February 4, 2022
How to Optimise your Brand Performance in Online Fashion Marketplaces
Fashion marketplaces have been growing at a rapid pace even before the Covid-19 pandemic, led by the likes of Asos and Farfetch. Once lockdowns and social distancing became the new norm, the convenience of online shopping culminated in the rise of marketplaces, which are now more profitable than ever. Marketplaces saw gross merchandise value increase by 81% YoY in 2021.
Even the luxury segment, which had been notoriously slow to embrace digitisation could not ignore the importance of online fashion marketplaces in diversifying stock allocation.
It’s safe to say that consumers’ shopping habits have changed after two years of living in a pandemic. With the future still uncertain, the best way for brands to safeguard themselves against any physical barriers is to increase their online presence and omnichannel capabilities. And the fastest way to achieve this is by penetrating online fashion marketplaces.
Aside from diversifying your distribution channels, marketplaces offer you a chance to tap into a larger audience and expand your reach.
There are plenty of marketplaces that cater to different consumer segments online.The key to successfully penetrating marketplaces is to choose one that fits your brand positioning.
However, it doesn’t stop there. To be successful on a multilabel platform, brands have to continuously and regularly monitor both their strategies and their competitors’ to differentiate themselves from the competition.
Common Mistakes Brands Make on Online Fashion Marketplaces
Online fashion marketplaces can accelerate brands’ growth, but only if the brands themselves allocate sufficient time, resources and effort into their operations. Brands should approach a marketplace as a store on its own, with dedicated teams in charge of the online segment.
Here are the four most common mistakes brands make on marketplaces that you should avoid.
#1 Not Doing Enough Research
It can be tempting to choose a marketplace based on its popularity without assessing if it will be a good fit for a brand. The reality is, fashion marketplaces are saturated with hundreds of brands and gaining visibility is even more difficult when the demographics are different than your own target audience.
Before listing on a marketplace, you need to conduct thorough research to understand the retail landscape. This means analysing all the brands currently listed on the site to identify your main competitors. Once you have identified the key players on a marketplace, you can dive deeper into their trade performance to see where you stand and what you are up against. With this holistic view, you can then consider how each marketplace fits into your overall strategy.
#2 Failing to Understand the Pricing Structure
Brands that sell on fashion marketplaces and on their own retail channels simultaneously have fallen victim to price discrepancy, which is the fastest way to deter customers from buying your products.
Marketplaces charge commission fees to brands that sell on their platform. Some of the fees commonly incurred by marketplaces include:
- Membership fees: Charges for additional benefits or features on the marketplace.
- Listing fees: Some marketplaces will charge sellers for listing items even if the items don’t sell.
- Commission fees: When sellers make a sale, the marketplace takes a percentage of that sale as commission.
- Transaction fees: Some marketplaces charge sellers for payment gateway fees during transactions.
- Fulfilment service fees: If sellers partner with the marketplace’s fulfilment party, they will be charged for inventory management, order fulfilment and shipping.
As this adds costs, some brands have increased the prices of their products to compensate. However, this just means that products in the brand’s own store are cheaper than on a marketplace. Consumers today are savvy and can spot price discrepancies instantly, which may create distrust towards your brand. Thus, getting well-versed with the marketplace’s pricing structure is a must before deciding to list on the multilabel platform.
#3 Rushing Product Listings
Rushing product listings on massive online platforms is a recipe for disaster. As you are competing with hundreds of other brands, you have to ensure that your product listings are as detailed as possible to attract customers.
Many brands forego this aspect and have incomplete product descriptions with generic details. As a seller on a marketplace, your products are displayed exactly the same as all other brands - which means that your only opportunity to stand out is with clear product name and robust descriptions.
Optimise your listing by including as many relevant keywords as possible for all the attributes of your products. This way, your brand will become more visible to customers who are searching for products with specific attributes.
#4 Failing to Manage Inventory
Inventory management is key to successful selling on marketplaces. But many brands - especially new sellers get it wrong. In some cases, brands perform well from the get go, selling a lot of products but they run out of stock quickly. Once too many of your products sell out at the same time, it affects your online performance as inactive listings will get taken offline, which deteriorates your SEO ranking and visibility.
On the other hand, some brands have overestimated their online sales and allocated too much of their inventory to one channel. If that marketplace charges you for listing products regardless of whether or not they sell, you’ll end up paying high costs for dead stock.
This is why access to complete and real-time information on how products are performing is essential - especially if you are selling on multiple platforms. Insights on brand performance not only allows you to understand the current demand but also helps you monitor your inventory.
