Mirakl Rakes in $555M in New Funding as Online Marketplaces Boom


Enterprise marketplace SaaS platform Mirakl, which powers the third-party marketplaces of some of the world’s top retailers, including The Kroger Co.Urban Outfitters and Carrefour, has raised $555 million in a Series E funding. With this new cash infusion the company’s valuation has more than doubled since its $300 million Series D funding round in September 2020, to $3.5 billion.

The rate at which Mirakl is growing is a testament to the explosion of third-party marketplaces in recent years, as traditional retailers take a page out of Amazon’s book in order to expand their online reach. A staggering 47% of all ecommerce sales worldwide in 2020 were made on marketplaces, according to WebRetailer, and Alvarez & Marsal predicts that marketplace sales worldwide will account for $5 trillion by 2025.

“The world has shifted irreversibly toward ecommerce, and the enterprise marketplace model has clearly emerged as the only solution that will enable businesses to survive in a competitive global sales environment,” said Adrien Nussenbaum, Co-CEO and Co-founder of Mirakl in a statement.

With those kinds of numbers, it’s easy to see why traditional retailers want a piece of the action. Just this month, online pet supplier Chewy and supermarket chain Giant Eagle (neither of which are Mirakl clients) both launched new marketplaces on top of their existing ecommerce operations, joining the ranks of retailers that include WalmartTargetSearsAnthropologie and Hudson’s Bay.

Giant Eagle teamed up with product discovery platform RangeMe to expand its product offerings via a third-party marketplace. Chewy has taken a different a different approach, and is using the marketplace model to extend its business into the B2B space with a pharmacy service targeted to veterinarians.

“Giant Eagle Marketplace allows us to extend our aisles and assortments in our established online platform to offer brands and products that previously may not have been qualified or considered for shelf space,” said Kyle Carrabine, Marketplace Business Development at Giant Eagle in a statement. “Marketplace provides us a great way to curate local or regional items while also bringing in trending or emerging categories that many of our customers desire.”

With so much investment happening in the space, it’s no surprise that Mirakl is seeing increased competition as well. Marketplace software solution Marketplacer, based in Australia, is making inroads in the U.S. by beefing up its senior leadership team in the States, and cloud-based ecommerce platform Logicbroker just launched new capabilities to help retailers create their own curated marketplaces.

Mirakl does have a head start though. The company’s founders first launched an online marketplace targeted to the gaming market in 2005 that was acquired by major French retail chain Fnac in 2008, which became the basis Fnac’s own third-party marketplace. In 2012, Mirakl was born, and since that time the company has helped more than 300 B2B and B2C companies build out marketplace capabilities.

Mirakl plans to use its new funding to hire 350 additional engineers in order to extend its end-to-end capabilities, scalability and security; double the size of its customer success division; expand Mirakl Connect, its network of marketplace-ready sellers; and continue to expand its geographic reach. Mirakl’s Series E funding round was led by Silver Lake with participation from long-term investors 83North, Elaia Partners, Felix Capital and Permira.

Originally posted on September 21, 2021, by Nicole Silberstein, Retail TouchPoints

Marketplace platform Mirakl raises $555 million at $3.5 billion valuation

Image Credit: Adrian Sulyok/ Unsplash

French startup Mirakl has closed a new Series E funding round of $555 million. Following this round, the company is now valued at $3.5 billion. Mirakl helps you launch a marketplace on your online store for your end customers or for your B2B clients. It’s a software-as-a-service marketplace, meaning that Mirakl manages the marketplace for you.

Silver Lake is leading the investment, with existing investors 83North, Elaia Partners, Felix Capital, and Permira also participating. With today’s funding round, Mirakl is experiencing a sharp valuation bump as the company closed a $300 million funding round at a $1.5 billion valuation last year.

Some of Mirakl’s clients include ABB, Accor, Airbus Helicopters, Carrefour, Express, Leroy Merlin, The Kroger Co, and Toyota Material Handling.

Chances are you’re already familiar with marketplaces on online stores. If the e-commerce brand doesn’t have the item you’re looking for, they might be recommending some third-party sellers. You can buy the item from this third-party seller directly on the store you’re using. Mirakl helps you add a marketplace to your site.

On some online stores, marketplace transactions have overtaken in-house transactions. It’s a lucrative shift as e-commerce companies don’t own the inventory of third-party sellers. It frees up some capital to increase reach and online sales.

And that trend isn’t limited to consumer-facing online stores. B2B marketplaces are emerging. For instance, car manufacturers rely on many different suppliers. They could all list parts directly on a marketplace so that repair shops can easily find the right part to fix a car.

