For the fiscal first quarter ended April 28, the apparel retailer posted total net revenue of $309.6 million. That compares with $303.7 million in the first quarter of 2022, a 1.9% gain. Net loss was $1.7 million, which compared with a Q1 2022 net loss of $2.4 million.

Lands’ End ecommerce

Ecommerce, which Lands’ End launched in the late 1990s and far ahead of many other apparel and mass merchandise retailers, also remained flat in the U.S. and declined overseas.

For the quarter, global Lands’ End ecommerce net revenue was $203.1 million. That’s a decrease of 7.3% from $219.1 million in the first quarter of fiscal 2022. Compared to the first quarter of fiscal 2022, U.S. ecommerce net revenue increased 1.6% to $177.7 million from $174.9 million.

Lands’ End U.S. ecommerce accounted for 57.4% of all sales compared with 57.6% in the first quarter of 2022.

Our U.S. ecommerce, which represents our largest go-to market segment, saw a sales increase of 2% from the first quarter of 2022, driven by targeted promotions within swim and adjacent product categories, interim chief financial officer Bernie McCracken told analysts on the Lands’ End Q1 earnings call.

“Our Europe ecommerce business in the quarter was down 29%, reflecting the continued lower levels of consumer demand in Europe,” McCracken said.

Lands’ End B2B sales

Lands’ End does not break out its B2B ecommerce numbers, but overall business-to-business sales in Q1 from its Outfitters unit was $74.0 million. That’s a 37.1% increase from $54.0 million in the first quarter of fiscal 2022.

“We continue to roll out our strategic initiatives and expect that the learnings from each successive quarter will enable further refinement,” said CEO Andrew McLean.

In the wake of weak ecommerce sales growth, Lands’ End is bringing in a new senior executive to change up operations. The company in April hired Stuart Hogue as Lands’ End’s senior vice president of U.S. ecommerce. Most recently, Hogue served as a senior advisor for McKinsey & Co. Prior to that, Hogue worked for 15 years at Nike. Most recently, he was vice president and general manager of Foot Locker, according to his LinkedIn profile.

“Stuart is a digitally savvy leader with more than 20 years of industry experience,” McLean told analysts. “He enjoyed a successful career at Nike and joined us from McKinsey, where he advised clients on digital, omnichannel retail, and marketing transformation initiatives.”

Lands’ End is No. 79 in the Top 1000. The database is Digital Commerce 360’s ranking of the largest North American online retailers by web sales.

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The service, known as Adaptive Checkout, offers biweekly and monthly payment options for purchases of more than $50 with annual percentage rates starting at zero, according to a June 7 statement. Millions of customers using Amazon.com and the Amazon mobile app already have access to the pay-over-time service, the companies said. Amazon Pay is the retailer’s payment service available to consumers on other ecommerce websites. Shoppers can use their Amazon accounts, with payment and shipping information, to shop on other websites.

More retailers are adding buy-now-pay-later services every year, and as of June 2023, 54.4% of Digital Commerce 360’s ranking of the Top 1000 online retailers offer some version of this payment type. That’s up from 45.8% of Top 1000 retailers in 2022 and 28.2% in 2020. Amazon first added Affirm in 2021. For comparison, BNPL is more common among retailers who also offer Amazon Pay, at 68.2%.

17.3% of retailers in the Top 1000 offer Amazon Pay.

The buy-now-pay-later option can increase sales and customer loyalty, and attract new customers, San Francisco-based Affirm said. The mattress-and-bedding company Casper and water-filter supplier USA Berkey Filters have already integrated Affirm’s offering within their use of Amazon Pay, according to the statement.

“Customers want more choice and flexibility when paying online,” Affirm president Libor Michalek said in the statement.

Amazon is No. 1 in the Top 1000. The database ranks North American web merchants by sales. Amazon is also No. 3 in the Digital Commerce 360 Online Marketplaces database, which ranks the 100 largest global marketplaces.

