E-commerce platforms are essential for retail brands expansion

It is imperative for companies to change the way they operate and rethink their business model to create ecosystems between their partners and customers. Their survival now depends on it. The digital revolution is shaking up traditional business models and all organizations. It has given rise to the platforming of the economy, with pioneers such as Amazon, Alibaba, Airbnb and Uber. Entering a new era, companies must imperatively change their mode of operation and rethink their business model to create ecosystems between their partners and customers. From now on, their survival depends on it.


Marketplace: between growth and scalability

The explosion of marketplaces around the world testifies to a digital revolution that is well underway. The top 100 marketplaces represent over $1.8 trillion in revenues according to ecom media Web Retailer. In China, Alibaba accounts for 80% of e-commerce and in the United States, Amazon has captured 47% of e-commerce, and this share will likely increase in the aftermath of Covid-19. The online platform model offers scalability, the ability to adapt to higher demand without impacting its level of performance. Now, traditional players must opt for a model that allows them to connect a multitude of professionals with individuals, or individuals with each other, regardless of the interface used.


Turning to "platforming" for survival

Not all brands are yet ready to acknowledge the existence of this tectonic movement, nor are they ready to rethink their model to accept the advent of economic platforming. Even in the world's largest companies, some CXOs (Chief eXperience Officer) still have other priorities and an unfortunately short-sighted vision. Yet marketplaces give companies all the digital agility they need to ensure their long-term survival. Leaders in all industry sectors have realized this and have begun to digitize their partner ecosystem to better serve their customers. Walmart and Carrefour have both launched marketplaces to extend their range and cover all their customers' needs. The H&M Group, for its part, has adopted the platform model under the Afound brand in Europe. Manufacturers and retailers have also launched their own marketplaces: Toyota Material Handling and Satair of the Airbus group are today pioneers of this model. These companies have all had the same awareness: if they do not establish themselves as the reference platform for their market, others will take their place.


First mover advantage

The first marketplaces developed such a varied product catalog that they were able to capture more customers and thus generate more sales. In this market, the first entrants are favored by a "first mover edge", which rewards them for offering the scalability and agility needed to meet their customers' requirements. McKinsey's data illustrates this first mover premium. Compared to followers, first movers can expect to double their revenues. But while the opportunity to be the first entrant is attractive, there is a real urgency to adopt this business model. McKinsey predicts that by 2025, marketplaces will account for more than 30% of the value created by companies. It is in the interest of organizations to move towards "platformization" if they want to succeed in their digital transformation in the long term and ensure their sustainability...

14 views0 comments

Recent Posts

See All