How to Optimise Brand Performance in Online Fashion Marketplaces
#1 Conduct Regular Analysis & Reporting
In a fast-paced digital landscape - speed and agility is everything. Trends and consumer behaviour can change on a dime, which affects product sales. On huge platforms like online fashion marketplaces, the only way for brands to stay ahead is by keeping close tabs on both their own performance and their competitors’.
But how do you know what’s selling on a marketplace? By using fashion data analytics tool.
Monitoring Own Brand Performance
One of the benefits of selling on marketplaces is brands can tailor assortments to different platforms according to the demand. For example, you would list fashion apparel on Asos but focus on activewear and footwear for JD Sports. A fashion market insights tool like Omnilytics provides complete visibility on your product performance and surfaces the data in easy-to-read charts to simplify the analysis process.
Using Omnilytics dashboard, you can identify bestsellers, slow-movers and performing price ranges in any online platform. With this information, you can quickly make adjustments such as replenishing bestsellers or running tactical promotions on slow-movers using the most successful mechanics.
Regular monitoring of your trade performance allows you to optimise your assortment methodically and protect your margins at the same time by managing a healthy inventory level.
Monitoring Competitor’s Performance
By keeping tabs on competitors’ trade performance, brands can have a quick understanding of their competitors' business and positioning in the market. It also acts as a benchmark for brands to compare to and spot opportunities while identifying what is currently in demand. As retail has transitioned into a consumer-driven business faster than ever, determining the right assortment is of strategic importance for brands looking to fully optimise their performance in marketplaces.
Brands on marketplaces carry different assortments but are selling to the same customers. You can observe how your competitors’ products are moving to validate trends - whether it’s a new product category, colours or patterns. As there are so many sellers on a marketplace, it’s best to narrow down your analysis to just your direct competitors - brands that are offering similar assortments and prices as you.
Pricing right and discounting tactically can also help brands win more customers on marketplaces. This is where analysing your competitors’ strategies can help you price match and launch promotions at the right time.
Monitoring your competitors has never been easier with fashion market insights. Typically, brands would have to manually conduct physical comp shopping or analyse their competitors online, page by page to understand what they are offering without having the visibility of how they are performing.
A fashion analytics tool offers brands full visibility into competitors’ product performance, with clear insights into market trends and competitors are responding. With more information at their fingertips, brands can plan their assortments based on what works for their competitors, be proactive to spot gaps and respond quickly to any market changes.
Find out how to conduct efficient competitor analysis here.
We’ve also outlined proactive pricing strategies and best practices backed by the Omnilytics dashboard to help you stay ahead of the competition! Click here for the full breakdown.
#2 Find Gaps & Leverage on Trends
Building a best-selling assortment that resonates with consumers on marketplaces is all about keeping a close eye on demand. By performing regular competitor analysis, brands can:
- Understand competitors’ assortment offerings across markets
- Bridge the gap between own brand and competitors
- Identify opportunities to maximise full price sales
Here’s how to spot assortment gaps and opportunities in the market.
Assortment Gaps & Trends
Assortment gaps are essentially a white space in your competitors’ product offerings. When performing your competitor analysis, you want to look at sell-out performances and weigh them against the number of SKUs available on the marketplace. For instance, if crop tops are selling well but have limited availability on the platform, there is a gap that your brand can capitalise on.
Alternatively, you can keep a close eye on trends by regularly conducting performance analysis.. If there are many SKUs of a trend but it still produces high sell-out rates, it means that the demand for that style is strong. Brands that are preparing to launch trending products on a marketplace can validate demand this way.
Learn how to validate trend forecasts to unveil true demand here.
Incorporating commercial trends into your products is the recipe for success, and that includes current trending colours. Learn how to work Pantone’s colour of the year for 2022, “Very Peri” into your assortment in this article.
Getting price right is crucial to optimise marketplace performance. As marketplaces typically charge commission, it can be tempting to mark up prices to cover costs. But creating price discrepancies in your products will only drive your customers to choose the cheaper option, rather than the most convenient.
Instead of marking up product prices, brands have to understand consumers’ perceived value and their competitors’ pricing strategies to find a suitable middle ground. By studying your competitors’ pricing and their sell-out rates, you can also identify the white space opportunities in the marketplace for you to leverage on. At the same time, you can better understand consumers’ perceived value for products with specific styles or attributes.
Discounting or Promotional Opportunities
The idea of discounting puts off brands because it can eat into profits. However, markdowns are sometimes inevitable – and successful brands use promotions as a tool to boost sales for slower-moving items and keep inventories in check. Brands can drive sales while still protecting their margins with tactical discounting.