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Someone has to pay. Often, it’s merchants. Within the Digital Commerce 360 Top 1000, 77.2% of retailers offer free shipping in some capacity, such as with a minimum purchase.

The reason for this is simple: Retailers are eager to please shoppers who appreciate “free” shipping.

But during the pandemic and subsequent supply-chain crisis, retailers learned anew just how expensive it can be to offer free shipping. Fuel costs rose, while warehousing space and delivery drivers grew harder to find.

In times like these, wise merchants look to cut the cost of shipping. The question, of course, is how best to do so. Should a retailer outsource shipping to a third party or marketplace? Or does keeping shipping in-house have advantages of its own? Can changing shipping schedules or packaging types make a difference? Is there room to negotiate with carriers?

Logistics expertise

One way to answer those questions is to hire an expert in logistics. That’s what Steeped Coffee did.

Wade Wickus joined the California-based retailer as vice president of operations in July 2022. Steeped sells coffee in “single-serving brew bags” similar to tea bags.

When Wickus came on board, the retailer was doing its own fulfillment out of its manufacturing facility. That had worked well enough during the earlier years when Steeped Coffee was a start-up with a direct-to-consumer site. But by 2022, the merchant was also running a wholesale business with customers including Whole Foods and Target Corp., had launched a business-to-business service for Airbnb hosts and other hospitality providers, operated a store on the Amazon marketplace, and was still running a direct-to-consumer business through Shopify.

That made for a complicated mix of shipping needs. But regardless of complexity or customer mix, the path to cost savings is generally the same, according to Wickus, who offers advice about retail logistics on his Supply Chain Secret Sauce podcast.

The place to start, he says in an interview with Digital Commerce 360, is the basics.

“One thing that I would look at is the box — the shipping box that you’re sending it out in as well as the packaging of the product,” Wickus says. “So if you can trim down DIM, that will help pricing strategy.”

DIM weight is the dimensional weight of a package, which measures the amount of space a package takes up in relation to its weight.

UPS, FedEx and the U.S. Postal Service all compare DIM weight and actual weight of a package and then charge retailers whichever is more expensive. So packing a box as efficiently as possible with lightweight materials and without extra space will generally cut shipping costs.

To cut shipping costs, ask for what you need

But it’s not quite that simple because carrier rates vary across regions.

“Optimizing the box is the first thing, and then once you have that, you have to optimize your rates,” Wickus says. “You have to get with your carrier and make sure your rates are aligned with your weights, because usually rates are set for certain zones and certain services and a certain way of shipping.”

Merchants with significant volume can optimize rates by taking advantage of “zone skipping.”

Zone skipping is when a retailer allows a trucking company to hold its packages until there are enough boxes heading to the same area of the country to fill a truckload. That truck then travels the long distance, for example, from California to Philadelphia, bypassing the regional sorting centers of carriers like UPS. When the truck reaches its destination “zone,” the packages are only then unloaded and sorted for last-mile delivery. The result is a lower cost-per-package to ship.

Wickus declined to say what percentage of his packages are sent through zone skipping or how much his company saves in costs by doing so. But he urges all retailers to talk with carriers about the options that are available.

Talk through pricing

In fact, Wickus says talking with carriers is often the easiest way to lower shipping costs. For example, major carriers including DHL, UPS and FedEx offer discount prices for ecommerce shipments. But not every clerk at every shipper is eager to offer discounts.

“You have to be sure to ask for those ecommerce rates because they don’t often just give them to you,” he says.

Similarly, retail shippers often don’t notice price discounts from USPS.

In May, the postal service opened its USPS Connect eCommerce service to merchants across the U.S. (The service had previously been part of a test that was available only to merchants in Texas.)

“That can reduce expenses for a lot of folks, but if you don’t ask to be part of USPS Connect, you won’t get those discounts,” Wickus says.

The clock is ticking

Another basic area of logistics where savings can be found is in the warehouse itself.

