This means the beauty and healthcare industry is taking the leap into the Internet determinedly by leveraging the potential of this channel with new technologies like artificial intelligence and augmented reality. The main objectives: deliver great personalised customer experiences and differentiate from the competitors.
How do beauty brands and retailers successfully engage with their customers? How do they answer their customers’ demands? Can brands and retailers of other industries benefit from online cosmetics success stories?
The fact is that consumers increasingly appreciate the value of their free time and, consequently, look for formulas that let them use their time effectively. As a result, the shoppers’ main demands are directly related to their time management: personalisation and instant gratification in the form of faster and more convenient deliveries.
It is therefore not surprising that curated services based on subscription models are lately succeeding in sectors in which online stores are struggling to pave the way for the digital market, such as beauty and cosmetics (with pioneers Birchbox), lingerie (with Adore Me) and fresh food (like HelloFresh).
Marketplaces have been a recurring topic in Handelskraft posts. We have examined their usefulness for B2B and also hybrid formulas in which marketplaces play an important role. More recently we discussed the marketplaces’ ever-growing tendency that directly threatens retailers business. Today however we want to put the focus on the consequences of the wide spread of successful marketplaces for consumer behaviour.
It is nothing new that shoppers use just a few of the dozens of apps installed on their smartphones and tend to research and make purchases on those websites or apps where they can find absolutely everything without the need for switching to different retailers’ or brands’ online shops. Blame it on Amazon!
Marketplaces, the advanced generation of shopping centres
According to the latest UPS Pulse of the Online Shopper study conducted by comScore, 65 per cent of respondents purchase at a marketplace instead of a retailer because of its better prices and 55 per cent because of free and discounted shipping.
Best-in-class marketplaces have the capacity to offer very competitive prices and superior delivery services. Actually, among others, Amazon, Zalando, Otto and Etsy are constantly rising above themselves with the objective of delivering outstanding customer experiences at the fulfilment stage.
Searching products on….
Google a marketplace!
However here comes the good bit. The study found that 38 per cent of consumers start their online search at a marketplace, more than on any other channel. And looking at the future, 30 per cent predict that they will purchase more on marketplaces while 29 per cent will research more on them.
Thereby marketplaces will likely be seen as a strategic channel by brands that want to be present, searchable and found online, since the objective of every company is to be where the target group goes.
One of the most recent examples in Germany is REWE. A few days ago REWE announced the launch of its first global marketplace through which the company intends to sell not only groceries, but also all kinds of products, taking advantage of its reputation and leveraging its enhanced delivery services.
Should everyone be at a marketplace now?
The proliferation of vertical and horizontal marketplaces makes it more attractive and challenging to answer this question. Perhaps for jewellery brands it would be more appropriate to be present on a marketplace that’s vertical like TrueFacet.com, while Zara would find it more interesting to be at a horizontal marketplace like Dote, which offers the opportunity to shop at multiple retailers simultaneously. Or perhaps it is enough to invest some budget in advertisement there.
In any case the decision should be made carefully because marketplaces have pros, but also critical cons, like the fact that sellers do not own their customer data.
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Amazon-Whole Foods deal – Will omnichannel be the final formula to digitalise the grocery industry? [5 Reading Tips]
However, over the past years the e-food industry has globally experienceda period of growth and continuous innovation which could trigger the definitive boost that enables e-food business to go mainstream.
The last move, which took everyone by surprise, was the deal between Amazon and Whole Foods through which the online giant acquired the popular organic supermarket chain for $14 billion. This could not only revolutionise the whole grocery market in the US, but could also have implications worldwide. Will Amazon’s new formula for digitalising the grocery industry be successful?
This promising core technology can be applied in many ways, but it seems many efforts are focused in one direction: to facilitate valuable and natural conversations between people and businesses within a single platform, thereby capitalising the greater popularity of a few core apps. Does this mean that the end of app stores is closer than ever?
Many of these purchases are made online but how solid is the digitalisation of German DIY stores? How is the DIY online sector evolving? Who are the leaders and what are the pain points?
Google, Pinterest, Zalando and more recently Wayfair are making big steps to leverage visual search technologies and, honestly, the new functionalities are quite promising. Will visual search (more than voice search) catch on in e-commerce?
The possibility of integrating a third party’s APIs into a system, app or protocol helps companies to orientate their digital business towards a more customer-centric approach or even towards the creation of new business models. Why is the API economy on the rise?
This is only one example of how companies are adapting to the new demands of the digital shopper. But what other strategies and aspects should retailers take into account in order not to lag behind and disconnect from their customers?