With the current pandemic, the digitisation of business has sped up considerably. Hence, I was asking myself questions about the future of e-commerce. To find out, I interviewed Rob Van Nuenen from Holland. Rob is the CEO and founder of Channable, an automated centralised ad management system operating in the e-commerce space. He talked to us about the future of e-shopping and the new trends observed in terms of searching for information about products.
Many recent studies have been done on e-shopping. The U.S. is far ahead in this space, and Amazon is picking up more and more of the search terms for products. So, the initial search is already done for almost 50 per cent in the US on Amazon.
“This trend isn’t observed yet in Europe, but here we are witnessing a significant shift towards big marketplaces which are a bit more diverse than in the US, but Amazon still gets its fair share.”
European diversity here refers to some big local marketplaces like Rakuten, but the question is “how much do they weigh against Amazon?”
There are several others besides Amazon. In France, there’s Cdiscount or Otto in Germany. I think it really depends on the country. In France, Germany and the UK, Amazon is way bigger than in Benelux or Nordics, for example, where it has just begun taking root.
Growing market share for Amazon and the direct access to products through their search engine may bother Google, and as a result, we might expect a few changes with the current dominance of Google ads.
“I reckon that players like Google are in a bit of a pickle with this because they are missing out on all this traffic at the moment, and Amazon is proving to be a real competitor” Van Nuenen added.
I reckon players like Google are in a bit of a pickle with this situation
At least for product searches, there is a change in dominance, but besides that, Google doesn’t have a real competitor. “For product searches, I believe more people will go directly to marketplaces as they can find any product there for the right price,” Nuenen stated.
Earlier on, people were afraid that Google would actually steal all the clicks for them, but now these clicks are going directly to marketplaces, including Amazon, and replacing one dominance with another.
Yet, is it the end of e-commerce as we know it and what does that mean for small players and small businesses that want to sell things online?
“As a small online retailer, you need to be visible somehow, and these are of course easy access points for you to get known to a large audience,” said Van Nuenen.
There is a love-hate relationship between small businesses and marketplaces
“But I hope it’s not the end of e-commerce as we know it. That would be terrible for our business, and I also don’t think that it will happen,” he added.
“It’s a love-hate relationship that small businesses have with these big corporations because the latter can actually help the former grow. So, they need the smaller ones to actually have products to advertise, and they’ll just make sure that they have the audience to show those products to.
There’s a big difference between ads and selling your products on marketplaces. Of course, ads are based on clicks, and hence there is a cost per click. You need more data to see if a certain amount of clicks actually led to a purchase.
On marketplaces, however, it’s much easier because you just push your products there; as soon as a product is being sold, you pay a commission on top of it to the marketplace. Hence, there’s more certainty that you will not incur any cost if you don’t sell anything.”
On marketplaces, there is no risk of incurring costs if you don’t sell anything
Small businesses should do both, Nuenen advises: “go to marketplaces and use their affiliation type of doing business. But if the budget doesn’t allow you to, then the easier way is to sell on marketplaces.”
If your business decides to build its own e-commerce site, what happens is if you advertise on Google, your name is actually being shown there, which is much better for your brand awareness.
“Whereas on a marketplace, your brand is shown somewhere deep down. But since you will probably sell the same product as other e-shops, you don’t necessarily need to be visible.
Also, with regards to sending the actual products to customers, it could be sent in an Amazon box. So, you don’t even have your own branding there. However, if your aim is to get known, then you should use Google instead,” Rob van Nuenen explained.
There is a vast number of new e-shops coming up every month. This actually over-floods the market a little and makes it much harder to be visible on any channel. But still, I think if you have the right product and an e-shop, it’s definitely worth going for it.
“In the beginning, I would go for marketplaces just because it’s easier, and they can get some traction for my products thanks to their large audience. But if you want to grow further and not depend on one channel or one marketplace, then you will have to diversify.
I should launch my business on marketplaces to start with, generate business, generate revenue and margin, and then as a second stage, create my own e-shop to ensure that I have my own brand presence online,” Van Nuenen declared.
Even though opening an e-shop on standard platforms like Shopify is no longer difficult or costly, Channable’s founder thinks that if a business wishes to connect its warehouse with its e-shop, it’s a much better choice to “go for something other than the standard solution and augment features by creating a customized one.”
It’s hard to predict the future of e-commerce Rob van Nuenen said, but I think this business in five years will have many new channels.
I think the e-commerce business in five years will have many new channels
“One of the things that we see now, for example, is social selling on social media platforms such as Snapchat or Facebook. I believe this will be much more pertinent, while marketplaces will stay where they are and may even grow bigger, and Amazon will grow further too.
Also, search giants like Google will also be thriving, as they cater to the specific needs of consumers. But I would say that although marketplaces will grow bigger, many smaller ones will die out because they won’t be able to compete with big corporations like Amazon.”
Many antitrust efforts have been launched against Google, Amazon and Facebook in the US. Yet, van Nuenen is a bit sceptical on this subject.
“They will all get these fines for which they are already prepared. I don’t think though that a huge scandal will surface. These big companies will survive anyway.”
Channable is a data feed management platform with which one can create and feed ads on diverse marketing channels and marketplaces such as Amazon, eBay or Google with product data directly provided by online retailers.
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