Online marketplace products often not as attractive to shoppers as retailer-owned products because of higher shipping charges, absence of product reviews, lack of merchant details, finds Merchantry study of 12 US marketplace sites

NEW YORK , September 11, 2012 (press release) – eCommerce marketplace technology provider Merchantry today released The Merchantry Report: The State of Online Marketplaces. Merchantry, which expedites the implementation of marketplaces for retailers and media companies, worked with eCommerce consultancy the e-tailing group to study tactics of online marketplaces, leveraging its 15-year mystery shopping track record. While online marketplaces offer additional revenue opportunities for retailers and merchants, the study found that there are many areas to improve upon before retailers can fully realize the benefits of these marketplaces.

Twelve sites were extensively reviewed and evaluated based on search functionality, comparable merchandising tactics from marketplace to retail, product information and customer service. Researchers placed orders with each marketplace and conducted queries via all available communication channels. The results demonstrate that online retailers face challenges offering their marketplace shoppers the same level of product detail, transparency and logistical support online shoppers have come to expect and rely on.

“Profit-maximizing practices that have become standard in the eCommerce industry are not consistently applied on marketplaces, where we found incomplete product information, limited functionality and inadequate customer experiences,” said Lauren Freedman, president of the e-tailing group, which issues the EG100 annual eCommerce mystery shopping survey of 100 online retailers. “Details are ultimately what matter to shoppers. Given our findings, online marketplace shoppers would face many disappointments on the path to purchase; marketplaces have to better capitalize on selling and service fundamentals to retain shoppers.”

Sites surveyed for The Merchantry Report were Amazon, Barnes & Noble, Best Buy, Buy.com, Kohl’s, Newegg.com, OneStopPlus.com, Overstock.com, Sears, ShopNBC, TigerDirect and Walmart. Researchers evaluated product listings, pricing, social media, customer service, shipping and return processes. Key findings of the report include the following:

Marketplace products are not extended the same functionality as retailer-owned products.

  • Only 39 percent of marketplace products could be added to a wish list versus 83 percent of retailer-owned products.
  • Gift registry functionality was available on just half of marketplace products.
  • Retailers that provide free shipping extend the offer to marketplace products only 33 percent of the time.
  • While the majority of eCommerce sites incorporate social media tools, the majority of online marketplace products do not have social media functionality.
Marketplace product information is often incomplete.
  • Only 50 percent of marketplace product listings state seller/merchant details.
  • Less than half of marketplace products feature customer ratings.
  • Only 20 percent of product pages have enhanced guides or videos.
Logistics are inconsistent for marketplace products as compared to retailer-owned products.
  • Out-of-stock inventory notifications are universal but processing times are not often shown.
  • The average time for customers to receive marketplace orders was high (4.57 days) – more than one day longer than the industry average (as reported by the e-tailing group).
  • Conducting marketplace product returns is more difficult as not all merchants include complete information (e.g., how to return, to whom to return).
  • Cross-channel services are not in place for pick-up or returns for online marketplace shoppers.
  • Email responses were incomplete or they redirected customers to the marketplace sellers/manufacturers more than half the time (55 percent).
“The results of the report highlight that a mix of business, operational and technical factors must be considered when building and establishing online marketplaces,” said Tommaso Trionfi, CEO of Merchantry. “A number of the existing operational and technical challenges could be alleviated by implementing a marketplace platform.”

Online marketplaces offer additional revenue opportunities for retailers and merchants. Retailers can easily expand product selection while merchants achieve broader distribution. According to Forrester analyst Sucharita Mulpuru in the May 2012 report Why Every Retailer Needs an Online Marketplace, “Technical execution [of marketplaces] is easier than ever. The technology investment for those retailers that want to build an online marketplace should not be underestimated but while in the past there has not been a plug-and-play solution for marketplace owners, companies like Merchantry provide this service and enable a relatively easy execution.”

Merchantry, originally founded in 2004 as Ixtens, built the catalog management technology behind some of the world’s largest online retailers. Leveraging its core competencies in catalog management and multi-channel distribution, in-depth understanding of eCommerce retail and experience with Amazon and other retail clients, Merchantry developed the first enterprise-class SaaS marketplace platform. The company now enables retailers, media companies and merchants to generate new revenue streams – retailers can expand product assortment without investing in inventory, while publishers are able to further monetize content – ultimately providing online shoppers with a more diverse or curated product selection and greater convenience. Merchantry’s streamlined merchant onboarding and flexible multi-channel management gives clients the agility to capitalize on new opportunities such as mobile, flash sales and international eCommerce. Interested retailers, merchants and media companies can visit http://www.merchantry.com for more information.

A webinar discussing the report and its results will be held on September 19, 2012. To register, visit merchantry.com/resources/webinars. To access full report details, visit merchantry.com/the-merchantry-report.

About Merchantry

Merchantry provides an eCommerce software-as-a-service (SaaS) solution that empowers retailers and media organizations to generate new revenue streams by building online marketplaces. Its extensible technology infrastructure coupled with its streamlined merchant onboarding enables expedited implementation of marketplaces. By offering product inventory supplied by third-party merchants, revenue is increased, while investment and risk is minimized. Merchantry delivers market-leading capabilities for some of the largest retail and media brands in North America and Europe. The company is headquartered in New York and has a regional office in London. For more information, visit http://www.merchantry.com.

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.