Retail Marketplaces: Consumer Trends identified by GlobalData
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Retail Marketplaces: Consumer Trends

By GlobalData Thematic Research 02 Aug 2021 (Last Updated August 2nd, 2021 09:37)

The aspects of personalisation and frictionless shopping on online marketplaces are becoming increasingly important among consumers.

Retail Marketplaces: Consumer Trends
Credits: supparsorn/Shutterstock.com.

The aim of personalisation within retail marketplaces is to ensure stores and online cater to the differing needs of their shopper base and create a unique shopper experience from start to finish. The goal is to reduce the amount of time and hassle involved in the steps between the desire for a product and receiving it.

Consumer Trends

Listed below are the key consumer trends impacting the retail marketplaces theme, as identified by GlobalData.

Fulfilment

Despite several advantages that online retailers/marketplaces have, they are still striving hard to overcome their primary hurdle, the last mile delivery. This has opened a Pandora’s Box that consists of logistical complications, issues with third-party delivery partners, and a range of required data analytics tools to make delivery as efficient as possible.

But for consumers, with respect to a frictionless experience, fulfilment comes down to three core aspects: the cost of delivery, the speed of delivery, and the flexibility of both. While still very much is in trial stages, retailers are exploring automated vehicles, drones, and robots to fulfil orders to meet high consumer expectations.

Payments

One of the most important concerns for online marketplaces is offering frictionless payments to shoppers, allowing for better convenience and speed of completion of the shopping process. For retailers, it lowers the possibility of a purchase being abandoned midway during the payment process.

Global online fashion retailer ASOS has extended its partnership with payments provider Klarna to offer a new payment method. ASOS will offer UK customers the option to pay in three monthly instalments, interest and fee-free. This adds to the existing Pay Later in 30 days option, which was first introduced in 2017.

Maintaining security of transactions and user data remains a prime area of concern that impedes adoption. However, retailers are constantly looking at ways to improve security for all payment processing systems, which involves integrating latest anti-malware, firewalls and real-time monitoring and analytics tools that can detect any anomalies and stop potentially fraudulent transactions immediately.

Shift away from physical formats

The Covid-19 pandemic has put a dent on all physical store formats, especially large stores such as department stores, and accelerated the shift towards online platforms, leading marketplaces/retailers to think about how they can build trust and meaningful engagement without the aid of stores.

Access to a wide range of products/brands along with the ease of home delivery and price comparison options make it more attractive for shoppers to purchase from marketplaces. Consumers have become accustomed to purchasing online and many will not want to go to shops anytime soon and this provides an opportunity as well as poses a challenge for marketplaces and sellers, as they are now required to ensure the availability of sufficient stock to meet the surge in demand.

The delivery options available to consumers have greatly increased over the last decade, with the rise of Amazon Prime and the popularity of next day delivery significantly reducing the requirement of shoppers to visit stores. Similarly, ASOS offers a delivery saver scheme in which customers can pay a one off annual €20 ($22) fee in return for unlimited next day deliveries.

Sustainability

The popularity of vintage and sustainable clothing and footwear products is also growing on marketplaces such as Depop and ASOS. In recent years, there has been a sudden spike in the number of retailers offering sustainable ranges to appeal to millennials. In January 2020, Zalando launched in each of its 17 markets, including the UK, ‘Small Steps. Big Impact. By Zalando’, a sustainable womenswear collection featuring nine Nordic brands.

Amazon is launching a $2bn internal venture capital fund, focused on technology investments to reduce the impact of climate change. The Climate Pledge Fund will invest in companies across a number of industries, including transportation, energy generation, battery storage, manufacturing and food and agriculture, to deal with climate change. The aim is to help Amazon and other companies reach a goal of “net zero” carbon emissions by 2040.

Walmart has also entered into fashion re-sale by establishing an online partnership with thredUP to promote sustainability. thredUP is a resale platform for fashion and accessories sold at mass market prices. Customers can shop from an online assortment of nearly 750,000 pre-owned items across women’s and children’s clothing, accessories, footwear and handbags.

This is an edited extract from the Retail Marketplaces – Thematic Research report produced by GlobalData Thematic Research.

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