67% of all online sales are already coming from marketplaces, and their share of buyer wallets keeps on growing. What's new is the rising wave of niche, themed, and Creator-led marketplaces being able to compete for eyeballs and wallets with the Amazons and Walmarts of the world. Check out what differentiation and defensibility growth hacks they're using.
10 tactics to make shoppers love your marketplace
- Convenience: Marketplaces offer customers unparalleled convenience by bringing together various brands and products into one easy-to-navigate space. This not only saves time but also improves discoverability and simplifies the shopping experience.
- Best deals: Marketplaces, thanks to their economies of scale, can offer frequent promotions and discounts. Furthermore, many marketplaces have product bundles or other add-ons that can help you save more money. For example, a customer may be able to purchase a bundle of multiple products at a discounted price, or a marketplace may offer free shipping with certain purchases.
- Safety: Shopping on marketplaces offers an unbeatable level of trust and security. These platforms work hard for their reputation by verifying sellers and monitoring their performance, which makes them trustworthy shopping destinations. In addition, they offer secure payment methods and actively implement fraud protection measures to keep customers' financial information safe. And if something goes wrong with a purchase, customers can rely on the marketplace's customer service team to quickly resolve the issue.
- Smooth checkout experience: Marketplaces enable shoppers to buy products from multiple brands or sellers in one single checkout. This not only saves time for the customer but also simplifies the payment process, as all purchases are processed through one platform.
“Companies like Amazon have set that bar so high on what that checkout experience should look like, and what that discovery experience should look like, and that’s what everyone is competing against,” - Joe Del Preto, CFO of Sprout Social
- Shipping and returns: Marketplaces offer a variety of convenient shipping options, often including free shipping and fast delivery times. Additionally, when it comes to returns, most marketplaces make the process easy and cost-free for customers.
- Excellent customer service: Marketplaces employ entire teams dedicated to customer success, ensuring quick response times and effective problem-solving for any issue that may arise. This level of dedication to customer satisfaction is simply impossible for small eCommerce brands to match.
- Cross-category bundles: Not only can customers easily find products within their desired category, but they can also discover complementary products that they may not have thought to purchase. This not only adds convenience for the shopper but also allows them to save money by buying in bundles.
- Frequent new arrivals: Shopping at a marketplace has the advantage of frequent new arrivals. Since marketplaces work with many different vendors, they can constantly bring in new brands and new products. This continuous rotation offers something new for the marketplace to send by email and for shoppers to discover each time they visit. And because marketplaces do not handle inventory or shipping, there is no limit to the number of brands and products they can offer. DTC brands simply cannot keep up.
- Shareable wishlists: Wishlists have become must-have features for marketplaces. Shoppers can save their favorite products and easily compare them. But wishlists also have the added benefit of being shareable, making them particularly helpful for birthdays, weddings, and baby showers. By sharing their wishlist with friends and family, the gift recipient can ensure they receive exactly what they want.
- Gift cards: Gift cards have become a key feature for any successful eCommerce marketplace. Not only do they give customers the option to gift their friends and family with the convenience of not having to choose a specific physical item, but they also eliminate the risk of giving an unwanted gift. Gift cards allow recipients to select exactly what they want, making them a much better option than simply giving cash.
Unfair marketplace advantage
Shopping online can often feel overwhelming and time-consuming, with countless options and a seemingly never-ending stream of products. Another frustration many consumers encounter is the constant need to enter payment information and shipping addresses, not to mention the added step of creating an account on certain websites.
This is where online marketplaces have a major advantage: by consolidating multiple brands and retailers into one platform, shoppers only need to create and manage one account with saved payment and shipping information.
Some of the features that make marketplaces so user-friendly include easy product discovery and search options, sophisticated filters to help customers find exactly what they're looking for, personalized product recommendations, and even wishlists to save items for later.
By constantly enhancing and refining their user experience, marketplaces can attract more customers and keep them returning for more.
But how do they compare to each other? Can customers even tell the difference? Is there room out there for more than a handful of big, dominant players?
Spoiler alert: YES!
