Yesterday our host Chloe Thomas attended Europe’s largest dedicated marketplaces event – Retail Without Borders. Here are her takeaways on the future of eCommerce, emerging markets, China, Tmall, Taoboa and more.
I went a little off script at times – so worth having a listen too!
Hello MasterPlan world – great to have you all listening, and I’m really pleased to be bringing you another Takeaways episode, the first of 2018.
As always with these – please excuse the slightly less good audio (these ones are edited by me so I can get them to you all super fast!) and any typos that have slipped through.
Before I get into the takeaways I had a very special request a couple of weeks ago in the eCommerce MasterPlan World Facebook Group . So I’d like to say a big ‘hello’ to Ostara Bayly, founder of Sweet Cloud Designs – Ostara is designing and creating her own products, and selling them in her Etsy shop. Pretty impressive considering she’s only 10 – if you’d like to check her gorgeous products just have a look on Facebook for Sweet Cloud Designs. Ostara – I’m seriously impressed with what you’ve achieved – you have a bright future ahead!
Retail Without Borders 2018
Last week I attended the marketplaces focused conference Retail Without Borders in London: The largest dedicated marketplace event in Europe!
As you know my focus is on growing an eCommerce business by improving the marketing – customer acquisition, customer loyalty, and customer retention.
So why I did I attend a conference focused on selling overseas via marketplaces?
Well – because for many businesses the strategies of international and marketplaces are important parts of their growth plans. And whilst I’m no eBay guru it’s important for this marketing advisor to understand the wider eCommerce ecosystem.
And wow were there some interesting things to learn about international marketplace opportunities, and a couple of interesting tools and solutions.
Let’s start with the tools.
I’ve got 3 to talk about:
1. Price searcher
If you have a good Google Shopping feed – then you should be submitting it to price searcher too.
They operate in 10 global regions (including the USA, UK, Ireland and others in Europe) and are a product search engine – that it is free to list on!
They are getting over 1 million searches a month.
That may be some way shy of Google BUT it’s sufficient that one UK high street retailer was getting so much business from them that they requested a way to buy more! And so Price Searcher have bought forward their advertising options.
So – free traffic, by providing a product feed. It’s a no brainer? Right? Head to pricesearcher.com for details.
2. Free Market FX
If you play the money markets with your businesses’ foreign currency (if you’re not sure – ask your accountant) then check out Free Market FX – a new service with phenomenal exchange rates that’s specifically set up for retailers. Take a look at freemarketfx.com
If you’re getting payments from marketplaces in other countries, you could increase your margins by a few percentage points by using Payoneer to convert your cash back into your currency rather than letting the market place or your bank do it.
Super simple to set up Plus, as a listener, you’ll find a special offer here
Other key lessons from the event…
TEST AND MEASURE
This was mentioned in almost every session I sat through.
The marketplace game is one of testing and measuring. Start small (even the guy who advises huge brands was suggesting to start small in a new region). Learn, and roll out what works – be driven by your customers.
THE NEXT 10 YEARS WILL BE NOTHING LIKE THE LAST 10 YEARS
The day started with a keynote from Porter Erisman, former VP at Alibaba, and author of (now on my reading list) “Six Billion Shoppers: The Companies Winning the Global E-Commerce Boom”.
He ran through some of the key messages from his book, which is that if you want to be involved in the eCommerce boom that happens over the next 10 years, it’s not going to be happening in the west, and it’s not going to be like the growth spurt the west saw.
That’s roughly all because the pattern of retail evolution has been quite different. In the west we had the small one off store, which evolved into chains and department stores and supermarkets, then along came eCommerce. Building on the infrastructure already in place.
In the emerging markets (South America, China, Indonesia, Asia, and Africa) eCommerce came along in a market where there were just the local stores. So it’s had to build its own infrastructure to thrive on.
To put it simply eCommerce in the west disrupted the existing retail ecosystem, in emerging markets it is CREATING the retail eco-system.
