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The effectiveness of online marketplaces in retailers' eyes

The effectiveness of online marketplaces in retailers' eyes

Gain insights about the effectiveness of online marketplaces from the retailers who use them.

Just as shoppers have a variety of reasons for using online marketplaces that determine the sites they use most, retailers have different objectives when selling on them. This influences their choice of online marketplaces. 

The most common objective when using online marketplaces is to reach new customer segments in Australia. Next comes improving their customer database and lifting brand awareness and trust. Other common goals are to increase sales to existing customers and drive customers to other channels. 

Most retailers who have incorporated online marketplaces into their channel strategy believe they are achieving their objectives. Etsy, the marketplace that is most differentiated in terms of quality niche products and being inspiring in the eyes of shoppers, is the most successful (74%* ) in delivering to retailers’ objectives. Google for Retail comes next, closely followed by eBay and Amazon. 

"Each online marketplace has its unique strengths and challenges. It is critical to understand your position in the market and your objectives in adopting online marketplaces within your channel strategy. Then you can map this to the online marketplaces that your target customers are using."
- Jerry Macey, National Manager, Retail Industry, Business and Private Banking, Commonwealth Bank of Australia

Adopting online marketplaces as a channel also has its challenges. While the intensity of competition is a common issue across most marketplaces, retailers consider high fees and commissions a particular challenge when using eBay and Google for Retail. Meanwhile, Amazon and Facebook Marketplace present more challenges when it comes to control over product placement.

Key objectives for using online marketplaces

Reach new customers in Australia Improve customer database Drive customers to other channels Sell excess stock Sell out of season stock Reach new international customers Success rate
eBay     eBay eBay   68%
Facebook Marketplace Facebook Marketplace Facebook Marketplace       62%
Gumtree Gumtree   Gumtree     52%
Google for Retail Google for Retail Google for Retail       70%
Amazon   Amazon     Amazon 66%
Etsy*     Etsy*   Etsy* 74%

*Small sample size was used. Results are indicative only. Insights are based on surveys conducted among both retailers and consumers by ACA Research on behalf of the Commonwealth Bank. This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. You should consider seeking independent financial advice before making any decision based on this information.