Automakers saved on logistics expenses in the 1970s using just-in-time manufacturing principles that sought to reduce the time supplies were held in a warehouse and thus cut the labor and real-estate costs associated with storage.

Among retailers, a just-in time/lean approach can be a novel way to reduce shipping costs.

For example, Wrist Mafia sells watches online, but almost exclusively through subscriptions. The subscriptions it offers are monthly, every three months, bi-annually or annually. It uses fixed shipping dates, founder and CEO Johnny Brown said in an interview with Digital Commerce 360, meaning that billing and shipping each happen on the 15th of every month for essentially all customers. That helps avoid worrying about keeping inventory in stock and storage fees, Brown says.

“The product comes in and goes right back out all within a week’s time,” Brown said. “And then we’ll usually have some sort of reserves for people with billing issues, new customers and things like that. But it really just limits our overhead where we’re not just sitting on a warehouse full of watches.”

Brown declined to give a dollar figure for those savings.

Outsourcing and robots

In April, UPS released the results of a survey of 500 ecommerce businesses, and 27% said it was “difficult to manage shipments and ensure a consistent, positive shipping experience across multiple marketplaces and carriers.”

So when a retailer reaches a volume level where in-house staff is struggling and when the operations team has optimized packaging, negotiated shipping rates, and reduced warehouse carrying time, it’s time to consider adding additional expertise.

In January 2023, Steeped Coffee was at that point.

“We had a warehouse, we had manufacturing on site, but based on our scale and where we wanted to go and how fast we’re growing, we just needed to outsource logistics to a third party because they can do it so much more efficiently than we can,” Wickus says.

Wickus put together a request-for-proposals (RFP) process aimed at finding a third-party logistics provider that had advanced robotics capable of case picking, box packing and more that could maximize savings across Steeped Coffee’s customer base. Similarly, Wickus wanted to know the robotics’ constraints.

“Because the more that we can use their robotics, the better pricing structure we have from them,” he says.

In the end, Steeped Coffee signed a deal with Nimble.ai, a provider of what it calls “fully autonomous fulfillment” services.

Wickus declined to say how much Steeped Coffee will pay for Nimble’s services, but he expects to save roughly 30% in fulfillment costs by making the change.

How does a retailer know if outsourcing is the answer? 

There are many reasons a merchant might decide to outsource fulfillment services. First and foremost is that 3PLs and other logistics vendors promise that such moves bring cost savings. But there are other considerations, particularly for smaller retailers.

For example, using the small staff at a small to mid-sized merchant for fulfillment poses a risk. If just a handful of people are doing it all — selling, packing, shipping, etc. — a single sick day by a single worker can throw deliveries off schedule.

Similarly, using a marketplace or 3PL with a national or regional footprint that can store merchandise in multiple warehouses close to major cities, highways and airports ensures rapid delivery. No small retailer that does fulfillment on its own can hope to match such speed.

Black Wolf Skincare recently opted to outsource its fulfillment operations for these reasons. The skincare brand went with fulfillment services vendor ShipHero.

Black Wolf sends its products to ShipHero’s West Palm Beach, Florida, facility. ShipHero then distributes shipments across its network of warehouses and carriers to ensure the fastest delivery times. As a result, Black Wolf cut its shipping costs and reduced the time it takes to ship orders to customers to less than three days, on average, from five or more days, co-founder Alex Lewkowict said in an interview with Digital Commerce 360.

“By my calculation, even at our volume of 1,000 orders a month, we saved more than $2 in shipping costs [per order] using their ecommerce tool,” he says.

The tool helped Black Wolf Skincare find the cheapest available shipping carrier, he says.

“The plan started around $1,800 a month,” he says.

Eliminate the middleman

But some merchants take a different approach.

Marketplace seller Rohan Thambrahalli told Digital Commerce 360 that one way to reduce fulfillment costs is to not have marketplaces provide fulfillment for you.

