL SUPPORT

Asked what kind of support they expected from their aggregator, 77% of respondents

said they expected phone support immediately. Email response within 8 hours came

in next at 41%.

79 percent of the retailers who said they preferred to have an account manager, said

they would like to have one for technical support; while 53% chose to have one for

support in operations.

Do you prefer to have an account manager? If yes, why?

79%For technical support

53%For operations support

21%For marketing planning

21%For digital strategy

11%For pushing deals to marketplaces

5%For merchandising planning


What is your support expectation from aggregators?

77%Phone support immediately

41%Email response within 8 hours

36%Chat

9%Email response within 16 hours

HIGHER SHIPPING COSTS POSE A CHALLENGE TO RETAILERS IN

MARKETPLACES & SHOPPING ENGINES

72 percent of the retailers we spoke to, chose higher shipping costs as the current

challenge faced by them on marketplaces & shopping engines. This was followed by

promotions management at 56%.


What are the current challenges you face on marketplaces and shopping engines?

33%Website management

72%Higher shipping costs

17%Customer service

33%Feed management

56%Promotions management

11%Cancellations

28%Inventory management

39%Catalog creation and management

28%Logistics

39%Price management

6%Order management

22%Returns

6%Shipper management


NEW COMPETITION IS THE KEY CHALLENGE IN A MULTI-CHANNEL

ONLINE ENVIRONMENT

55 percent of respondents mentioned new competition as the key challenge faced by

them in a multi-channel online environment; followed by higher shipping cost at 50%

and exposure in marketplaces at 45%.

35 percent of retailers picked on integrating with traditional supply chain as a key

challenge faced by them.


What are the key challenges online retailers face in a multi-channel online environment?

55%New competition

30%Staff IT support

50%Higher shipping cost

20%New features in existing marketplaces

45%Exposure in the marketplaces

20%Customer service staffing

35%New marketplaces

15%Lack of competitive pricing information

35%Integrating with traditional supply chain


MAJORITY OF RETAILERS SAY THEY HAVE THEIR OWN WAREHOUSE

FOR STOCKING INVENTORY

73 percent of retailers we spoke to, said they had their own warehouse for keeping

inventory. 36 percent mentioned Amazon FBA.

Where do you warehouse your inventory?

5%Sears FBS

73%Own warehouse

36%Amazon FBA

27%Personal property

14%3rd Party warehouse


MOST RETAILERS UNWILLING TO PAY MORE FOR BETTER CUTOMER SUPPORT

When asked whether they would pay more for better customer support from their

aggregators, 63% of respondents had no hesitation in saying no.

Are you willing to pay more for better customer support?

62%NoYes

38%


RETAILERS PREFER MONTHLY FLAT FEE OVER REVENUE SHARING MODEL

46 percent of respondents said they prefer a monthly flat fee as against 17% who chose a

revenue sharing model.

Among the following, which payment option would work more profitably for your company?

46% 17% 37%

Monthly flat fee

Revenue sharing model Both


HIGH COST SEEMS TO BE THE MOST PREVAILING REASON INHIBITING RETAILERS

FROM LISTING ON MARKETPLACES

88 percent of retailers picked high cost as the reason for their not listing on marketplaces.

Please state a reason if you are not listed on marketplaces.

0%Lack of senior executive buy-in

25%Intense competition

83%High cost

13%Lack of marketplace know-how

38%Lack of trust-online payments

13%Lack of knowledge about 3rd-party sellers

0%Plagiarism

38%Lack of trust - brand value depletion

25%Lack of trust-protection of sensitive information

25%Commercial messages being filtered by spam filters

13%Other


Marketplaces have become an attractive option for smaller retailers to increase their

customer base.

From our conversations with retailers, it would appear that the cost of participating in a

marketplace was posing a challenge to them. Marketplaces also bring in new competition

and retailers will have to develop their own strategies to deal with it.

Aggregators, on their part, can further their cause by providing retailers with, and

educating them on the use of analytics and other business enabling tools. This would

help the retailers navigate their business better on the platform and see value against the

cost of participating on it.

FINAL THOUGHTS

Pinaki DattaVP, Retail & Manufacturing

Pinaki Datta is pioneer in the business of retail and

ecommerce. He comes with extensive experience in

Management Consulting with thorough understanding of

the current technologies and best practices especially in

the web, mobile, and CRM technologies. He has successfully

built and led several product management, operations and

PMO organizations from ground up with his capability to

translate business vision into tactics and processes.

Sridharan NarayanHead Creative Services

Having spent over two decades in advertising and

brand management, Sridharan’s passion continues to be

content in all its forms. He is deeply concerned about the

consumption of content assets across various consumer

touch-points, with media being, in more cases than not,

the message. Through research, he intends to positively

influence a client’s business outcome, by being relevant to

the consumer across the entire sales life-cycle.

ABOUT THE ANALYSTS

ABOUT REGALIX RESEARCH

For more informationTo find out how Regalix can help you, please contact our office, or visit us at www.regalix.com

Regalix Research

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(US): 1-888-683-4875 (India): +91 80-49445010

Email: [email protected]

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state of b2b online retail marketplace 2015€¦ · the leading platforms were magento with 15%...

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