Online marketplaces aren’t just for digital native companies like Amazon, eBay, and Airbnb. Traditional “analog” businesses are using online marketplaces as a pathway to becoming digital businesses.
In Create Enterprise Marketplaces to Accelerate Digital Business, Gartner, the leading research and advisory company, explains: “The enterprise marketplace is a new business model in which organizations change their ways of doing business, create wider ecosystems, develop new capabilities, and generate new sources of revenue.”1
At Mirakl, we’ve supported the launch and scaling of more than 300 enterprise marketplaces, so we know that every business has distinct reasons for exploring the marketplace opportunity. Best Buy Canada, H&M Group (Afound), Toyota Material Handling, and Conforama are just four of the diverse organizations that have recognized the benefits of enterprise marketplaces, and applied them in different ways.
Why marketplace, and why now?
To define your organization’s marketplace strategy, start by identifying the primary reasons that you’re investing in an enterprise marketplace. Gartner talks about three key enterprise marketplace motivations:
1. Improve efficiency and lower costs
Enterprise marketplaces have buyers meet the suppliers on the same platform, and make the information more transparent, thus improving efficiency and lowering costs for purchasing. Sandy Shen & Jason Daigler, Gartner
Mirakl customers like AccorHotels and Satair use the enterprise marketplace model to offer a one-stop shop to their corporate customers. With a marketplace, they streamline the procurement process, so that their customers can find more of the products they need in one place. Furthermore, the model helps their customers achieve cost savings for their business purchases.
2. Grow the business
A key motivation to do digital business is to achieve growth. Enterprise marketplaces help achieve the objective by connecting with more partners to enrich product offerings, connecting physical assets to the digital platform to create new value, and giving access to new channels. Sandy Shen & Jason Daigler, Gartner
Organizations like Best Buy Canada, a Mirakl customer, can use enterprise marketplaces to achieve growth. According to Gartner, “Best Buy Canada increased the assortment by 200% in the first year and achieved 30% growth in online revenue with the launch of marketplace.” With the help of increased product offerings, they’ve become Canada’s leader not just in consumer electronics, but also in categories like luggage and baby gear.
3. Improve customer and partner experience
Enterprise marketplaces serve both partners and end customers, whose roles can be interchangeable in some cases. A better experience helps engage partners and customers, which promotes usage and transaction volume of the marketplace. Sandy Shen & Jason Daigler, Gartner
Toyota Material Handling’s MyToyota Store is a revealing example of how an enterprise marketplace improves the buying experience for customers and partners, without creating channel conflict. Instead of picking up the phone to call local dealers each time they need a new part, Toyota customers can now find the parts they need online – and Toyota’s network of authorized dealers have a new digital sales channel to grow their businesses.
Marketplace technology solutions ensure a strong start for your enterprise marketplace
Making the switch to an enterprise marketplace model can be a significant transition, but there is an entire ecosystem of products and services available to help your business start strong.
One of the most important steps to a successful marketplace launch is to find a marketplace technology solution that meets your organization’s needs. Gartner suggests: “Organizations with existing digital commerce platforms can enable the marketplace model by deploying a marketplace solution on top.”
Buying a marketplace solution, rather than building one, is a wise investment for businesses who are looking to launch a marketplace. A Total Economic Impact analysis by Forrester found that Mirakl delivers 162% ROI within three years, can drive up revenue by $412 million over three years, and increases CX Score by an average of 1.5 basis points.
If you’re a commerce leader within your organization, download the full report, Create Enterprise Marketplaces to Accelerate Digital Business. You’ll find Gartner’s insights on how to develop an enterprise marketplace strategy, and learn how to ensure a strong start for your marketplace.
1 Gartner, Create Enterprise Marketplaces to Accelerate Digital Business, 5 July 2019, Sandy Shen, Jason Daigler