Thambrahalli, who sells a line of rechargeable headlamps under the brand Kawach on the Amazon marketplace, says he opted not to use Fulfillment by Amazon, a service in which the marketplace handles shipping and delivery and charges merchants fees for processing and long-term storage.

“First, neither you nor Amazon has to bear the cost to take the product from your facility to their facilities, then to the customer. It’s less costly,” he said.

Cutting a marketplace out of the fulfillment equation also decreases the probability of product being damaged, he says.

“If we ship from my facility directly to the customer, we are 6% to 10% more profitable on that order,” says Thambrahalli, who is also founder and president of DimeTyd, a provider of a service to help merchants recover money lost to Amazon accounting errors.

Of course, not participating in the FBA program comes at a cost too. FBA sellers can distinguish themselves from competitors and increase their chances of winning the Buy Box — the section on the right side of an Amazon product detail page where shoppers can add a product to their cart with a simple click on the bright yellow box that says, “Buy Now.” Participating in FBA also allows a retailer to offer Prime shipping.

Charge for shipping?

The most obvious way for a retailer to cut shipping costs is also the most difficult: Stop offering free shipping.

But by offering free and fast shipping for its paid members, Amazon has conditioned shoppers to expect free shipping everywhere. And many retailers decide they have little choice other than to follow Amazon’s lead.

And with good reason. A January 2022 Digital Commerce 360 survey of 1,108 online shoppers found that 76% said free shipping would make them more likely to make an online purchase. It was the most-cited factor.

Furthermore, in an August 2022 survey of 1,116 online shoppers by Digital Commerce 360 and Bizrate Insights, 70% of respondents listed the availability of free shipping as one of the three top reasons for choosing online retailers. Female shoppers were more likely than male shoppers to say that free shipping led to a purchase.

Given shoppers’ affection for free shipping, it’s not a surprise that the percentage of Top 1000 retailers willing to ship orders for free in at least some cases ticked up to 77.2% in 2022 from 73.8% the prior year, according to Digital Commerce 360 research. It was 70.1% in 2019, the last full year before the pandemic.

Put a different way: Less than a quarter of the top retailers charge customers for shipping.

Shipping: Free for consumers, pricy for retailers

Free shipping is most common in categories where products are relatively expensive and lightweight, making them less costly to ship. In the jewelry category, for example, 97.6% of Top 1000 retailers offer free shipping in some form. However, the median minimum purchase of $99 is at the top end of free shipping thresholds. Retailers in this category are also most likely to offer free return shipping, at 59.5%.

In the large apparel/accessories category, 84.7% of retailers offer free shipping and 39.7% free return shipping. The threshold for free shipping is lowest in flowers/gifts at $30, followed by health/beauty at $45.

Some 47.3% of Top 1000 retailers require a minimum purchase to receive free shipping. And that minimum has moved up noticeably in recent years. The median purchase required to get free shipping is now $75, as it was in 2021, whereas it was only $50 in 2019.

The percentage of mid-sized retailers that offer free shipping is only slightly lower, at 73.6%, according to the 2022 Next 1000 report from Digital Commerce 360.

Free shipping is costly for retailers. But many merchants find they have little option other than to give shoppers what they expect. It’s thus crucial for retailers to find ways to lower the expense of meeting those expectations.

That’s what Steeped Coffee tries to do. It offers free shipping for U.S. orders of $49 or more and has no plans to stop doing so.

“We’re going to continue to offer free shipping. We’re growing our brand. It’s important to get it out there, so we’re going to keep it easy and simple,” Wickus says. “But we’re reducing our costs on the fulfillment side. So perhaps it balances out.”

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Already Asos’s third-largest shareholder, Frasers raised its holding to 8.8% from 7.4%, according to a June 6 filing. The stake has grown from around 5% in October.

Ashley founded Sports Direct four decades ago and built it into Frasers. The billionaire has a track record of taking stakes in failing retailers and growing positions in rivals.

Frasers has purchased stakes in Hugo Boss AG and luxury handbag maker Mulberry as well as buying Savile Row tailor Gieves & Hawkes, video game retailer Game Digital, apparel brand Jack Wills and online brand Missguided.

