Sitecore OrderCloud has the flexibility to tackle the most vexing online commerce challenges, from various manufacturing go-to-market strategies to online retail and services. Thus we weren’t surprised that in our first appearance in The Forrester New Wave™: Marketplace Development Platforms, Q4 2021, we’re named a Leader.
When it comes to online commerce, both marketplace and e-commerce platforms can serve the essential function of selling goods or services. For those who don’t know the difference between the two we’ll explore it briefly below, while highlighting the main pros and cons of each. We’ll then look at why many brands are opting for their own marketplaces today, before highlighting why this new Forrester report is essential reading for anyone looking to invest in a marketplace platform.
The pros and cons of selling on a marketplace
We’ll begin with marketplaces. Two of the most well-known are Amazon and Etsy. The upside is it’s easy to get started on either. Simply create a seller profile or a retail shop and start selling. The downside is that marketplaces often charge sellers to list items, take a cut from each sale, and may even charge other fees.
Another aspect to consider is brand recognition and trust. One big benefit of joining a huge marketplace like Amazon or Etsy is that you can piggyback off their brand and the trust consumers place in it. No one these days thinks twice about entering their credit-card information into Amazon (assuming it’s not already saved).
The downside of this piggybacking is that Amazon acts as the middleman between you and your customers at all times, not just when it comes to trust. This is a huge downside for brands — they have no way to get to know their customers. No email addresses to send out follow-up communications or promotions. No data to personalize the shopping experience. No direct correlation between a positive experience and your brand. The risk is the brand will always be just another thing the consumer found on Amazon.
The pros and cons of D2C e-commerce
With an e-commerce site, on the other hand, you can gather data, personalize customer experiences, and directly communicate with customers thanks to collecting their content info at checkout. Of course, this assumes you can attract customers to begin with. Which assumes your brand is either well known or knows SEO, has a solid paid media strategy, money to invest in advertising, etc.
Once you’ve drummed up interest, there are other challenges with traditional D2C commerce. From buying or subscribing to a platform, to custom development, to a domain name and HTTPS certificate, and more — the upfront cost for an e-commerce site is higher. But by eschewing fees and commissions, significant savings accrue over time. And you can use the data you collect to continue communications and optimize future engagements, building a genuine (and lucrative) relationship.
Due to the above pros and cons, many brands opt for a hybrid approach: selling products via an online marketplace and on an e-commerce site. Forward thinking brands are also beginning to see the benefit of starting their own marketplaces.
Why marketplace development is expanding
Marketplace development platforms are revolutionizing the way buyers and sellers transact, particularly as the pandemic has forced businesses to find new ways of engaging with buyers and to allocate goods wherever demand exists.
Marketplace development platforms enable marketplace operators to act as digital brokers — getting a cut of gross merchandise value for connecting buyers and sellers, while taking no responsibility to warehouse or provide the goods or services being offered. Marketplace sellers gain the ability to open up new channels to build and own new market and customer relationships. For the customer, marketplaces offer a one-stop shop for all they need to address a specific goal, tailoring everything around that.
Take a car brand as an example. They may not produce all the accessories their car owners want, but if they start a marketplace, they can sell them — offering convenience to their customers, an available and interested market of buyers to the sellers, and a new revenue opportunity for their own business.
Necessary aspects of a marketplace development platform
Forrester’s definition of a marketplace development platform, offers a good set of capabilities to look for to power your marketplace:
“A platform designed to digitize the buying and selling of products and services (one-time, recurring, or metered), where third parties offer products, services, or information to a community of buyers. Transactions are facilitated by the marketplace owner and fulfilled or provisioned by the third party. Platforms may offer built-in tools for sellers to manage their listings, for operators to manage sellers, and for buyers to research, compare, and manage spend.”
— Forrester Research. Cicman, Joe; Ewald, Caleb. November, 2020. “New Tech: Marketplace Development Platforms And Tools, Q4 2020
In addition to key features necessary to offering game-changing marketplace experiences, companies should also seek out several specific technical characteristics in their marketplace development platform.
Marketplace development platforms that enable you to scale, get to market quickly, and maintain flexibility and control over time are:
These kinds of marketplace development platforms, such as Sitecore OrderCloud, are composable in nature, with scalable databases, and they support omnichannel customer journeys.
Choose wisely with help from Forrester
In our opinion, Sitecore being named a Leader in The Forrester New Wave™ is a clear demonstration of the value of Sitecore’s recent acquisition of Four51 OrderCloud, now known as Sitecore OrderCloud. As part of broader Sitecore Commerce solution, OrderCloud is transforming how buyers and sellers transact. No other enterprise ecommerce platform vendor, much less any enterprise DXP vendor, offers a solution that encompasses complex B2C and B2B marketplaces, as well as traditional B2C and B2B storefronts.
Of course, each brand has unique goals and needs when it comes to their online commerce strategy. Everything from marketing efforts to margins to brand goals should be considered when choosing. But with more buyers than ever looking to online marketplaces to make purchases, no company’s go-to-market strategy is complete anymore without a marketplace component.
The Forrester New Wave™: Marketplace Development Platforms, Q4 2021 report is filled with the insight needed to choose the best marketplace platform for your brand’s needs.
Today, every business is an ecommerce business. Future-looking commerce platforms like Sitecore OrderCloud and its marketplace development capabilities will enable you to revolutionize your business as your commerce needs continue to evolve over time.
Download the report to learn more today.
David Schweer is Vice President of Product Marketing at Sitecore. You can follow him on LinkedIn.