How to Build a Successful Marketplace using SAP Commerce Cloud
In recent years, marketplaces have emerged as a dynamic new force in e-commerce with the value of sales made in marketplaces set to grow to $8.8 trillion in 2025, when they will account for 24 percent of total online sales, according to consultancy Be | Shaping the Future.
This growing enthusiasm for the marketplace model comes not just from traditional e-commerce companies. OEMs, wholesalers and other types of business are embracing enterprise marketplaces as a way to offer better buying experiences and wider assortments to their trade or retail customers by encouraging their dealers, distributors and suitably qualified sellers to also sell through the marketplace.
The marketplace concept offers numerous advantages. Firstly, it allows businesses to diversify their product and service offerings both vertically and horizontally by introducing new vendors, retailers, and resellers.
By offering a broader range of products, the visibility of the site increases and so too does it attractiveness to customers, many of whom will look there first to find a particular product before consulting more narrowly focussed e-commerce sites. Amazon is clearly the prime example here and it's worth noting that Amazon now generates over five times the revenue from its marketplace platform compared to its retail operations.
Key Benefits of Enterprise Marketplaces
Financial and logistical ease is another key benefit of the marketplace model. Businesses no longer have to limit themselves to selling only what they produce or source from established suppliers. This flexibility reduces capital tied up in procurement and logistics investments, enabling easy net profits by creating an environment where vendors handle their products.
Furthermore, marketplaces encourage price competition among sellers, leading to lower prices and providing cost benefits for customers. The increased number of vendors attracts more people, resulting in higher traffic and improved SEO scores. This heightened popularity contributes to higher conversion rates and, consequently, good commissions for businesses.
By incorporating a «2C» into their existing business model, companies transform into IT, logistics, and governance service providers. This evolution offers a unique opportunity to extend their capabilities and revenue streams.
However, establishing a successful marketplace comes with challenges. Businesses must carefully design their business model, identifying category expansion points and determining the right mix of products and sellers. Assessing risks and break-even points, especially when introducing competition in the same product categories, is crucial.
Choosing the Right Marketplace Platform
The complexity of the IT solution landscape further adds to the challenges. Businesses must select a solution that extends beyond conventional e-commerce systems to include ERP, logistics, and CRM, and specific functionality required by a marketplace.
The selection of a robust marketplace platform is therefore paramount. It should offer a configurable business library applicable to various industries, supporting both B2C and B2B models.
The technology backbone must be reliable and cloud-based, and offer excellent scalability options. Smart, ready-to-use, and extendible connectors are essential for quick integration with existing platforms. Real-time metrics for evaluating supplier performance and robust, reliable, and transparent financial reporting will also be important to the overall success of the marketplace.
For enterprises that already use SAP software, SAP Commerce Cloud, previously known as SAP Hybris, is an obvious candidate for hosting your marketplace, although SAP Commerce Cloud is not dependant on SAP ERP software and so can be used stand-alone.
SAP Commerce Cloud is an enterprise-class e-commerce platform that supports both B2C and B2B models and has been designed to deliver a seamless and personalized customer experience across various channels, including online, mobile, and in-store.
Ease of Integration with SAP
As would be expected, it easily integrates with SAP's ERP systems and its other cloud platforms, including SAP CDP and SAP Emarsys, which is a powerful data platform that collects, cleanses, and centralizes customer and transactional data.
Some of the biggest challenges with creating a successful enterprise marketplace are in areas such as fulfilment and supplier onboarding. The Mirakl Marketplace Connector for SAP Commerce was developed specifically to address these challenges. It makes it easier to integrate and scale a marketplace based on SAP Commerce Cloud by connecting to the Mirakl enterprise marketplace platform.
The Mirakl company started life building online marketplaces for major retailers, such as FNAC or El Corte Inglés. Today, its platform is used by leading enterprises worldwide, including over 50 companies that also use SAP Commerce, to manage their third-party marketplace and dropship businesses.
NTT DATA has developed marketplaces based on SAP Commerce and Mirakl for several enterprises. As a leading systems integrator and SAP Global Strategic Partner, we have considerable experience integrating SAP systems into wider business ecosystems, and we see the Mirakl connector as a particularly interesting option for companies that use SAP and want to launch a marketplace while reducing their upfront technology investment and accelerating time to value. In addition, NTT DATA also provides solutions based on SAP Commerce Cloud alone.
Whatever the chosen platform, NTT DATA can solve the challenges of building and managing a successful marketplace, so helping enterprises embrace the new opportunities offered in the marketplace economy.
Speaker
Tolga Tolan
Deputy Managing Director, Customer Experience Solutions, Turkey & MENA