Asos changing trajectory

Asos has been overhauling its business in a bid to return to profit, reducing inventory and cutting back on excessive discounting.

Last month, it raised £75 million ($93 million) in equity from its two largest shareholders, Danish fashion group Bestseller and U.S. hedge fund Camelot Capital Partners, to support its turnaround plan. The company also refinanced its bank debt with borrowing facilities from specialist lender Bantry Bay Capital, backed by U.S. activist Elliott Investment Management.

Asos received a takeover approach from Turkish online retailer Trendyol in December at a price that would have valued the company’s shares at between £10 and £12 each, according to the Sunday Times. Talks between the companies are no longer active, the newspaper reported.

Asos was for years a stock-market darling amid rising sales and profits. But it has fallen 89% in the past three years and is now one of the United Kingdom’s most-shorted stocks.

ASOS Plc Holdings ranks No. 19 in the 2023 Europe Database. Digital Commerce 360’s database ranks the largest European online retailers by their web sales.

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“We needed to have a lot more targeted conversations with each consumer throughout their lifetime with Bark. And we needed to do that efficiently,” he says.

Bark started its business in 2012 selling a monthly subscription BarkBox containing two dog toys and two dog treats in each shipment. The dog toy and dog food subscription retailer expanded its product offerings through the years, including offering dental products in 2020.

Ed Walloga, vice president, lifecycle marketing and ecommerce, Bark

To figure out how best to market to consumers to increase upselling and cross selling, Bark turned to Simon Data, a software tool that allowed the retailer to run comparison tests and see how marketing campaigns perform.

Retaining and building up the lifetime value of its customers is important to the subscription retailer.

Data shows 5.6% of retailers in Digital Commerce 360’s Top 1000 retailers used a subscription model in 2022. That’s down from 6.5% in 2021. That percentage differs depending on the category. 36.1% of Top 1000 food and beverage retailers had a subscription model in 2022. That is up from 27.8% a year earlier. 28% of health and beauty retailers had subscriptions in 2022, and 10.1% of specialty retailers like Bark.

During its fiscal fourth quarter 2022, Bark’s average order value increased $2. Upselling and cross selling accounted for the boost, Walloga says.

“And a huge amount of that was the increase in improving [conversion for] dental Bark Bright,” he says. Bark Bright are products like toothpaste and dental chew treats for dog teeth care.

Bark tests marketing emails for Durable Dental Chew products

In January 2023, Bark tested two marketing email campaigns for its Durable Dental Chew product launch, which is part of Bark Bright.

Bark sent the emails to its regular BarkBox subscribers. These subscribers received plush toys with treats as part of their core subscription.

The other type of subscribers are Super Chewers. These subscribers receive more durable toys in addition to treats as part of their core subscription.

The A/B split tests involved “several hundred thousand in each pool, and the A/B test was an even 50/50 split for each pool,” according to the company.

A/B testing, also known as split testing, allows Bark to test a percentage of its subscribers with two email campaigns to see which results in more opens or clicks. Bark can test different images or language and compare which ones consumers responded to more favorably.

The results showed that BarkBox subscribers were more responsive to the standalone announcement. Conversion rate was 16% higher for those BarkBox subscribers.

Meanwhile, Super Chewer subscribers were more responsive to marketing that highlighted the product collection. Conversion rate for these consumers was 30% higher.

“This was a surprising result, but this is why we test these things,” Walloga says.

Bark believes that because Super Chewer is a more specialized product, consumers liked a side-by-side comparison of original and durable products.

Bark subscribers opt in for SMS texts

There are 2 million BarkBox subscribers receiving a box every month, Walloga says. BarkBox sends subscribers products they can add onto each box. That program includes sending push notifications via SMS, he says.

“We’ve got a very aggressive push notification,” Walloga says.

