Third-party (3P) commerce is on the rise, with U.S. retail e-commerce sales projected to hit $588 billion by 2027. Online marketplaces will make up nearly 40% of that growth, according to eMarketer. 3P commerce enables brands to sell directly to consumers through retailer marketplaces. However, managing multiple channels can be challenging. Many brands are now outsourcing marketplace management to reduce risks, adapt to changing demands, and ensure smooth operations.
Why are marketplaces so crucial right now?
Consumers want more options before making a purchase. The 2023 Online Consumer Behavior Global Report by Rithum and Dynata found that 82% of global shoppers visit two or more websites before buying. Additionally, 72% of consumers explore two to four websites before making a decision. To reach these consumers effectively, brands are turning to 3P commerce models to scale quickly and efficiently.
Third-Party Commerce is the Future of E-Commerce
Consumers want multiple options when shopping online, and brand leaders are taking note. A recent Forrester study, commissioned by Rithum, found that 77% of brand leaders believe online marketplaces are growing faster than traditional sales channels. This trend is prompting both new and established brands to rethink their go-to-market strategies.
While scaling to a new marketplace offers significant benefits, managing it in-house can be costly and time-consuming. Outsourcing marketplace management to a single platform allows brands and retailers to leverage years of experience, a quality network of suppliers, and cross-channel insights. This enables them to focus on performance management and adapt to the specific requirements of marketplaces like Target+, Nordstrom, and others.
3 Benefits of Selling Through Third-Party Marketplaces
Marketplaces are rapidly growing and offer brands and retailers the chance to expand quickly and profitably. Third-party marketplace services enhance business resilience in three key ways:
1. Access to Valuable Data and Expert Support: Third-party marketplace services provide extensive data on customer purchases, sales trends, and market dynamics, helping businesses make informed decisions about inventory, pricing, and promotions. Experts also assist retailers in complying with regulations and optimizing listings, reducing the risk of costly mistakes.
2. Reducing Risks and Increasing Flexibility: These services minimize the need for large inventories and eliminate markdown risks. If a retailer runs out of a product, cross-channel strategies enable suppliers to fulfill orders on multiple sites, reducing stock-out risks.
3. Reaching New Customers and Improving Efficiency: Each marketplace has a unique audience, offering retailers the opportunity to reach new customer segments and increase brand awareness. Marketplace services streamline operations by centralizing order management, inventory tracking, and fulfillment processes, reducing errors and saving time. This efficiency allows businesses to quickly adapt to market changes and customer needs, ensuring business continuity and fostering innovation.
Source: Nathan Bird, totalretail
