Why eCommerce businesses need to embrace a diversifying marketplace

eCommerce businesses are facing an increasingly tough marketplace to do business. Traditional routes to market are becoming more saturated with competition, marketing costs are increasing and eCommerce giants like eBay and Amazon are a dominating presence in online search results.

Google are continuing to tweak their results in favour of their ad platform and also their shopping results. Our online advertising clients have seen a rise in demand for shopping ads with costs rising +14% due to a more prominent location in the search results. This has been met with both an increase in return on ad spend and revenue with clients seeing business growth from traditional shopping ads, new smart shopping ads and also a brand awareness boost from catalogue shopping ads on mobile devices.

Other traditional routes have suffered in 2018. ECRM for businesses has been made tougher from the introduction of GDPR and the traffic business received from organic search is being dented by the shift in traffic towards mobile where organic ads are typically being found far below the fold for eCommerce queries.

With businesses pushing for growth in a strong UK economy, our challenge has been to navigate the changes in the marketplace and drive growth while managing budgets to achieve a continually improved ROI figure.

Diversifying into becoming an Amazon or eBay merchant

Affinity are constantly monitoring online auctions to be aware of marketplace competition, trends and also our client’s performance in the search space. It has been clear for some time that Amazon and eBay are dominating the paid search space and that has become an opportunity rather than a hindrance.

Amazon, recently topping the $1tn mkt cap valuation accounted for a whopping 44% of US eCommerce sales in 2017 (source: cnbc) and part of their exponential rise to become the worlds top eCommerce store is stocking other businesses products.

The Amazon marketplace has become a behemoth and for eCommerce websites it now represents a perfect opportunity to put their products in front of a massive audience on a site that’s purpose-built for sales.

One of the massive benefits to retailing your portfolio of products on Amazon is that the trust has already been built with the consumer on the sites security, it’s easy to checkout, the delivery rates are clear and all the UX priorities are ticked. All you as a business needs to focus on is new customer acquisition and taking those customers across to your eCommerce website as a returning customer.

How does the Amazon marketplace fit within my marketing strategy?

There are pros and cons to retailing your products on Amazon. They take a high commission rate on sales which means as a business you need to consider the profitability of advertising your portfolio of products through the platform.

The platform is becoming more and more competitive as the marketplace takes on more merchants. This means as a business the optimisation of your products is essential, any Amazon marketplace store needs to factor in a budget for product optimisation; the strategy and implementation will have a big impact on visibility and results and it has to be seen as a project similar to that of search engine optimisation.

If you are a small to medium-sized business that has assessed Amazon and see it as a financially viable route to market then the first thing to do is either soft-launch with your best performing products or begin promoting a subset of your full portfolio from launch to begin gathering data and benchmark against your existing marketing activity to see whether it has a return on investment that will show a long-term benefit.  

How to take advantage of eBays massive eCommerce presence

Setting up an eBay store is another platform that can yield results and help to grow your business. With less commission costs than amazon it is perfect if you are looking to sell in higher volume and lower margin.

Affinity’s product monitoring tools help businesses to determine which products to stock and also what success rate and price they’re likely to yield from their listing. The result means that eBay merchants are relaying to their stock teams what they need to buy in and minimising stock that sits in the warehouse with a low sales rate.

An eBay store needs to fit in with the merchant’s brand and proposition so it may not work for all eCommerce businesses but it’s an excellent way to tap into a new source of traffic and also take advantage of eBays presence within the search marketplace as another result that you can own in the listings.

The overall benefit for you as a business

The success of eBay and Amazon comes from their ease of use to the end user and also the trust they hold as a merchant.

There has always been a resistance point to purchase for a large proportion of online users because of fears around trust and security so as a retailer selling on these platforms that all comes as part of the package.

Looking ahead to 2019 the competition in the marketplace shows no sign of slowing and the presence of both eCommerce sites within the ad space also looks as strong as ever so now is the time to take advantage as the advertising space continues to become flooded with competition.

Written by Matthew Howman, Head of Paid Search