6 Retail E-commerce Strategies to Increase your Bottom Line

Marketplace sales currently account for 67% of the global online retail sales. In 2021 alone, about $3.23 trillion was spent on the world’s top 100 marketplaces. Mastering a marketplace is a proven way of effectively scaling an e-commerce business, so if it’s not part of your 2023 growth strategy, pay attention

What do we mean by a marketplace?

A marketplace is a platform where sellers and buyers join forces to buy and sell products. Amazon was one of the original marketplace platforms, and continues to dominate the space today – but don’t let that put you off. There is still plenty of room to make a profit in the platform economy, especially for niche businesses in both the B2B and B2C sectors.

Gartner predicts that by 2023, 15% of medium-to high-gross-merchandise-value digital commerce organizations will have deployed their marketplaces, thereby creating an entirely new digital ecosystem – and your business could be one of them. For businesses with an existing traditional e-commerce platform, a digital marketplace could be the next growth step towards accelerating customer acquisition and increasing revenue.

Starting a marketplace for growth

One major advantage of the marketplace model is that you can offer your customers a much larger product offering, without taking on the inventory risk – a win-win for all stakeholders involved. A broad product portfolio and higher inventory levels equate to easier discovery by customers, which in turn leads to sales.

Many B2B and B2C businesses worry about the competitive nature of enterprise marketplaces. However, they fail to consider the benefits they could lose out on if they disregard a marketplace as a future growth opportunity.

Borders are becoming increasingly meaningless when it comes to e-commerce. For example, a customer sitting in Europe can order an item from China, or vice versa, and pick the best deal from multiple international sellers. While this creates increased competition (especially with low manufacturing costs in developing countries), it also opens up the possibility for a much larger customer base.

80% of retailers worldwide agree that cross-border trade is profitable. Forrester predicted that cross-border purchases made up 20% of all e-commerce trade by 2022, illustrating that internationalization is a hot ticket on the agenda for many businesses. So, if you’ve got a viable business model in your home market, in 2023 you should consider expanding to new countries as part of your growth strategy.

Of course, it’s important to consider how the market might be different in another country, but internationalization remains a key and very important strategy for success. When choosing an e-commerce software provider, opt for one with a multi-store capability. This allows you to create a single store with one product database that can serve multiple regions or languages, or separate regional stores with localized product offerings.

43% of sellers report that managing customers’ delivery expectations is a big issue when going international, so it’s important to consider your logistics infrastructure before launching any large internationalization projects.

Consider internationalizing through an enterprise marketplace. It’s an effective way to test your products in different markets without a huge investment, before fully going to market.

Expanding your brand offerings could be also part of your 2022 growth strategy. Enterprises should consider brand expansion for a number of reasons, such as target new customer bases or taking advantage of niche offerings.

Similarly to internationalization, it’s important to work with an e-commerce system that utilizes multi-store features. This helps you to easily manage multiple storefronts with distinct brand positioning from the same core product assortment. You can then customize these separate storefronts depending on your customer or market needs. For example, provide specialized discounts, or enable a completely different store logic and navigation experience.

While some business models were decimated due to the pandemic, others have soared above and beyond expectations. One such industry is social media. There are now more than 4.5 billion social media users around the world, growing almost 10% in a year, and TikTok just hit the 1 billion user milestone. Billions of users equal billions of potential customers, so it’s no surprise that social commerce is growing into a giant industry – and a key growth strategy for e-commerce in 2023 and beyond.

Shopping on social media is expected to triple by 2025, growing from $492 billion in 2021 to $1.2 trillion by 2025. Whether it’s via Instagram, Facebook, Snapchat, TikTok, Whatsapp, Wechat, or more, social media platforms are generating new ways to reach customers every day, and analysts predict that it’s going to account for a huge chunk of e-commerce sales in the future

One exciting revenue stream opportunity within the social space is live shopping. China is leading the way, with two-thirds of Chinese consumers reporting that they had bought products via lifestream in the last year. Meanwhile, 2020’s Single’s Day presales campaign on Taobao Live generated $7.5 billion for Alibaba in the first 30 minutes alone. McKinsey predicts that if we take China as the leading example, live shopping sales could account for as much as 10-20% of all e-commerce by 2026.

A reported 70% of Europeans are open to live shopping, however, it’s still a relatively small market compared to China, which means that there is a huge opportunity for businesses willing to invest in this growth strategy.

What exactly is social commerce? Social commerce is the method of promoting and selling goods or services directly via social networking platforms. It includes practices such as offering promotions, creating viral video content, recommendations or endorsements via influencers.

What exactly is live shopping? Live shopping combines the sale of a featured product with instant audience participation through chat or reaction functionality through internet livestreaming.

Interested in the growth of live shopping and social commerce in China and beyond? Watch our episode of Spryker OnAir with Kai Ding, an e-commerce expert in China.