SMS is an opportunity to “have worthwhile conversations with active and engaged customers,” he says. “That’s where you can apply SMS, and it doesn’t feel like a promotional campaign [to the consumer],” he says.

Bark used Simon Data to launch SMS in July 2022. It currently has 175,000 subscribers opted in to receive text messages. The opted-in base is growing by an average of 35% each quarter, according to Bark.

When customers respond to Bark SMS texts, a Bark employee responds, Walloga says.

“Our customer care team can pick up the [SMS] conversation and respond directly,” he says.

SMS subscribers receive a mix of product availability announcements. These include alerts about exclusive treats, toppers and toys they can add to their subscription box before it ships. SMS recipients also receive order status updates like shipment confirmations and account updates. They also receive marketing messages for “seasonal moments” like Cinco de Mayo or celebrating Star Wars on May 4th.

One of the most successful SMS texts reminds subscribers they have 24 hours left to add to the next box, he says.

Also, Bark is working on using its app to engage with consumers.

“We want to test pushing notifications directly to the Bark app,” Walloga says. According to Walloga, “a vast majority of our users are engaging on a mobile phone or the Bark app,” he says.

Bark adjusts email marketing strategy to retain subscribers

Bark subscribers typically commit to six- or 12-month subscription periods, Walloga says. The retailer reviews data to identify which customers are most at risk of leaving, he says.

“We’ve developed [email] outreach to those customers to remind them of the value that they saw as a Bark user,” he says.

This includes noting purchase history and favorites, he says. In addition to a personalized message, the retailer also sometimes includes incentives. This has allowed Bark to keep subscription renewal rates strong, Walloga says.

Email is still at the core of Bark’s digital marketing tools, Walloga says.

“Email is one of the fastest ways to test and iterate, and it gives you a little more real estate to have a conversation with a consumer,” he says. “But by no stretch is it the only channel we use.”

Personalized communications increases loyalty, Walloga says. Some of the tests Bark tried focused on loyalty, reminding customers of the value Bark brings them.

“If you have a very targeted, personalized conversation with the consumer or subscriber, they will respond,” he says.

Bark is No. 174 in the Top 1000. The database is Digital Commerce 360’s ranking of the largest North American online retailers by web sales.

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Three of the top four online retail websites for apparel shopping are mass merchants. Amazon, Walmart and Target draw a large portion of online apparel sales. More specifically, four in 10 apparel buyers purchase 26% or more of their purchases on Amazon.

Mass merchants draw beauty sales

Overall, mass merchants dominate online beauty purchasing. Amazon, specifically, drew 59% of beauty-product purchases between October 2022 and March 2023, according to a Digital Commerce 360 and Bizrate Insights survey. 52% of respondents shopped with other mass merchants in the same time frame. Meanwhile, no other kinds of retailers had a 50% penetration of sales. The next largest penetration of beauty-product sales was with drug stores, at 36%. And 29% of respondents shopped with specialty beauty retailers, in particular, for such products.

Just over a third of surveyed online beauty shoppers go directly to brands for their loyalty program perks and money savings. 26% said they go directly to a brand because brands are more likely to offer free shipping, and 23% cite trust as a key factor.

Same-day delivery and flexible returns with mass merchants

38% of surveyed online shoppers ordered online from a web-only retailer for same-day delivery in the six-month period from September 2022 through February 2023. Meanwhile, 31% ordered online from a physical store for same-day delivery.

On the flip side, 24% returned an Amazon order to another retailer (such as Kohl’s) for processing back to Amazon. That compares with 19% who returned an Amazon order to an Amazon return center.

And when it came to in-store and curbside pickup, more than half of shoppers went to Walmart (63%) or Target (52%). Meanwhile, 37% of surveyed online shoppers used such services for hardware/home improvement purchases, and 34% for consumer electronics.

Amazon buying frequency

The online buying frequency among Amazon shoppers is fundamental to their success.

27% of survey respondents in September 2022 said they purchased from Amazon a few times a month. 18% said they purchase from Amazon a few times a week. Meanwhile, 3% said they purchase from it daily, and 6% said they do so multiple times a day.

