Retail has been under massive pressure for more than a year: complete closures or significant restrictions are causing sales to collapse in the corona pandemic. Fashion brands that want to get through the crisis must enter e-commerce now at the latest. Marketplaces are suitable for achieving a large reach and addressing the right target groups.
Last updated on November 20, 2022
The Corona crisis is accelerating what has already become apparent in the past: while stationary retail is struggling more and more to win customers, sales in e-commerce are increasing. In the lockdown, the trade even has to close completely, openings are then only possible with restrictions such as distance rules and masks, which are anything but conducive to the on-site shopping experience. Digital trade is therefore the solution for manufacturers and brands to save or even expand sales in the current situation. Because customers prefer to shop online at the moment. The shift in sales to e-commerce has become even more important with the Corona crisis: As things stand today, the digital share of total sales in sectors such as clothing or consumer electronics is already between 20 and 30 percent
Manufacturers should now enter the digital business at the latest. Marketplaces such as OTTO or Amazon, Zalando or About You are ideal for this for various reasons. Above all, they offer a high reach: OTTO recorded 78 million visitors per month in 2020, Zalando 30 million and About You 10 million. By connecting to such marketplaces, small or medium-sized companies and brands in particular can reach a large target group. In addition, the target group can be addressed in a more differentiated way via marketplaces, and this control is particularly important in the fashion industry. Thanks to their high reach, marketplaces offer a high level of scalability overall: connecting to just two or three platforms enables sales growth that would otherwise only be achieved by acquiring several large, stationary retail customers.
The ranges and individual products are presented online in a comprehensive and high-quality manner with many photos and descriptive texts. If individual products sometimes go unnoticed in the store, they are presented online clearly and of equal value. Especially closed marketplaces place high demands on data quality and content and also bring a high level of expertise in online marketing: They attract many users with shopping events and targeted discount campaigns – the increased traffic is measurable and visible in the sales.
For small brands that do not yet have a branch, online presence or their own sales organization in a country, digital marketplaces are ideal because they can test market entry. At the same time, they can create a quick and smart entry into e-commerce. This applies both to brands that want to expand into Germany from abroad and to German companies that want to expand into other European countries.
The quicker you can connect to the marketplace, the better. For a quick go-live, the selection of the right marketplaces is important – they have to fit the brand with their target and product groups. Open marketplaces such as Ebay or Amazon do not have access restrictions, anyone can place themselves here. However, the competition is also greater here. Closed marketplaces such as Zalando or About You only allow placement with brand approval.
Manufacturers have to negotiate the conditions with every marketplace in contract negotiations. This takes time, ideally a few weeks, but it can also take several months. The provision of product data and photos can also be time-consuming, as these must be compliant for the respective platform. Brands that already have a web shop have an advantage here, since the preparation of the data is usually time-consuming and laborious.
It makes sense for manufacturers to pursue a multi-marketplace strategy and sell their products on multiple platforms – especially since technical connections can easily be established with the help of a service provider.
It should be noted that not every marketplace is suitable for every manufacturer: every platform has a different focus with regard to its target groups. It is also important that the marketplace has to match the pricing policy of the manufacturer. In addition, some insights are surprising: OTTO.de, for example, can be an ideal marketplace for streetwear, which one would actually have expected from Zalando or About You. The reach of the target group may be lower with an apparently unsuitable platform, but the competitive situation is more relaxed.
Initially, however, it makes sense to start with connections to a few marketplaces. In this way, insights can be gained and the processes can be checked. On this basis, you can scale and build a multi-marketplace strategy.
Once the right marketplace has been found, it is important that the products go live quickly. It is crucial that all and the correct product data is available. This is particularly important for a multi-marketplace strategy, since the different platforms also have different data requirements. It should also be noted that the larger the manufacturer’s range of goods, the more time it takes to provide the correct data.
If data is missing, the wrong data is available or there is a problem with the quality, manufacturers must be careful not to get lost in an endless correction loop that costs a lot of time and thus sales. In addition, marketplaces often check the data quality manually before going live, which can slow down the go-live. If a manufacturer has already caused problems in the past, its prioritization decreases – and the go-live is further delayed.
Even after going live, it takes a lot of strength and energy. Because projects have to be pushed forward, data made available and evaluated. In addition, manufacturers must respond to the analyzes accordingly: For example, if an item sells poorly or is returned frequently, it must be taken offline.
With the help of a marketplace service provider, the onboarding process can be significantly accelerated. External support is particularly useful for a multi-channel strategy. The glove specialist Reusch, for example, managed to go live in just a few weeks – just six weeks passed between contact and the first online generated sales at the SportScheck marketplace. The sale started with 66 items, currently 126 are live. Due to the rapid commercial success, sales were also rolled out to other marketplaces.
Thanks to the strategic advice of a service provider, manufacturers can find the right marketplaces for them much faster. In addition, there are no time-consuming contract negotiations, since brands can add to the service provider’s already negotiated contracts with individual marketplaces. In addition to the contracts, there is already a relationship of trust and a functioning cooperation between the service provider and the relevant decision-makers on the platform: operational processes, especially logistical ones, already meet the requirements of the marketplaces. This makes it much faster to connect new brands. Certain service providers also offer ready-made solutions when it comes to interfaces, so that this time hurdle can be overcome quickly and easily.
E-commerce is becoming increasingly important for manufacturers and brands. In the Corona crisis in particular, sales in stationary retail have plummeted, and customers are increasingly shopping online. In order to reach a large audience, to scale and to increase sales, digital marketplaces are a good way, especially for manufacturers in the fashion industry. However, a quick connection to these requires a lot of time and knowledge, especially with a multi-channel strategy. Service providers can give brands good advice here and enable the go-live quickly and easily.
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