How top marketplaces differentiate their value prop
Amazon
Amazon is, of course, a dominant player in the online marketplace space. It offers its customers a vast selection of products, ranging from household items to clothing to electronics. This extensive inventory allows shoppers to easily find what they need, making Amazon's website a convenient one-stop shop for everything. Amazon's efficient shipping methods further enhance the user experience, offering timely and convenient delivery options such as Amazon Prime's free two-day shipping.
Walmart
One of the things that set Walmart apart from other online marketplaces is its wide selection and low prices. Customers have access to not only Walmart's own products but also items sold by third-party sellers. And thanks to Walmart's pricing policies, including their price matching guarantee, customers know they are getting the best deal. Additionally, Walmart offers convenient options for delivery and pickup. Customers can opt for free two-day shipping on eligible items or choose to pick up their order in-store at no extra cost.
Target
Target offers a range of products from popular and niche brands, often at competitive prices, and makes it easy for customers to search for specific items or browse through categories with their intuitive eCommerce platform. Target's website also provides unique features: adding "Target Circle" offers directly to your shopping cart or in-store pickup options for certain items. However, what really sets Target apart is its commitment to customer satisfaction. Target offers free shipping on orders over $35 and has a great return policy if an item doesn't meet expectations.
eBay
eBay has solidified itself as one of the leading online marketplaces, with millions of buyers and sellers using the platform daily. One thing that sets it apart from other marketplace platforms is its combination of auction-style and fixed-price listings, allowing users to both bid on items or quickly purchase them at a set price. eBay also offers a robust seller rating system, where buyers can leave feedback for sellers, creating a sense of accountability and trust in transactions. Another standout aspect of eBay's user experience is its reliable buyer protection program, ensuring that purchases are legitimate and as described by the seller.
Etsy
Etsy has quickly become a go-to destination for unique and handmade goods. This is thanks to the fact that it promotes a sense of community and connection between buyers and sellers. Many Etsy sellers have their own shops with personalized branding and design elements, creating a more personal shopping experience. In addition, Etsy's search function enables shoppers to easily filter results by handmade items, price range, location, and even material used in the product. Overall, Etsy offers a user experience that is not only highly convenient but also highlights the creativity and passion of small businesses and individual creators. This focus on personalization and connection is a big part of what makes Etsy successful as an online marketplace.
Farfetch
Farfetch, launched in 2008, is an online marketplace for luxury fashion, connecting shoppers with high-end boutiques and brands from around the world. What sets Farfetch apart from other marketplaces is its carefully curated selection of products featuring both well-known designer brands and smaller, emerging labels. This uniqueness also extends to Farfetch's user experience - instead of browsing individual product pages, shoppers can visit virtual boutiques designed to mimic the in-person shopping experience. In addition to all of this, Farfetch's seamless mobile app allows for effortless shopping on the go. It's no wonder Farfetch has become a go-to destination for luxury fashion enthusiasts around the globe.
Net-a-porter
Net-a-porter, an online luxury fashion marketplace, has seen immense success since its founding in 2000. The curation process for brands and products sold on this platform is very strict. Net-a-porter only selects high-end designer labels, ensuring a luxurious shopping experience for customers. Another thing that sets Net-a-porter apart is its focus on editorial content featuring fashion styles, trend reports, and interviews with industry experts. This sets Net-a-porter apart as more than just a marketplace but also a destination for fashion inspiration and education.
Asos
Asos has carved out a niche for itself in the ever-growing world of online marketplaces, cultivating a reputation for affordable yet trendy fashion. As a digital-native brand, Asos offers shoppers an intuitive and user-friendly platform to browse and purchase items. The platform's focus on curating diverse styles and sizes has also helped it stand out among competitors, catering to customers of all body types and levels of personal style. Asos's success is also attributed to its speedy delivery and generous return policies, providing peace of mind for online shoppers as they make purchases.
Zalando
Zalando offers free shipping, easy returns, and a wide selection of products from both well-known brands and smaller labels (over 1500 brands in total!). Additionally, Zalando sets itself apart from other marketplaces by offering personalized recommendations based on each customer's browsing and purchasing history. Finally, Zalando offers a wide range of fashion styles at various price points, making it a one-stop shop for all fashion needs.