When you add a marketplace component, you switch from a one-to-many model to a many-to-many model. It means that you have to make sure that you’re taking advantage of your marketplace by partnering with the right third-party sellers. As a third-party seller, it also means that you need to list your products on as many marketplaces as possible.

That’s why the company has also built something called Mirakl Connect. The startup positions itself as a centerpiece of the marketplace ecosystem by connecting online stores with sellers. Mirakl customers can use Mirakl Connect to find third-party sellers. And third-party sellers can more easily list their products on Mirakl-compatible marketplaces.

With today’s funding round, Mirakl plans to increase the size of its engineering team. It’ll add 350 engineers on top of its team of 150 — they will form a team of 500 engineers in total. Similarly, the customer success team will double in size. In other words, things are going well for Mirakl, so let’s invest.

Originally posted on September 21, 2021, by Romain Dillet, TechCrunch

E-commerce tech Mirakl says raises $555 million in funding

Sept 21 (Reuters) – Mirakl said on Tuesday it had raised $555 million in a funding round that valued the tech startup that helps companies set up online marketplaces at more than $3.5 billion.

Paris and Boston-based Mirakl said that more than 300 companies already use its platform and the funding, led by private equity firm Silver Lake, will be used to expand its engineer base, customer support, third-party seller ecosystem, as well as increasing its global footprint.

“Our vision at the beginning was to enable companies to compete against Amazon because we were destroyed by seeing fantastic businesses stand still, watching digital giants come in and play with different rules,” Adrien Nussenbaum, Mirakl’s co-CEO, and co-founder, said in a statement.

Mirakl’s software platform allows companies to sell not just their own brands, but curate and sell others by linking them up, Nussenbaum said, adding that it plugs into most e-commerce platforms like Shopify, commonly used to set up online stores.

“Airbus … has created a marketplace to bring together all the vendors of spare parts and maintenance and maintenance products for their clients,” Nussenbaum said with reference to the European aerospace company.

(Reporting by Jane Lanhee Lee; Editing by Alexander Smith)

Originally posted on September 21, 2021, by Jane Lanhee Lee, Reuters

Parisian unicorn Mirakl to quadruple U.S. team with $555M

Adrien Nussenbaum (pictured) is the co-founder and co-CEO of Mirakl. He started the company with Philippe Corrot, who’s based in France.

Mirakl, a Parisian marketplace platform with dual headquarters in France and Somerville, plans to more than quadruple its U.S. team after raising another late-stage round of finance.

Mirakl raised $555 million in a Series E funding round led by Silver Lake with participation from 83North, Elaia Partners, Felix Capital and Permira. The new funding increased the company’s valuation to more than $3.5 billion.

In an interview ahead of the announcement, co-founder and co-CEO Adrien Nussenbaum said he plans “at minimum to double” the size of the Boston-based team, hiring in key roles such as HR, marketing, customer success and sales operations while also offering flexibility to new hires.

A spokesperson later said the company plans to hire up to 400 employees in the Americas over the next three years with the majority based out of the Davis Square headquarters.

Mirakl, which first established its U.S. presence in 2014, helps organizations launch and grow an enterprise marketplace on their e-commerce sites. The company became a so-called “unicorn” with a $1 billion valuation one year ago. The company’s Davis Square headquarters employs the “vast majority” of its 130-plus U.S. employees, according to a spokesperson.

Demand for Mirakl’s marketplace solutions has been accelerating since the company raised $300 million last year, Nussenbaum said.

“We decided that, given the goals we have in terms of aggressive hires, investment in technology, international expansion, potential acquisitions, it would be the right moment to do this kind of massive round because it tells the market also that this company is here to stay for a very long time,” he said.

Going public is not in Mirakl’s immediate plans, Nussenbaum said, but becoming a publicly traded company would be a natural step to take at some point.

“Would I be proud one day if Mirakl goes public? Yes, I would be very proud,” he said. “It would be great to have an originally French, Boston-established company that really became a global player because it moved to the U.S. and it moved to Boston, and it found great talents.”

Originally posted on September 21, 2021, by Lucia Maffei, Boston Business Journal 

Growth Of Online Luxury Marketplaces Continues In 2021

Luxury online marketplace italist allows shoppers to buy from European boutiques without leaving home.

Online marketplaces are still on the rise with shoppers continuing to look for safer, more convenient ways to shop as the pandemic continues. In fact, data shows that digital, third-party marketplaces are seeing an 81% increase in gross merchandise value year-over-year thus far in 2021.

