What is an online marketplace?
In the fashion and lifestyle industry, an online marketplace is a platform where end consumers can buy garments and products from a range of brands. It acts as an online wholesale department store, offering a centralised site for customers to choose their items and order them for home delivery. But what are the key benefits and how can you get your brand onto a marketplace and in front of thousands of keen customers? Read on to unpack the details and discover the power of marketplaces to drive sales and grow your brand’s recognition across borders and in new territories.
What makes marketplaces so attractive?
E-commerce shopping is growing as a proportion of all fashion and lifestyle purchases, and this has seen a significant rise in the popularity of online marketplaces. For small or emerging brands that have enjoyed success in their home market, growing their appeal in a new region often requires significant investment in targeted marketing campaigns or pop-up stores. However, by making items available on popular marketplaces, your brand will receive the exposure it needs to become recognisable to the public and establish a foothold in a new territory.
How do marketplaces break down barriers to entry?
Marketplaces can easily offer brands entry to new markets by reducing the need for large upfront investments in regional advertising. For example, if a European brand wants to begin offering its products to American customers via its own independent website, it’d have to run area-specific promotions to increase the brand’s profile in the US and drive traffic to its site. However, if this brand can make its products available on a renowned marketplace like Saks Fifth Avenue, it can secure significant exposure to a strong, existing customer base.
In addition, marketplaces offer a relatively low-risk method of “testing the water” in a new location. There is no guarantee that a certain product range will be popular in every country or continent just because it has enjoyed success in its home market. Making your items available without needing to ship large quantities of stock in advance or acquire vast amounts of warehouse space lowers the upfront cost of expansion. Therefore, marketplaces can be a great way of gauging the interest in your brand before making any extensive investments in new regions.
Do customers prefer marketplaces?
According to a consumer survey, marketplaces delivered the best customer experience of any sales channel in 2023, being favoured by 51% of respondents. Individual brand sites were second with only 10%, demonstrating that customers seem to show a preference for the choice and price competitiveness of marketplaces.1 So, for emerging brands, these platforms can play an essential role in their growth strategies in new markets.
Are marketplaces the future of online fashion?
Marketplaces are projected to continue growing in popularity, bolstering their roles as mechanisms for international expansion. Sales of items directly from brand websites are expected to drop by three per cent by 2027, while third-party sales through marketplaces will see a growth of three per cent during the same period.2 Given this trajectory, now is the time to explore the benefits and opportunities offered by marketplaces – to develop your brand awareness and boost your growth.
Wondering how marketplaces can help your brand expand? Download our latest whitepaper for more insights.
