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Harnessing the full potential of online marketplaces

In April 2017, Amazon confirmed mounting speculation that it would be launching its Retail and Marketplace offering in Australia, stating that it would focus on low prices, vast selection, and fast delivery.

Some two years later, and a year and a half after its official launch here, Amazon’s entry appears to have heightened the focus on online marketplaces more broadly and helped spur a fundamental shift in the Australian retail landscape.

Over the period since Amazon’s Australian launch, the number of retailers selling through online marketplaces has accelerated. According to the latest CommBank Retail Insights 8 Report, half of all Australian retailers now sell through online marketplaces, with half of them only having started doing so in the past two years.

Retailers are following the lead of Australian consumers. Today almost every Australian digital shopper uses online marketplaces, accounting for two in every five purchases they make online. eBay is currently the standout favourite, but shoppers tend to frequent multiple marketplaces.

The attraction to online marketplaces is starting to reshape shopping behaviour. While shoppers continue to support retailers’ websites, they are shopping less in-store. The report finds that, as a direct result of using online marketplaces, 29 per cent of digital shoppers made fewer purchases in retailers’ stores in the past year, and 27 per cent made fewer purchases at department stores.

This step-change in the way we shop is fuelling uncertainty for many retailers, and mastery of this relatively new channel remains elusive. Despite a clear majority of retailers expecting consumer spending on marketplaces to increase significantly in coming years, the current consensus is that physical stores, rather than marketplaces, still hold the greatest potential for sales growth.  For many, the impact of marketplaces on margins and the retail industry remains unknown.

Retailers are, rightly, testing and learning across a number of marketplaces to find which ones best meet their objectives. There is a compelling case for them to do so too. Many retailers report success in reaching new customers in Australia, improving their customer database and increasing awareness and trust in their brand.

Critical to retailers’ success when selling on online marketplaces is knowing their customers, understanding how they shop on marketplaces and the reasons they prefer some sites over others. 

This goes beyond understanding how demographics influence shoppers’ preferences. Our report identified four broad segments of online consumers, each shopping on marketplaces differently – those with high demands around shopping online securely, those loyal to their selected brands, shoppers in search of a bargain and impulse shoppers.

With online marketplaces providing unprecedented access to the growing universe of digital shoppers, retailers that truly understand how their target customers interact with the relatively new channel are best placed to harness its potential.

Read the full report at 

This article is published solely for information purposes. As this article has been prepared without considering your objectives, financial situation or needs, you should, before acting on the information in this report, consider its appropriateness to your circumstances and if necessary seek the appropriate professional advice. Any opinions, views, conclusions or recommendations are reasonably held or made, based on the information available at the time of this report’s compilation, but no representation or warranty, either expressed or implied, is made or provided as to the accuracy, reliability or completeness of any statement made in this article. Any opinions, conclusions or recommendations set forth are subject to change without notice. The information in the CommBank Retails Insights 8 Report is based on a survey of 592 decision-makers from small, medium and large retailers across Australia, with turnover ranging from less than $1 million to over $500 million, as well as 1,508 consumers, by ACA Research on behalf of the Commonwealth Bank. Commonwealth Bank of Australia ABN 48 123 123 124, ASFL and Australian credit licence 234945