Wednesday, November 27th, 2019
In 2019, it is forecasted that total spend for UK online marketplaces will reach a staggering 30.4 billion euros. Over the next five years, it is expected to rise by 15.2 billion euros. This will bring a total increase to 50.1 percent.
In the “Retail Channel Series: UK Online Marketplace Retailing 2019-2024” report by GlobalData, it is suggested that the vast products available on these marketplaces
“extends the risk to most retailers”. Only the retailers that happen to sell through these marketplaces are expected to be protected.
The report also predicted that Amazon and eBay will make up over 90 percent of all money spent at the online marketplace in 2019.
Amazon continues to dominate due to, not only the incredible volume of products available, but its relentless focus on the customer experience as well as innovation.
It continues to become more ubiquitous with its Amazon Prime offerings of video streaming, on-demand delivery, movie ticketing, music streaming, and so much more.
GlobalData’s retail analyst Emily Salter pointed out that their “reputations, huge product ranges, and fulfillment options (in particular Amazon Prime) make them the first port of call for many shoppers.”
Despite the growing trend for sustainability, brand new purchases via online marketplaces significantly eclipse second hand spend, with a growth of 53.9 percent and 29.8 percent respectively.
The spend on second hand products is forecasted to make up less than 20 percent of the total UK online marketplace spend for 2019.
Salter added, “Growth in the second hand market will be driven by sites dedicated to resale – in particular, Depop, which looks and functions like Instagram with an intuitive and attractive app design that appeals to young digital natives.
The presence of unique and often vintage items, lower prices and the concept of social shopping appeal to 16 to 24-year-olds and are alternatives to the ubiquitous model of fast fashion and big brands. Additionally, unlike many online marketplaces, Depop is perceived as a fashion destination, which is a huge contributor to its success.”
According to the report, clothing and footwear is the most popular sector shopped on the marketplaces. This is driven by the ever-changing shopping habits of younger consumers. It is further driven by the presence of marketplaces selling mostly clothing and footwear.
The Rise of User-Generated Content
Online marketplaces are increasingly seeking customer engagement that goes beyond product reviews and user feedback. Using reward schemes and community building on third-party platforms like Instagram have given rise to user-generated content (UGC) as powerful drivers of marketplace traffic.
Although very few retailers can compete with giants like Amazon and eBay, it is still feasible for brick and mortar and online retailers to beef up their online platform by setting the stage for user-generated content. UGC is now playing a critical role as to how customers are engaging with brands. It is also transforming how online marketplaces can reach new customers by providing value and building trust with consumers.
As technology continues to mature, business models evolve, and consumer behavior continues to change, these trends can only create fresh opportunities for fearless businesses.
Topics discussed in this article:
- UK online marketplace