Marketplace, you cannot buy what you cannot see...feast or famine!

Our experts Nils Kernchen and Clive Daley ponder this topic.

Having spent 18 months working with ManoMano and managing the initial incredible growth of the UK platform, I am obviously a fan of the “Marketplace”. Clive remembers sitting just down the corridor from the co-founders Christian and Philippe, in their office a short walk from the Arc de Triomphe that stretched only on one floor with less than 100 team members…..a true start up!

At the Daley Hub we work with brands and businesses with product that has an interesting story to tell, so I am curious as to how marketplaces do, or don’t, help a “new thing” to be launched and deliver strong sales. This has got to be one of the most challenging aspects of this market stall with, in many cases, millions of products. So we pondered on this and got ourselves curious 🧐 (our new KPi - our net curiosity score - thank you Rik Vera)

You can’t buy what you can’t see….Is the “Marketplace” the killer of new product and innovation because you can’t find them in the sea of products? Its not just the sea of products that makes the search hard, but if the “new thing” requires a search term to find it specifically then it really will never be found.

As Daley hub marketplace expert Nils Kernchen calls it “you can’t win the buy box if no one knows you exist, a brilliant product is only as good as its visibility, at ManoMano, we learned this every day. We spoke to a business that had developed a cool value package, a “paint box”, that included brushes, prep tools tarpaulin covers and of course…paint. Appealing to a non-expert DIY’er, this great package made it a no brainer purchase for someone wanting to start from a standing start i.e I have no tools to do the job at all and complete a quick paint job. The problem was that on the marketplace no one was searching for a “paint box”, just for paint, or brushes etc… and because marketplaces are in general a search engine with no hits the algorithms rated the product low and guess what! no sales.  

Two opposing views, both correct! Now this will spark the marketplace specialists to say how more eyes on the page from huge customer acquisition targeting and extended range will allow a “new thing” to be found, and also sure more bricks&motar (with own website curated ranges) retail will argue they deliver stand out much more efficiently either way this is a lovely situation. We have have been reading more and more where two opposing views are essentially, both correct to some degree, as there are valid arguments on both sides.

The weakest link! While marketplace retailing offers incredible reach and convenience, it can present challenges for new product innovation and its' discovery. With a mixture of information overload and difficult discoverability, the wide choice of millions of products makes it incredibly difficult for new or niche products to stand out. Even with sophisticated search algorithms, a new, unestablished product can easily get lost in the noise.  

Clever algorithms (bias)Marketplace algorithms are designed to be optimised for sales and customer satisfaction, which often favours established, high-selling products with lots of reviews. New products without a history can struggle to gain visibility, creating a "chicken or the egg" problem.This can create a situation where best sellers are always the better sellers, this focus whilst fulfilling existing demand, potentially limits exposure to genuinely new and disruptive innovations that consumers don't yet know they need. 

You don’t know what you don’t know? While marketplaces provide some data, direct access to in-depth customer insights can be limited compared to owning your own e-commerce platform. This can hinder a brand's ability to understand specific customer needs and iterate on new products. Take the example of some large retailers in the UK who state that their marketplace sales are not directly shared with the retail buyers for example.

However, there are huge upsides to the marketplace! Low cost of entry Even for the “new thing” the marketplace does deliver massive reach and lower barriers to entry. For many small businesses and startups, marketplaces offer an unparalleled way to reach a global audience without the need for significant investment in their own e-commerce infrastructure. This allows more innovators to test and launch products. Put simply, to hit the ground running quickly the marketplace offers a profitable route to market. Customer Feedback valuable reviews and ratings on marketplaces provide direct feedback from consumers, which can be crucial for iterating on existing products and informing future innovations. The long tail and niche Marketplaces find that they can do exceptionally well with niche product, as curated range retailers will not range them, and I have seen strong sales from this ownership of more niche categories. While marketplaces do favour best-sellers, even their vastness also allows for "long tail" products and niche categories to survive.

Will TikTok save the day? The clear way to reveal the “new thing” is through social media campaigns to promote innovative products that are linked to the e-shop or marketplace, these platforms and emerging trends like social commerce (e.g., TikTok Shop, Instagram Shopping) and AI-powered discovery tools are changing how consumers find products. These platforms are becoming increasingly adept at showing users things they "didn't know they needed," which can be the answer for a new product discovery, our “new thing” Make it visible yourself! Marketplaces are increasingly developing their own retail media networks, allowing brands to pay for increased visibility, which can help new products get noticed. Though this does require a new set of skills for the brand who more and more now needs to behave as the retailer, it can deliver you strong visibility. 

In summary! Marketplace retailing isn't inherently "killing" new innovation, but it certainly presents a complex environment for it. The challenges lie primarily in discoverability and standing out amidst intense competition and algorithm biases. However, the sheer reach and lower barriers to entry also provide opportunities for innovators. 

But remember, with all things product related, you need :-

• to start with a strong story

• the product needs to genuinely offer something new or better

• do it in an interesting way

without these faccets no matter what you do in any form of retail, it will be hard.

If you want to talk everything marketplace get in touch nils@daleyhub.com