Identifying the optimum discount range for each category and subcategory by benchmarking against competitor’s discounting strategy helps you to understand the market demand towards the discount offered. With Omnilytics’ dashboard, you can gather these insights to guide you in your own discounting strategy activation to drive strong sales conversion while maintaining your competitiveness in the market.
Knowing how much to discount is one thing - you also have to know what products to put on markdown before demand plummets and the right time to do so. Marketplaces also have their own promotional plan that you can participate in. As these promotions tend to be site-wide, brands can leverage on the increased traffic and gain more visibility.
Dive into how to ace promotions on online marketplaces in this article.
With many events awaiting us in 2022, brands have to be proactive and prepare ahead of time. Read our article on key e-commerce events in 2022 to download the retail calendar and learn how to prepare for every marketplace activity.
#3 Have Good Availability
Estimating how much stock to allocate to a marketplace can be difficult, especially if you are a new seller. Without sell-out data to validate demand, sellers are prone to understocking or overstocking. The margin for error is even bigger if you are selling on multiple marketplaces as you have to accurately gauge how much to stock on different platforms with varying customer profiles and preferences.
This is where having complete market data is crucial - so you never run out of products or miss out on opportunities to sell more. Insights on trade performance and ageing analysis not only help you to identify bestsellers but also slow-movers that you should immediately act upon.
Part of optimising the inventory for marketplaces is to have a good mix of sizes according to the demand on a specific site. Too often, brands run out of popular sizes because they miscalculated on which sizes would sell more - missing out on crucial sales.
Conducting sizing analysis helps you to ensure the demand for your core sizes are met. To avoid missing out on sales opportunities and investing in risky sizes, you need to identify the right sizing ratio by comparing the contribution of stocked sizes with the sell-out rates down to the subcategory level. Brands that can accurately allocate sufficient stock for every size on marketplaces can avoid broken sizes, especially for their bestsellers.
#4 Improve Discoverability with SEO and Taxonomy
Having the right assortment, prices and promotions are a good starting point on marketplaces. But one way to take your brand further is by improving discoverability, search engine optimisation (SEO) and taxonomy.
The online fashion landscape is full of competition with countless brands offering similar products. It doesn’t help that many brands have poor product descriptions and generic terms for their product attributes. While discounts may entice customers to buy, ultimately they will end up purchasing the product that has the specific attributes they are looking for.
How can you optimise your product visibility in this case? By being as detailed as possible in the product title and description - listing out unique and specific attributes. It’s also important to note that some keywords are more popular than others, which is why brands must perform research to identify the top keywords and improve their SEO rankings.
Omnilytics’ fashion taxonomy, an attribute tagging feature, provides enriched data to help improve product performance, increase conversions and greater personalisation. Taxonomy enables you to go granular and accurately attribute products, which can then be used to improve marketplace visibility.
Head to this article to learn how improved attribute tagging helps retailers build an in-demand assortment.
Brands can use detailed tagging of categories and attributes to build a well-structured product hierarchy. This creates an easier navigation process for your customers and leads them straight to the products they want, which makes them more likely to purchase.
Omnilytics’ taxonomy also provides greater personalisation to customers shopping online. If the product your customer wants is unavailable, they will get recommendations of products with similar attributes. Not only does taxonomy increase conversions, but it also creates upselling opportunities.
What to Consider Before Selling on an Online Fashion Marketplace
The importance of performing an in-depth market analysis before penetrating a marketplace cannot be overstated. Brands must adopt a localised approach when expanding into a new market to tailor their brand offerings to the demand.
We compiled the three areas brands must consider before selling on a marketplace, which are product assortment, pricing and global competition. By analysing these three things, brands will be able to differentiate themselves from their competition and identify gaps and opportunities that they can fulfil.
The Omnilytcs dashboard allows you to gather in-depth market information and validate local consumer demand in no time.
Find out how to strategise for successful market expansion in four steps here.
Brand Optimisation Templates
With the right tools and methods, the process of optimising your marketplace performance is straightforward. This is why we have compiled a list of templates for you to download and start your competitor analysis.
This analysis template will help you get all the information you need from the Omnilytics dashboard to optimise your assortments.
Brands that sell on online fashion marketplaces have the opportunity to expand their business by increasing brand awareness and establishing a strong sales channel. However, the stiff competition from hundreds of other brands can make it difficult for brands to stand out.
With the right analytics tool and a step-by-step guide to yield the right data for your analysis, you too can spot opportunities and optimise your brand performance on marketplaces.