Sorting out payment methods, logistics, and training customers. That’s led some interesting evolution so far –and more to come.
It’s also a key reason why so many businesses have chosen to enter these geographical markets through marketplaces – because one retailer alone is going to struggle all these issues. But a marketplace can solve the problems for everyone.
Porter describes what’s happening now as a “golden era for eCommerce in emerging markets”.
But it’s one you won’t succeed in if you just copy what you’ve done in the UK or USA. You have to start from the customer and work backwards. And Porter believes that the model that’s grown in China is a good one to follow.
That means – marketplace is all, and it’s very different….
LET’S TALK CHINA
Josh Gardner, co-founder of Kung Fu Data spends his days helping western brands grow their sales in China. So he took us through some of the key things you need to know about retail in China…
- It’s all about marketplaces. Over 90% of all eCommerce purchases happen on a marketplace
- The biggest of those is the Alibaba set – Tmall, Tmall Global, and Taoboa. And these aren’t Amazon clones….
- Transparency – data is hugely available – you can easily find out what your competitors are achieving – sales, volume, costs and more.
- Accountability – everything you do is ranked and rated
- Competition between retailers is fierce
- Community is at the heart of it – it’s not about speeding up the purchase, but about entertaining the customer
This reminded me of the emotion focus at Internet Retailing Conference late last year (hear the details on that in podcast 123-5). Best summed up by the Daniel Kahnemann quote “if you make them feel more, they will buy more”.
- Silly product shots, live videos – it all happens right there on the platform itself.
- Brand is built on the platform – not on TV, radio or billboards
- There will be multiple sellers selling your products – so it’s ecosystem and competition crazy
- All delivery is free
- Sales volume is driven by discounts – single’s day requires a minimum 50%. And the customers still haggle – among Josh’s clients he sees 3 in 10 request a free gift, and 5 in 10 ask for a discount – no matter how small or large the price of the product.
- Customer expect human interaction in the sales process – they’re asking for discounts, checking the product in REAL, in fact over 66% of sales are impacted by customer service – and they expect responses within seconds, or they will buy from someone else. Your customer service team need to be sales people.
- In Josh’s words “The customer service is exhausting”
So the cost of servicing customers is high, and they are driving down margins all the time.
- It’s a battle for the prime real estate on the platform – you need to be in spot 1-10.
- Which means it’s about fewer rather than larger sku counts for most businesses.
- And driving BIG sales fast to game the algorithm. That means a LOT of urgency– eg First 200 buyers get 50% off, or buy 2 get 1 free for the next 30 minutes.
- And mobile is all – 75% of traffic is on mobile, 80% of the sales happen there.
- And of course there are regional differences too.
Phew – my advice, if you want to tackle China, there is a lot potential, but margins are tights, and you would be well advised to find someone who’s done it to help you.
Unfortunately I had to leave before the sessions on Japan – but take it from me there’s a BIT opportunity there, with many brands testing products in Japan before they roll out China.
And you can find out exactly how to get Amazon Japan working for you – by checking out the session John Cant of Rising Sun Commerce did for us in the eCommerce MasterPlan Virtual Summit – still available for free, along with the other c30 videos.
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There’s a marketplace for everyone these days – so hunt about, do your research (about marketplace and geographic area) then give it a shot – test and measure.
So there’s my updates.
If you want to get stuck into some more conference style content in the meantime then my eCommerce MasterPlan Virtual Summit remains open to registrations (it’s free, and you’ll have access until at least Sept 2018!)
Or why not head to a real world conference?
- IRX is happening in the UK on the 21st and 22nd of March in Birmingham – I’m chairing and it’s a packed agenda of great speakers and exhibitors and it’s free to attend
- Then in the USA 18th and 19th April is Home Delivery World, I won’t be at that one – but it is well worth a visit – use the code “eCommerce” to save 15% on tickets for that one
Have a great weekend everyone and Keep Optimising!