Goop
Goop, founded by actress Gwyneth Paltrow, offers a unique shopping experience with its content-driven approach to eCommerce. Goop customers can not only browse and buy products, but they can also access informative articles and expert advice on health & wellness, travel, and style & beauty. This curated content, combined with Goop's carefully selected assortment of exclusive partner brands and products, sets the online marketplace apart from other eCommerce sites. Goop's focus on building trust with customers through transparency and collaboration with influencers in various industries has also contributed to its success.
Maisonette
Maisonette has quickly established itself as a go-to destination for high-end children's clothing and accessories. What sets Maisonette apart from other online marketplaces is its precise curation and user-friendly navigation. Each item on Maisonette is handpicked, ensuring a level of quality that sets it apart from mass-market retailers. In addition, Maisonette allows users to shop by age and occasion, making it effortless to find the perfect gift. Maisonette's success can also be attributed to its collaboration with influential tastemakers, such as designer Rachel Zoe and fashion editor Taylor Tomasi Hill, who have each curated collections on the site.
Surfdome
Surfdome has succeeded as an online marketplace for surfing, skating, and snowboarding gear, thanks to its top-notch user experience. The site offers a clear and easy-to-navigate layout, along with helpful filtering options that allow customers to find what they're looking for quickly. Surfdome also boasts a large selection of brands and products, ensuring shoppers can access the latest in gear and fashion without having to search multiple websites.
Woo by ITV
Woo is a modern Gen Z wellness brand combining provocative editorial content with a highly-curated marketplace (running on Vendo). It attracts its audience with an explosive mix of social media content, documentaries, and comedy series featuring major TikTok stars - all while keeping wellness at the forefront. Woo also allows its Gen Z customers to shop by moods such as reset, chill, horny, main character, and trippy. Sharing wooness is made possible with product edits such as "gifts for your ride or die", "gifts for your parents", "gifts for the teenager", or "conscious gifts". Products from 150 brands are also discoverable by labels such as 100% Vegan, Cruelty-Free, Designer, Female Founded, Made in the UK, Unisex, B-Corp, Black Owned, Circular Fashion, Made in the UK, and Made with recycled plastics.
How to differentiate your marketplace from the Amazons and Walmarts
The online marketplace model has proven wildly successful for many existing platforms, and for a good reason. Customers love the convenience of shopping from multiple brands and categories in one place, with a streamlined checkout process and free or subsidized delivery options.
"Despite the existence of giants like Amazon, Farfetch, or Etsy, the market also sees a quickly growing number of niche, themed, and Creator-led marketplaces" - Damian Legawiec, Vendo co-founder
While the biggest players compete mostly with low prices and savings on comparable products, there are several differentiation and defensibility strategies that marketplace founders may apply to their audience focus, branding, and product catalog curation to stand out.
In the new content-driven eCommerce world, customers value niche one-stop shops presenting them with experiences and value-added shopping instead of just savings. The creator economy is booming, and the younger generations rely more on influencers' recommendations than advertisements. Also, in some categories, such as fashion, beauty, and wellness, individual products are not easily comparable anyway.
On the supply side, with paid ads no longer being affordable or efficient (soon even less effective due to Google phasing out cookies), many DTC brands are looking for new sales channels with organically grown and emotionally engaged audiences. This presents a huge opportunity for forward-thinking entrepreneurs and content creators to launch their own marketplaces and tap into this demand.
6 ways Vendo helps you launch your eCommerce marketplace
- Start selling in just 14 days using our free trial
- Run your eCommerce business on your terms. Onboard domestic brands and products you love yourself and match your community's needs and interests.
- No inventory management, warehousing, or order fulfillment - only virtual inventory in a dropshipping model!
- You can scale your business quickly by constantly onboarding new brands from Shopify or WooCommerce as your marketplace sellers.
- Vendo plays nice with Stripe, Klaviyo, Segment, Aftership, and other leading providers.
- Thanks to built-in marketplace reporting, vendor invoicing, and marketplace taxes, you don't need any other platforms. Vendo is an all-in-one, end-to-end solution.
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