Ecommerce in North America and the need for Multi Vendor Marketplaces[ inc. infographic]
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Just the enormous size of the North American market and the variation in demography makes it an overwhelming task for businesses and brands to make sense of the customer psyche of this region. The United States of America, Canada, Mexico, and Greenland are often collectively addressed to as the North American Region. In recent years the popularity of the multi vendor marketplaces in North America region is grown rapidly.
With the United States of America being the largest global economy, a population of more than 300 million it is undoubtedly one of the most attractive markets to be tapped within North America.
As the internet penetration keeps on increasing there is a shopping device in almost every hand. Global online marketplaces have spread their wings and local marketplaces are also rising rapidly. Time and location are no more a hindrance or even remotely a deciding factor for any purchase being made at the said moment. Online shopping has brought brands inside the comfort of the customer’s home and shopping has moved way beyond the conventional ways being followed since ages now. The huge online product assortment is an absolute delight for shoppers.
A report stated in its observations that North America can very well be expected to demonstrate a double-digit ecommerce growth through the year 2021 confirming its position as the second most valuable ecommerce region across the world. yStats.com states that innovative advancements in mobiles, voice search enabled shopping options, chatbots will provide ample growth in the U.S. and Canada region, enough to maintain North America’s lead over other areas.
Some share-worthy stats by statista are definitely worth a read:
- Total Revenue in the “eCommerce” market amounted to US$538,883m in 2018.
- Revenue is expected to show a year on year growth rate (CAGR 2018-2022) of 8.6% resulting in a market volume of US$749,415m by the year 2022.
- The market’s largest segment is the “Toys, Hobby & DIY” segment with a market share of US$160,777m in the year 2018.
- User penetration is at 69.7% in 2018 and is expected to touch 72.0% by the year 2022.
- The average revenue per user (ARPU) currently amounts to US$1,560.12.
Canadian ecommerce although experienced a slow start but gradually began pacing up and in no time it was booming. A white paper titled ‘The state of ecommerce in canada_2018’ published by ayima.com states some interesting information about the e-commerce picture in Canada.
1. 47% of Canadians use social media at least once a month for inspiration
2. Laptops and desktops are being used at a much higher rate when completing online purchases.
3. The annual online market could grow from 86% to nine-in-ten internet enabled Canadians in the near future.
4. OTC/health products, groceries, furniture, and alcohol are the least widespread online purchases.
The shift from brick and mortar to online shopping ecommerce platforms
Ecommerce is taking over the world and North American region is no exception. Till a few years back online shopping surge was seen specifically in times of holidays as opposed to today. In the present day online sales are largely taking over the brick and mortar sales but the reverse is not true often.
Deloitte conducted a survey asking U.S consumers how they plan to spend over shopping during the holidays and found that, on average, 51 percent of a customer’s presents budget will contribute towards online purchases.
In the United States, around 10 percent of sales are made on online marketplaces, and the online market experienced a growth of 24 percent over a year, according to Slice, a U.S. market analysis company. The count in Canada is smaller at 7 percent, with an 18-per-cent growth over the span of a year, according to NPD Group, a market-analysis company.
Rapidly growing product assortment of ecommerce marketplaces and the presence of multiple sellers for the same items make online shopping an even more likeable option. The reason to shop online is primarily convenience for the customers and then comes the added advantage of having multiple product variants in online stores.
The rise of Multi Vendor Ecommerce Marketplaces platforms
The rise and popularity of multi seller marketplaces or more commonly referred to as multi vendor marketplaces was inevitable. The customer since long was craving for an improved shopping experience. Multiple sellers, multiple product assortment, several modes of payment all came in a neat package named a multi vendor ecommerce marketplace platform. And it was only obvious that the shopper grabbed the opportunity with both hands.
Multi vendor Marketplaces was not only beneficial for the customer but equally benefitting for the vendor as well. He is now able to showcase his items to a larger audience and is able to sell products better. Dedicated seller profile helps him make clear sense of his performance as compared to multiple sellers selling on the ecommerce marketplaces platform.
A vendor is now able to manage his products with much ease, generate invoices, ship the products with the service provider of his choice and ensure effective last mile delivery. Dedicated vendor profiles on multi vendor marketplaces are allowing the vendors to sell like never before and also evaluate their performance regularly.
What is the need for Multi Vendor marketplaces?
Prior to understanding the need for multi vendor ecommerce marketplaces, it is important to make sense of the concept in itself. A multi vendor marketplace is one that allows multiple sellers to showcase a wide variety of products from different brands on a common platform. The marketplace owner or admin sets a commission rate according to which the sellers are charged for successful orders. The vendors can easily list their products on such ecommerce marketplace platforms and start selling.
Fig: The process flow in a multi vendor marketplace
Nowadays there is a marketplace available for almost every material need. Varying in concepts and the type of products being sold, multi vendor marketplaces are ready to cater to all customer needs. Foodstore marketplaces, booking marketplaces, grocery stores, classifieds, you name it and there would be a marketplace based on that concept.
For the sellers this concept of a marketplace is largely beneficial in terms that it provides a low-risk method of venturing into a new market and gaining business critical insights.
What are the benefits of ecommerce marketplaces?
The benefits of ecommerce marketplaces can be stated from two different perspectives that of the customer and the seller.
1. Multi vendor marketplaces provide a platform for the customers to find a wide variety of products from different brands in one place.
2.In order to improve sales, sellers offer competitive pricing for their products which again works in the favour of customers. This way the customers can rest assured of finding the best offers for the product of their choice.
3.The reviews and ratings on the marketplaces along with the presence of multiple sellers facilitate the buyers in making an informed decision and also compare products for better purchase.
1. Smaller vendors catering to a local market can with the help of multi vendor marketplaces showcase their products to a larger audience.
2. Helps in price and quality standardization between vendors’ products.
Given the promising ecommerce potential and an almost certain year on year growth in the sector multi vendor marketplace is the way to go for sellers and customers alike. Ecommerce marketplaces tend to provide a convenient way for customer vendor engagement. Social proof for vendors’ products in the form of customer testimonials is a very crucial part of these marketplaces.
Considering all that a multi vendor marketplace has instore for the stakeholders, be it the customers, sellers or the admin they ought to be packed with numerous quality features. Only then will it be able to deliver a more than a satisfactory shopping experience.
1CedCommerce offers the required technical solutions tailor-made for building one such platform. CedCommerce’s Magento 2 Marketplace extensions and add-ons are readymade affordable solutions for building a website like Amazon. These extensions come with a bevy of features to aid the development of a rich multi vendor marketplace. A marketplace equipped with these features is ought to have the best functionality.
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