Multichannel eCommerce Trends from IRCE 2017
- Foot traffic at IRCE 2017 in Chicago felt noticeably down in each of the last two years. Who's missing?... Competitive sellers.
- The number of exhibitors also appeared in decline amid a wave of consolidation and heightened competition.
Where have all the sellers gone?
If you don't own your own brand or have exclusive rights to resell on Amazon, eBay, Walmart Marketplace and Jet.com, you're on the wrong side of an alarming trend. Make no mistake about it, competitive sellers are facing extinction, faster than many have thought.
Brands owners and manufacturers are going direct to consumer. In many cases they're working with the marketplace channel to restrict sellers from selling their products. Some brands are selling on the marketplace side (3P), others are selling as a wholesale vendor to the channel (1P). Some sellers are doing both. For more on this concept, read The Hybrid Approach To Selling On Amazon: 1P vs 3P.
In 2015, our final year operating our multichannel retail business, we saw the writing on the wall. Entire categories were being closed off to sellers of competitive products. For us, this was most strongly felt in the fragrances and cosmetics category.
At Zentail, we're aggressively positioning our platform to help sellers adapt to the changing landscape. The technology and insights we offer are carefully delivered to give our sellers the advantage. For competitive sellers, we believe the following steps must be taken in order to ensure your business will survive and thrive in the new era ecommerce:
- Focus on a niche and develop relationships with your suppliers (ideally exclusive) and economies of scale on each of your product lines to protect your margins as pricing pressures mount.
- Avoid dropshipping, there's simply not enough margin or fulfillment performance consistency to build a large business.
- Own your own customers; focus on your own webstore and leverage Google Shopping to acquire customers. You don't own your customers on Amazon, eBay, Walmart Marketplace, Jet.com or any other marketplace channel.
- Strongly consider your own private label brand. Others sellers can't compete on the same ASIN or marketplace listing if it's your brand and you control your distribution.
Where have all the vendors gone?
Large technology vendors are gobbling up niche vendors. Think Netsuite buying Bronto, Oracle buying Netsuite, Salesforce buying Demandware, and SAP buying Hybris. This trend initiated at the enterprise level and is quickly moving to mid market. The small and medium sized business segment is also showing signs of consolidation. Think Stamps.com buying ShipStation, Shipworks, ShippingEasy and Endicia. We expect this trend to continue.
Multichannel ecommerce is evolving so quickly, only the best vendors from a technology and strategy perspective are able to adapt fast enough to meet the changing needs of sellers. Choose your software vendors wisely.
Please share your thoughts and let us know if you have any questions.