Why the shift toward online marketplaces? With in-person shopping off the table for much of 2020, digital marketplaces proved valuable for customers looking for new means of product discovery and delivery. These additional touchpoints mean one more way to drive traffic with target audiences. As a result, brands in the luxury space are leaning into the online marketplace movement as well. In fact, Bain & Company projects that as much as one-third of all personal luxury purchases will take place digitally by 2025, with those revenues reaching an estimated $136 billion.

Luxury online marketplaces like italist, for example, are capitalizing on this shifting consumer behavior. By aggregating the inventory of over 250 independent boutiques, italist allows online shoppers to purchase luxury items sold by boutiques in Milan, Florence, and Rome—at Italian retail pricing, which can be 40% lower than global averages—without having to travel.

“COVID-19 has deeply impacted the luxury sector, especially in-person shopping and travel to places like Italy—a destination for luxury shopping. We were already translating that experience into a virtual space, so the pandemic only underscored our mission,” said Diego Abba, italist’s CEO.

Other luxury marketplaces like Farfetch are also seeing an uptick in growth. Serving more than 190 countries and territories, the average Farfetch order in the first quarter of 2021 totaled a remarkable $618, with digital platform GMV growth up 60% year-over-year. Net-A-Porter and Matches Fashion, two other luxury clothing marketplaces, are proving themselves as strategic (and profitable) ways for luxury brands to approach omnichannel retail as well.

If you ask Ricardo Belmar, founder of Retail Razor, luxury brands overall have been slow to adopt eCommerce and sell through marketplaces—but COVID-19 gave them a reason to reconsider. He believes that online marketplaces will continue to thrive in the luxury space.

“The luxury shopping journey will continue to begin and run through digital channels for consumers as it does with other products, so brands and retailers will interact with customers digitally to augment their relationships and grow lifetime customer value long-term,” he said.

However, other eCommerce experts, like Paul Munford of Lean Luxe, believe that online marketplaces should be carefully considered when it comes to Veblen goods.

“Luxury retailers have to consider that third-party, online marketplaces mean having a less direct relationship with consumers,” he said.

For some, the tradeoff of expanded reach to global audiences is worth that risk—especially with recent spikes in COVID-19 cases that could lead to another round of in-store shopping restrictions. One thing is certain: The massive shift to online shopping continues—and online marketplaces are helping foster product discovery and driving sales. The luxury good space is no exception.

“Every retailer needs a strong grasp on marketplace strategies to compete in today’s digital-first economy,” said Adrien Nussenbaum, co-founder and U.S. CEO of Mirakl, a marketplace platform.

McKinsey State of Fashion report data echoes this claim: “In 2021, the COVID-19 pandemic will accelerate industry trends with shopping shifting to digital channels. Well-performing fashion companies share at least one of two key characteristics: Digital strength and an Asia-Pacific focus.”

Originally posted on August 17, 2021, by Kaleigh Moore, Forbes

Finding your place in the new B2B marketplace battle zone

While marketplaces may offer an opportunity to gain market share, B2B sellers should review their readiness for the marketplace model. Magnus Meier of SAP and Angela Troccoli of Mirakl write about six vantage points for analyzing that readiness.

It was the American politician and women’s rights advocate Jeannette Rankin who said, “You can no more win a war than you can win an earthquake.” This line of thought is especially fitting for wholesale distributors that need to face the reality of marketplaces posing an increasingly bigger risk for their business. The tumultuous past year has left distributors grasping for any and all opportunities to maintain business continuity and continue to deliver on customer needs. In addition, Gartner predicts that at least 70% of enterprise marketplaces launched will serve B2B transactions by 2023. The competition to secure a sizeable part of their customers’ share of wallet is just about to get hotter.

“A well-defined approach to marketplaces can help distributors keep B2B buyers at the center stage of their business model, offering a sure-fire way to gain market share.”

So, where does the impending threat of more and more marketplaces battling it out among each other leave wholesale distributors whose lifeblood, to a large extent, still depends on their traditional product-centric business?

2020’s in the Rearview—Now What?

The last 18 months have brought on tremendous shifts in business behavior. As more B2B buyers were forced to work from home, distributors had to rely more heavily on digital sales channels to maintain business continuity, and competition for hard-to-get products came to an all-time high. In fact, between March and June of 2020, the year-over-year average order volume for B2B businesses increased by 79.5%. Even more staggering, between the period of October and December of 2020, it increased by 155%.

