Today, the number of digital buyers is at 2.64 billion – 33.3% of the population worldwide. In the rush to make the most of this opportunity, some merchants find themselves at a crossroads, contemplating sacrificing their brand identity to unlock the convenience marketplaces offer for meeting digital buyers’ needs. Although sales might increase in the short term due to a wide range of products and services, promotional tools, and dynamic pricing, it begs the question: what will the long-term cost be?
Take Harrods, the iconic luxury department store, which celebrates its 175th this year. It will no doubt be planning an enchanting spectacle, curated by its army of employees, rotating displays, captivating shop windows with impeccably dressed mannequins showcasing the pinnacle of haute couture. As a cultural landmark, tourists still flock to London, drawn in by Harrods’ illustrious history, including the Egyptian escalator, the Princess Diana and Dodi Al Fayed memorial, as well as the store’s Royal Warrants. It is a shining example of how brand identity can deliver long-term success, and why this must be nurtured by retailers who want to maintain cutting-edge recognition that withstands the test of time.
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So, what can online retailers learn from Harrods, and how should they apply this to the digital world?
Navigating the digital realm
To reach more customers, many online retailers will turn to digital marketplaces like Amazon or ASOS. These act as a platform connecting multiple sellers directly to online customers. The digital marketplace operator assumes the role of a facilitator, enabling various merchants to display their products on the marketplace website. Here, if your core product range is limited, or doesn’t cover certain categories, a marketplace model may be a suitable option for expanding into the ecommerce sphere.
A traditional marketplace can facilitate convenience, attracting more buyers through the diverse product selection from various sellers. However, you sacrifice brand identity which is often the very thing that customers value. If you’re a football team that wants to expand the sales of its merch and football kits, for example, your brand is everything. And its brand that makes companies like Harrods so successful.
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Maintaining your store front
That said, if your customer base wants a cohesive and curated shopping experience, marketplaces may not be the ideal approach. When we think about curation, branding, and identity, our initial focus revolves around the visual elements such as fonts and colours, and ultimately – being unique.
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By GlobalDataThe term “branding” traces its roots to the Old Norse word ‘brandr,’ meaning “to burn,” originating over 4,000 years ago when livestock was marked for identification – this signified a superior quality. In this context, retailers must carefully weigh up the tradeoffs for their storefront identity, storytelling, and customer base before advancing into oversaturated marketplace platforms to drive their digital growth.
In such cases, dropshipping serves as a viable alternative strategy to marketplaces, whereby a retailer extends their product offerings by selling items they don’t have to physically stock. Think of it as a ‘curated marketplace.’ When a customer places an order, the retailer contacts the supplier and has it shipped directly to the buyer. By thoughtfully selecting products that align with your brand identity and core offerings, you can create a seamless and consistent shopping journey for customers, reinforcing their loyalty in the long term.
What retailers can learn from Harrods
Founded in 1824 by Charles Henry Harrod, an east end grocer and tea merchant, Harrods was opened as a general merchant’s shop for drapes, linens, wickers, and other various goods. Now, it has become one of the most prestigious shops in London, with millions paying visits each year for an authentic experience. Impressively, Harrods’ 175th anniversary milestone also marks 25 years since it launched harrods.com, digitally adapting to meet the demands of the new digital age.
Now, both in Kensington and online, its legendary storefront remains distinctive and sustains its competitive edge by offering customers a diverse product range, the same unique experiences, paired with smooth transactions and an informed customer journey. This is all executed via state-of-the-art operational efficiency, managing suppliers, stock, and order tracking. As such, Harrods offers the best of both worlds – illustrating the dropship curated marketplace model.
Retail alchemy: Dropshipping and SaaS
Indeed, the dropship and curated marketplace model compliments an existing stocked-in range to ensure inventory management becomes more precise, reducing storage costs, and allowing retailers to optimise stock levels exactly in line with consumer demands – delivering an exceptional experience for the digital customer.
For an even more adaptable and lucrative strategy, retailers can harness the power SaaS to seamlessly manage a dropshipping business structure. Specialist SaaS solutions can serve as the golden thread weaved within retail strategies connecting brand identity, curated product offerings and all the benefits of dropshipping. The framework allows retailers to strike a balance: retaining control over their brand while expanding their product range.
It offers flexibility by automating orders and communication between retailers and suppliers and speeding up processes like inventory management, leading to cost-effectiveness and increased profitability. Now, retailers can adapt to market trends and consumer preferences swiftly, ensuring their offerings stay relevant, continue to offer the best-quality experiences for customers. The customer remains central to your retail approach and will stand your retail business above the noise with a distinctive, memorable digital storefront in lights.
About the author: Ed Bradley is Founder & CEO of Virtualstock, a global drop shipping and marketplace SaaS platform.
