Online marketplaces are the new search engines.
6 min read
Online marketplaces are more than just a place to shop. They have evolved into a unique type of search engine, and from the standpoint of advertising, it has great potential.
It is now common knowledge that the majority of consumers who shop begin their process online, with a search obviously. And, instead of searching for the products on search engines, customers prefer to use online marketplaces. We can easily say that search bars of retail sites are taking the throne of search engines lately. You know what they say about the color orange being the new black, the same goes for the online marketplaces, they are indeed “the new search engines of our age”.
According to the advertising report of Amazon, 74% of consumers begin their product searches on their online marketplace.
Retail marketers are looking for ways to attract more customers to their platforms, as they know that most of the shopping is carried out online and their own sites have the potential to be chosen for the first stop to shop. So they are tailoring their ad experiences to boost conversions and optimizing their digital advertising to create quality returns in order to gain more customers in 2023.
“Online marketplaces are more than just a place to shop. They have evolved into a unique type of search engine, and from the standpoint of advertising, it has great potential.”
GE Capital Retail Bank reports that 81% of retail customers do their research online before making a purchase. It is the process by which the vast majority of retail customers begin their journey. During the past few years, the number of people who actually finish their purchase online has increased too. Digital buyers reached 2.14 billion in 2021. To put it another way, more than one in every four individuals you see are online shoppers. In the United States alone, according to statistics, there are 266.7 million digital consumers as of this year. And, it is expected that more people will continue to shop online. This number is anticipated to reach 291.2 million by 2025, in the U.S.
Why do customers prefer making online purchases & retail sites overall?
Convenience in online shopping, lower prices, free/low cost of shipping, price comparison opportunities, product variations, discounts, reviews, and fast shipping can all be listed as the reasons why consumers prefer to shop online. All these solid points considered, in general, close to four in 10 (37%) U.S. consumers say that their online spending has been increasing more and more.
But how can marketplaces take a profitable part in this opportunity?
The answer is Retail Media. Retail Media Ad platforms bring a massive opportunity for retailers, online sellers & brands to promote their products and increase sales. And, with this interest of online shoppers towards marketplaces, advertising has become an imperative aspect of running a business too. Because it’s all about the customers and attracting them. In the end, that’s why we have advertisements, the customer magnets.
If we look at where people shop mostly today, Amazon occupies the first place. With its own advertising platform and Sponsored Ad formats, Amazon achieves to rank first in many countries around the world. The remaining most popular online retail sites are Walmart.com, Ebay.com, and Target.com, respectively. Today, there are many different reasons why most customers shop from retail sites, such as product pricing, wide product lists, websites being easy to use and navigate, coupons, discounts, and incentives.
Social media platforms engaging e-commerce
Besides retail sites, social media channels like YouTube (61%), Facebook (51%), Instagram (45%), LinkedIn (37%), Twitter (37%), and TikTok (35%) are popularly used and found trustworthy for the consumers’ online product searches and purchases. According to the Consumer Trends Report, 45% of consumers in total are likely to make a product purchase, and 51% follow the brand through Youtube and engage in e-commerce via social media overall.
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Working with Retail Media
If your business is running an online marketplace and you want customers to start their shopping at your place, what you need is to have an effective advertising platform. That’s basically why Retail Media Ads platforms are designed for marketplaces having such demand. At a time when giant companies like Amazon are preferred even more than Google when it comes to shopping, the first question that comes to mind as a marketplace is why not the same success story could be applied to me. In fact, it is not rocket science anymore, you can easily attract more customers to your platform once you have an ad platform where sellers and brands can sell their products through your marketplace and advertise them, creating effective ad campaigns.
Being able to draw customers on and offsite and reaching them through different channels is something on another level and it’s not surprising that marketplaces have become the new search engines. Besides the reasons mentioned earlier in the article, there are valid reasons why people now prefer marketplaces(plus having proper ad infrastructure) over search engines. Sponsored product advertisements in the marketplaces provide customers with a high-quality shopping experience. Instead of getting lost in the search pages among thousands of products, it makes their job much easier by showing the right and appropriate ads at the points that can catch the attention of the customer. You may want to check out one of our previous articles on how Sponsored Product ads help customers like a guide in their shopping. — https://medium.com/gowit/the-ultimate-guide-sponsored-products-70a6d3316928
Moreover, the data issue is something not to mess with considering all the laws and regulations on privacy. Marketplaces using the right Retail Media Advertising platform, gain incredible data management. Managing customer data is invaluable because you need to have that customer data before you can launch personal ads. Once you solve it, there you have the personalized ads, and customer groups you need.
“Working with Retail Media comes to being an expert in having a history of what customers have purchased and their shopping behaviors. For an advertiser, that’s the golden ticket.”
It is the ultimate starting point
Only 38% of customers state that they search for products directly from the brand’s website. In addition to the fact that search engines are outdated for shopping, we see that the rate of customers shopping from brands’ own websites is quite low. Brand loyalty seems to be less important to consumers, as marketplaces are much more likely to be a starting point to research products than a brand’s own website. At this point, it seems more logical and profitable for sellers and brands to list their products in an online marketplace. Plus, with the marketplace they have agreed which has a Retail Media platform as mentioned above, matters such as product advertisements, reaching customers, and making the name of the brand more visible will be all carried out smoothly through Retail Media platforms.
Considering all the data, platforms, and sites preferred by customers for shopping today, we see that online marketplaces are definitely the most popular choice. And, Retail Media is a simple solution for marketplaces, sellers, and brands that have not yet achieved this success but want to take advantage of this opportunity. It is obvious that e-commerce companies that use Retail Media platforms effectively increase their customer traffic day by day. Moreover, reaching customers, obtaining and using their data, and displaying personal advertisements for them has never been safer.
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“2020 Consumer Trends Report — Online Shopping Behavior & Spending Statistics.” Jungle Scout, www.junglescout.com/consumer-trends/.
“Amazon Advertising Report.” Jungle Scout, www.junglescout.com/amazon-advertising-report/.
Marketing Charts. “Where Shoppers Say They Start Their Product Hunt.” Marketing Charts, 22 May 2020, www.marketingcharts.com/industries/retail-and-e-commerce-113138.
“Shoppers Now More Likely to Look for a Product on a Marketplace.” Internet Retailing, 16 Nov. 2021, internetretailing.net/marketplaces/shoppers-now-five-times-more-likely-to-look-for-a-product-on-a-marketplace-than-on-a-brand-website-study-24025/. Accessed 5 Oct. 2022.
“Study: Most Product Searches Begin on Amazon.” Chain Store Age, chainstoreage.com/study-most-product-searches-begin-amazon.
“Where Do US Consumers Begin Their Product Searches?” Insider Intelligence, www.insiderintelligence.com/content/where-do-us-consumers-begin-their-product-searches. Accessed 5 Oct. 2022.