During this period, many organizations capitalized on the B2B marketplace boom, seizing the opportunity to bring together an array of third-party sellers to expand assortment and better manage out-of-stocks while reducing carrying costs. Buyers wanted to purchase more products and services through digital means and wanted buying processes that were easier, faster, and cheaper. These distributors successfully rose to the occasion by building and launching B2B marketplaces that could support these evolving customer demands. But there’s a catch. Although it is true that B2B marketplaces are a massive opportunity to increase revenue and customer retention, it may not produce the desired outcome in the long run if it is approached as a one-size-fits-all model.

To Marketplace or Not to Marketplace?

To understand the type of marketplace model that is right for your company, one must think about the bigger picture beyond pure product range extension.  Bill Gurley of Benchmark Capital eloquently warned “great marketplaces do not simply aggregate a market; they enhance it.”

Let’s face it—not all distributors can be the next Amazon B2B marketplace, nor should they try to be. While some may be destined for marketplace greatness, others may decide to become active participants in existing marketplaces, focus solely on being a solid eCommerce player, or settle on maintaining their status as a personalized, value-added services player in the market. But every organization must decide what role they will play in the ecosystem.

Each approach to eCommerce has its risks and opportunities. For those considering becoming a marketplace owner, it is essential to assess your organizational readiness from six vantage points.

  1. Go in with your eyes wide open. Analyze your current profitability model and how it stacks up against peers and new market disruptors. Ask yourself: Is our business model contemporary, and do we have built-in scalability and a harmonized sales process with a clean database from which to execute?
  2. Consider the customer lifecycle—What are the unique needs of our customers today, and how may they change tomorrow? Do we have the tools and resources to create an optimal customer experience that will keep them coming back for more? Do we have the data required to cater to a market-of-one, understanding how we can add value along their customer lifecycle?
  3. Consider the product lifecycle—Do we have the right tools needed to offer the most relevant products and services in our webshop? Do we have the reporting mechanisms required to track what’s working and what’s not across our eCommerce platform and pivot quickly?
  4. Rethink the commercial model—Are breaking bulk or becoming a marketplace operator the only two viable options for us? Should we rethink our sales offerings to develop highly personalized utilization, outcome, or subscription-based business models? How may these new offerings be accepted by our existing or future customers?
  5. Understand the strength of your network—Do we have the proper supplier and manufacturer connections to work as an integrated network across the supply chain? Can we pivot to thinking like a group organization, taking on the role of supply chain orchestrator?
  6. Pivot to market sensing instead of order taking—Can we use data to sense customer and marketwide behavior, thereby gaining the ability to proactively act on things that did not happen or are likely to happen? For example: does the lack of consumption of specific customer rebates and tail-spend loss in certain categories indicate a larger customer flight risk pattern?

When working through these considerations, it is important to remember that for successful distributors a marketplace platform is not—and should not—be tied to a generic Amazon-equivalent business model. Instead, ask how a platform model can help enhance the unique value you provide to customers through partnerships.

The technical capabilities of a marketplace platform can also provide a different set of benefits, such as serving as a headless engagement platform for customers, simplifying back-to-back orders for customer sales representatives, empowering group sales organizations or cooperatives with a unified order platform. A successful marketplace strategy should be tied to your overarching strategic imperatives and fully integrated into the tactical goals and operational realities that are core to your business. For example, if your organization is focused on reducing its carbon footprint, think about how you might recruit sellers that have similar objectives, or how your marketplace might facilitate a circular supply chain.

How Distributors Can Succeed in the Marketplace War

If done right, a well-defined approach to marketplaces and the underlying technology capabilities can help distributors keep B2B buyers at the center stage of their business model, offering a sure-fire way to gain market share. By aggregating demand and enhancing the way they engage buyers in their market, distributors can create value across their entire business network, thereby solidifying their place in the value chain and avoiding the risk of disintermediation.

Success in the marketplace wars can take many forms and depends on the strategy your business organization has defined. But inevitably, winners and losers will be determined by a distributor’s ability to understand and execute business and technical agility based on what is happening next in a continuously evolving market.

Magnus Meier is vice president and global head, Wholesale Distribution Business Unit, at business software provider SAP SE. Since joining SAP in 1998, Meier has served in multiple international positions, including as a consultant in Germany and manager of industry business development teams in Japan. Connect with him on LinkedIn and Twitter.

Angela Troccoli is senior director, product marketing, at Mirakl, a provider of marketplaces services, where she leads B2B marketing initiatives. Prior to Mirakl, Troccoli worked at computer products manufacturer Hewlett-Packard Co. and pharmaceuticals distributor McKesson Corp. Connect with her on LinkedIn.

