Global online marketplaces like Amazon and Alibaba's Tmall have risen to prominence and are becoming a competitive threat to retailers and brands around the world.
According to a 2018 Salesforce survey, merchants have reason to be concerned. Online buyers are starting their hunt for products on marketplaces with increased frequency. In 2018, 28% started their searches on platforms like eBay or Amazon, up from 22% in 2017.
When internet users worldwide were asked where they would go to buy an item the first time, half said a retailer while 31% cited a marketplace. But when going to buy the same item a second time, the channels were reversed: 47% said they would purchase on a marketplace and retailers received 34% of subsequent buys. Brands had lower levels in both scenarios.
Marketplaces won first and foremost on price (56%). Once a shopper knows what they want, they seek out lower prices regardless of channel. Consumers also turn to marketplaces for product variety (51%), availability (50%) and inspiration (48%).
Price was also the leading factor for shopping on a marketplace instead of a retailer or brand in an April 2018 UPS and comScore study of five regions and countries. However, US shoppers were less likely to be swayed by free and discounted shipping (42%) than most, likely because there already is an expectation for free shipping from US retailers. The US also had the lowest number who cited broader product selection (28%) as a motivation.
What can retailers offer that marketplaces don't? Retailers received high marks for customer service (57%). And while brands weren't the first choice for shoppers, they stood apart from both marketplaces and retailers on quality (60%), innovation (58%) and uniqueness (48%).