Originally posted on August 17, 2021, on Digital Commerce 360

5 Misconceptions Distributors Have About E-Commerce Platforms

E-commerce costs too much, won’t make a difference to a distributor’s bottom line, and isn’t worth much more than brand promotion. Right? Not so fast, say SAP’s David Koenig and Mirakl’s Angela Troccoli.

Is there a timeframe for e-commerce implementation? Can distributors get more out of their online presence beyond brand recognition? During a recent MDM webcast, “Myth-busting Common E-Commerce Misconceptions for Wholesale Distribution,” panelists borrowed a page from Discovery’s “MythBusters” show to answer these questions and more — debunking five myths that distributors often believe to be true in regard to implementing e-commerce sites.

The 5 myths

SAP’s David Koenig, global wholesale industry principal, and Mirakl’s Angela Troccoli, senior director product marketing, global B2B, broke down the common beliefs and why they may be wrong.

No. 1: If we haven’t implemented e-commerce by now, it’s too late.

While some distributors may think they are late to the e-commerce game, Troccoli and Koenig said it was much easier to launch an e-commerce site and marketplace platform now than it was 10 years ago.

“I think there are a lot of examples of very large, even innovative companies who tried and had some pretty unsuccessful starts and stops,” Troccoli said. “So, it’s great that you have that to look back on. You can really learn from their mistakes, and then apply them to make your solution better than ever.

“I certainly don’t think that you can just keep waiting. I think we are past the ‘wait and see’ point. It is officially the ‘now or never’ time. People have tried; they’ve failed. They’ve tried again, and they’ve been successful. We can learn from that.”

Koenig said 10 years ago there wasn’t a lot of talent available to build and develop e-commerce sites, but that has changed with the onslaught of DevOps, interface designers and digital transformation talent that specialize in B2B e-commerce.

“It might be a little late to get into the game, but it’s easier than it was,” Koenig said. “Now you’ve got a model. You’ve got resources.”

No. 2: E-commerce is good only for promoting our brand and not much else.

According to an MDM survey that preceded the webcast, the top priorities for distributors implementing e-commerce sites included promoting their brands, increasing efficiency, operational cost savings, improving ease of use and increased customer satisfaction by end users.

Koenig used the example of a healthcare distributor that had partnered with SAP for its e-commerce platform. Device Technologies saved 50,000 hours of administrative time per year by removing repetitive processes to give its staff and customers more time to deal with other issues. Device Technologies also reduced its same-day freight by 9% due to increased planning and control.

“There’s the time savings that happens, which could be stuff that’s not hitting the call center, especially just questions that should have been covered anyways,” he said. “Things like product information, stuff that somebody could definitely self-serve. Making sure that the customer has that information is going to satisfy the customer and it’s going to avoid some of those extra high-touch actions that have a higher cost with them.

“The second part is the reduction in same-day freight. One thing that having an online type of experience can do is provide more insights as to what your customers actually want. You can actually use it as a forecasting tool.”

Having an e-commerce site and marketplace platform drives a better customer experience and bottom line, according to Troccoli. Having a marketplace allows customers to bring on longtail items within hours, while also providing insights into what customers want.

No. 3: E-commerce won’t make a measurable difference in our top line.

Troccoli said an e-commerce site, particularly one with a very large assortment of products, drives organic growth.

“Whether you’re a manufacturer or a wholesale distributor, you’re definitely going to be gaining new customers that you otherwise would probably not be able to reach and there, in and of itself, is top-line growth,” she said. “I think that’s definitely a myth. I think there’s a lot of data that would support e-commerce [top-line growth] — certainly with a marketplace.”

Koenig said having an e-commerce site makes it easier for customers to do business with distributors. This in turn enables top-line growth.

“It’s not just a product catalog that you’re digitizing,” he said. “There’s the ability to transact at the end of that product catalog that is critical as well.”

No. 4: Adding e-commerce costs too much, requires more people than I can afford to hire, and requires too much maintenance to be effective.

Koenig said there is some truth to No. 4 in regard to the initial cost, but distributors could start off small by putting just one segment into an e-commerce site along the way to that first transaction. He said while there are going to be fixed costs associated with implementing shopping carts and checkout functions, SAP has mid-market distributors that are able to stand up a site by just bringing three new people into their IT organizations. Then, bring in a few others from the product information management team to ensure content is web-optimized and ready to be extracted. “I think it can be done,” he said. “It’s not too far of a stretch.”

Troccoli added a caveat to Koenig’s suggestion of starting small: “If you do plan to start small, do it with every intention of going big. Make sure that you are designing it and partnering with a technology partner who is there, ready to scale, because the last thing you want is to invest in an MVP that can’t scale. Once you get the momentum, you’re going to want to grow.”

Myth No. 5: Online marketplaces won’t have an impact on our business, so we don’t need to explore these.

Troccoli said she gets where No. 5 is coming from because marketplaces are often misunderstood. Marketplaces allow distributors to increase the number of products they offer by working with third-party sellers, and to branch out in previously underserved geographic locations.

“Price is not the end-all, be-all to attract customers,” she said. “But if you’re spending all of your time and resources sourcing, vetting, bringing on new products and managing the product data, you’re not really leveraging your time being the expert, and being consultative. That’s why they’re coming to you. It frees up your time to focus on what you do best while still offering everything your customers want, and the experience they want.”

Originally posted on July 29 2021, by Mike Robuck, writer, Modern Distribution Management Research

Why Online Marketplaces are Outpacing Ecommerce in a Post-COVID World

By Adrien Nussenbaum, Co-founder and CEO of Mirakl

Consumer shopping habits have shifted irreversibly towards eCommerce in the past two years. For many, every day has become a holiday as new packages arrive from their favorite online retailers. One surprising aspect of this shift is how retailers have adapted their businesses in response. According to Mirakl’s Enterprise Marketplace Index (“the Index”), while traditional eCommerce sites have experienced sharp growth, online marketplaces have grown at double the eCommerce rate: more than 80% year over year in the fourth quarter of 2020. So what’s driving this growth imbalance? The answer lies in how successfully marketplaces have enlisted the assortments of complementary third-party sellers to respond to customer expectations.

The needs of shoppers swung wildly in 2020 and continued to evolve through 2021. They pursued high-demand products with unforeseen urgency — first in critical categories like personal protective equipment, groceries, and sporting goods, and followed more recently by apparel and beauty products. In the face of this product scarcity, the retailers that could fulfill consumer needs quickly were immediately rewarded. Through marketplaces, retailers were able to respond to this changing demand by increasing product assortments, expanding offers by an average of 32% year over year, according to the Index. As a result, these marketplace operators benefited from an even larger gain of 81% in overall gross merchandise value (GMV).

In addition to attracting new customers with expanded assortments, in the long run, marketplaces also enable retailers to develop longer-term, more satisfying relationships with their existing customers — offering a curated assortment of products and brands at scale, without sacrificing brand DNA. After launching its marketplace, a leading furniture and home decor brand actually saw its eCommerce conversion rate increase. Additionally, the Net Promoter Score (NPS) for marketplace products was equivalent to online orders for its owned assortment — even as overall assortment grew by 32%.

These carefully designed marketplaces take the guesswork out of online shopping, providing customers with a one-stop destination for the right product in every circumstance. According to the Index, retailers with marketplaces saw a 34% year-over-year increase in traffic to their core eCommerce sites in Q4, bolstering their status as shopping destinations, and outpacing even the elevated traffic levels seen across eCommerce.

It is this flexibility and agility that empowers retailers to meet customers where they are — filling the gap created by traditional eCommerce and growing GMV in the process.

Success Through Assortment

Behind the growing assortments lie powerful networks of high-quality, third-party marketplace sellers. Retail leaders nurtured these relationships as a competitive advantage, through intense vetting, seamless catalog integration — presenting a single, unified face to customers — and satisfaction monitoring. As a result, while retailers with marketplace businesses expanded their network of sellers by an average of 46% in the past year, GMV per seller increased by 24%. This concurrent rise in seller count and GMV per seller shows that sellers do not cannibalize each other’s growth. In fact, the Index found that the addition of new high-quality sellers leads to incremental growth for every seller — and including retailers’ owned product offerings.

While legacy retailers struggled to keep core items on their virtual shelves, marketplace pioneers leveraged growing networks of third-party sellers to expand their businesses to new frontiers — and were rewarded for their boldness. For example, one marketplace operator, a leading American apparel retailer, chose to make its platform a destination for discovery, curating new sellers through a marketplace dubbed “Labels we Love.” The rotating assortment of products introduces new brands to the operator’s customers, building out variety in a way that drives traffic and leveraging customer trust to curate a high-value selection.

The distributed networks and wide assortments characteristic of marketplaces also offer invaluable resilience during periods of complex change. Marketplaces diversify the supply chain, distributing unexpected pressures across a network of third-party suppliers. While one node may not be able to meet shifting market trends, the network itself is far more likely to survive by compensating for any weaknesses.

Why Marketplace Momentum Will Only Continue

While this summer has already seen an increase in in-person shopping and entertainment, there is no turning back in terms of permanent consumer expectations: they have been conditioned to expect the availability of any product, anytime and anywhere. As a result, the bar has risen for companies to deliver on their brand promise against accelerated timelines regardless of other behavior shifts in the world around them.

As brands build on the omnichannel strategies they honed over the past 18 months, marketplaces will be essential in boosting customer acquisition and retention across all channels. Beyond the black-and-white sales numbers associated with the introduction of third-party products, attention is a form of currency in today’s digital world, and marketplaces can deliver a halo effect to retailers in the form of increased traffic and customer satisfaction.

The past year in retail provided the most significant proof point to date that consumers vote with their wallets in pursuit of convenience and reliability. And as retailers come to understand and appreciate the need to demonstrate resilience, we can expect more legacy brands to rely on enterprise marketplaces to maintain a sizable, agile and future-proof assortment that will drive consistent revenue growth in the face of change.

Adrien Nussenbaum is co-founder and U.S. CEO of Mirakl, the global leader in online marketplace solutions. Since graduating from HEC Paris in 2001, Adrien’s career has been focused on innovation, entrepreneurship and disruption. His background in corporate finance and management consulting has allowed him to support top Fortune 1000 companies in their strategic growth and transformation initiatives, including creating and leading FNAC’s marketplace from 2008 to 2011. A serial digital entrepreneur, Adrien has always been driven by the desire to invent tomorrow’s economy: All Instant, a NY-based Instant Messaging platform sold in 2003, and SplitGames an online video games marketplace sold to FNAC in 2008. Along with co-founder Philippe Corrot, Adrien has built and led winning teams across the globe, created hundreds of jobs, and generated billions in sales for customers. Outside of the office, Adrien enjoys spending time with his wife and two daughters exploring their new hometown of Cambridge, MA. But don’t think you’ll catch him trading bouillabaisse for New England clam chowder any time soon.

Originally posted on July 21 2021, on Retail TouchPoints 

Largest marketplace sellers account for 88% of GMV

Large marketplace sellers play an essential part on online platforms. They contributed 88 percent of marketplaces’ Gross Merchandise Value during the first quarter of this year. But small and medium-sized sellers are on the rise: they doubled their contribution in that same period and even tripled in the past year.

Small to medium-sized sellers will continue to be a force in the coming years.

That’s one of many conclusions from the 2021 Enterprise Marketplace Seller Report by Mirakl. It examined the activity of 50,000 third-party sellers on more than 70 ecommerce marketplaces worldwide.

36% of sellers joined a marketplace in the last 15 months

One of its top findings is that marketplace momentum is attracting sellers: 36 percent of them joined online marketplaces in just the last fifteen months. Mirakl thinks that small to medium-sized sellers will continue to be a force in the coming years, as retailers look for unique product selections.

“The acceleration of the enterprise marketplace model is expanding opportunities for incumbent retailers and third-party sellers alike to come together and thrive in a highly competitive ecommerce environment”, co-CEO Adrien Nussenbaum says. “In addition to gaining new GMV from each new third-party seller, sellers are key to retailer marketplaces expanding their assortment faster, with greater differentiation, and higher customer satisfaction than through traditional ecommerce models alone.”

Marketplaces can expand fast with third-party sellers.

Mirakl states there are three primary types of sellers on enterprise marketplace, representing three main business models. There’s the marketplace native seller (generating 63 percent of GMD across all marketplaces in the first quarter of this year), the brand seller (20 percent) and the ecommerce retailer (17 percent). “This variety allows retailers to more precisely tune and curate the composition of their marketplaces to better serve the needs of their shoppers.”

47% of sellers cover multiple marketplaces

Another finding from the report is that almost half of all sellers are active on multiple marketplaces. “Cross-marketplace coverage is on the rise, as sellers are seeking – and finding – expansion opportunities by partnering with leading retailers.” These partnerships often happen with different catalogs per marketplaces, as sellers proactively differentiate their assortment to match the needs of each partner.

Third-party sellers are popular among online shoppers.

Third-party sellers are popular among online shoppers. This is shown by the fact that they outperform traditional ecommerce benchmarks when it comes to assortment quality and customer service. These sellers earn a 4.5 out of 5 rating from shoppers, have lower refund rates (50 percent lower than traditional ecommerce) and fewer customer service inquiries per order than first-party sellers.

Originally posted on July 16 2021 by Ecommerce News Europe

Big And Small Businesses Can Work Together To Solve Retail Availability Challenges

By Adrien Nussenbaum, Co-founder and CEO of Mirakl, and Forbes Councils Member

Courtesy of Getty Images

The story of American retail is often framed in terms of David and Goliath. There is arguably no greater example of the “American dream” than a successful small business, a local mom-and-pop store, that serves its loyal customers a unique product line with friendly, personal service. Standing against these small retailers are the big-box chains; journalists have written headlines about Walmart for the past two decades, constantly targeting the retail behemoth’s role in trampling smaller competitors.

As retail has shifted online — particularly given the dramatic growth of e-commerce over the last 18 months — Amazon has supplanted Walmart as the small business boogeyman. In 2015, Wired published an article that examined Amazon’s role in the demise of small bookstores, and the online giant has since expanded into every other retail sector under the sun. From groceries to fashion to gardening equipment, smaller sellers are reevaluating what it means to remain competitive in a retail ecosystem dominated by online shopping.

The rise of e-commerce, overnight shipping, and near-real-time fulfillment has conditioned U.S. consumers to expect any product to be delivered to their door within 24 hours. Forget brand loyalty and customer service — convenience is king. This paradigm shift has caused big and small businesses to reconsider their relationships. The way I see it, with millions of sellers now digitally enabled, only a tiny fraction of businesses can truly rely on their individual online and physical stores to survive. For everyone else, success requires partnerships with other digital channels to bring together the strongest aspects of each brand, audience and online experience.

Challenged to meet the insatiable and ever-changing availability needs of their customers, big and small businesses are using marketplaces to come together and create a result that’s greater than the sum of its parts. We’re seeing this happen firsthand at Mirakl, as our company offers a marketplace platform for retailers.

So, what’s driving this unlikely marriage between niche players and major chains, and what are the potential outcomes?

The Availability Obsession

From Grubhub to DoorDash to Amazon Prime, American consumers have been conditioned to demand products and services on an increasingly condensed timeline. Customers often expect more from their online shopping experiences, raising the stakes for large retailers that are now competing on more than just price and product assortment.

The marketplace model enables these retailers to dramatically expand their SKU count, increasing their ability to meet customer needs at a moment’s notice without assuming the financial and logistical risk of inventory. In this new environment, brand loyalty is becoming a function of how many needs a retailer can address for the customer, and how quickly those solutions arrive at their doorstep.

Opportunity For Curated Expansion At Scale

The marketplace model enables expansion without brand compromise. By opening the door to smaller retailers playing in the same space, large and small companies can establish true mutually beneficial partnerships. This is an opportunity for retailers to grow their business while simultaneously enhancing their brand identity with new product options, while niche sellers gain access to a significantly larger customer base.

The marketplace also offers more opportunities to experiment, as owners can quickly and easily test new product options without taking on the cost or risk associated with buying inventory. A beachwear designer may consider adding chairs and umbrellas to their assortment or a series of popular vacation novels. Then, upon successful customer response, they may expand even further.

Staying Ahead Of Emerging Trends

The past year was dominated by rapidly changing trends and challenges in supply and demand. Whether it was hand sanitizer, flour, or pools and hot tubs, shopping habits shaped by a global pandemic placed unexpected strains on retailers and their supply chains.

With a marketplace, retailers are able to more easily source in-demand products from their sellers. This may aid in ensuring that they’ll be top of mind for customers as the next trend emerges. Furthermore, they can test assumptions around emerging demands and double down on those products that demonstrate proven success.

What Does It Take To Achieve Marketplace Success?

For marketplace operators, particularly large retailers that develop their own marketplaces, I recommend following a few guidelines:

  • Treat the marketplace as an organization-wide priority. The full benefits of a marketplace can only be realized with a business-wide vision and executive sponsorship. Instead of treating the marketplace as a pilot project or limited IT initiative, executive leaders throughout the business must recognize the marketplace as a transformation and embrace the value it can offer from day one.
  • Leverage your marketplace as a tool to accelerate core growth objectives. Successful marketplace operators recognize that this model enables them to remove barriers that stand in the way of growth and profitability. Throughout the implementation, launch and scaling of a marketplace, operators should always ask how they can leverage the model to unlock new growth opportunities.
  • Put change management at the forefront. Enterprise marketplaces require organizations to adopt a new way of thinking. To guide this transition, an executive sponsor should be appointed to help build support from stakeholders throughout the business. The executive sponsor should engage with every level of the company, including meeting with C-suite executives to achieve alignment and accelerate decision-making.

The availability expectation will not be going away any time soon, and I believe the marketplace model can be leveraged to meet the moment. I’m seeing marketplaces growing among business-to-business (B2B) sellers as well. It’s no secret that we are witnessing a make-or-break moment for e-commerce. Companies are now left with one choice: evolve or be left behind.

Originally posted on July 14, on Forbes.