Almost half of online shoppers surveyed purchased more apparel, home goods and health/beauty products on Amazon than elsewhere in 2022.

And when shoppers aren’t purchasing on Amazon, they tend to shop online at Walmart (54%), Target (36%) and specialty retailers (36%). Department stores and other marketplaces take the next largest shares of sales.

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When asked about their experiences with marketplaces over the past year, online shoppers remain passionate about purchasing via Amazon’s marketplace. That was in play for 76% of survey respondents. As there is a lot of clutter on marketplaces from advertising and sponsorship, we wondered if shoppers understood the complexity of marketplaces. As it turns out, close to half (46%) admitted they didn’t know if a product was being offered by Amazon or another marketplace seller.

Who’s selling what? And where?

An array of U.S. marketplaces beyond Amazon, eBay and Walmart, including specialty marketplaces, are also capturing shopper attention. Some 35% purchased from Walmart’s marketplace and 39% ventured out, also buying from marketplaces beyond eBay, Amazon and Walmart. 31% of participants bought from specialty marketplaces. Chinese marketplaces saw 18% penetration, and 6% of respondents purchased from other non-listed marketplaces.

Shoppers are active in the community, leaving product reviews at Amazon and other marketplaces. Amazon was the biggest recipient (46%), while 31% took the time to leave reviews beyond Amazon.

Interest in same-day delivery is seen and will likely grow in the coming year as 20% of those surveyed make those “need it now” purchases. Though marketplace sellers strive for in-stock status, 18% encountered out-of-stocks, which seems somewhat reasonable coming off post-COVID supply chain woes.

A topic we wanted to cover in-depth this year was counterfeit products. Just 9% of respondents felt they received such merchandise.

With assortments on marketplaces perceived to be greater, shoppers may find marketplaces more attractive. Half of marketplace visitors believe they are finding larger assortments with 43% about the same and just 7% less.

Higher prices, longer delivery lead times and out-of-stock products were the biggest marketplace challenges shoppers faced

Marketplaces need to monitor everything from product pricing to shipping fees as customers are savvy and shop around. This is especially true as 39% felt that marketplace prices were higher than they remembered. Additionally, 26% believed shipping fees were higher as well.

Logistics can be challenging for online shoppers with heightened interest in fast delivery. Yet, longer delivery lead times were found among 26% of survey respondents.

Out-of-stocks were sometimes a factor for shoppers (22%) and may have driven them to explore alternative marketplaces. Customer service-wise, just 15% said that limited or longer wait times were seen as problematic.

For 24%, it was difficult to distinguish between going to sellers versus the main marketplace, which was seen as challenging. Marketplaces should assess awareness of where products are made and their authenticity, though. Only 18% discerned if products were made in the USA, and just 17% if products were counterfeit.

Shopper buying frequency: Social marketplaces get increased attention

Social marketplaces like Facebook or Instagram are attractive to online shoppers. Sellers should test them to see if audience fit makes sense. One in four online buyers shops these social marketplaces. It’s also a positive that 19% of survey respondents indicate being more comfortable with the online marketplace model. And 18% are conducting more online purchases via marketplaces.

Sellers must be aware of the clutter factor. Some 20% of survey respondents suggested they dislike it when retailers such as  Target and Walmart add marketplaces because the retailers’ sites become cluttered.

More online behavior changes include shopping directly on sellers’ websites instead of marketplaces (19%), increased purchasing on marketplaces (18%), trying new online marketplaces (17%), and shopping exclusively on marketplaces (6%).

The same number of respondents (20%) find the broader marketplace assortment appealing and believe marketplaces tend to have more inventory.

From a dollars and cents point of view, perceptions from 23% were that prices were often lower than other retailer sites. Meanwhile, 16% felt fees were often less than other retailer sites. Yet 14% found prices including shipping fees in line with other retailer sites.

And when it came to customer service, 13% suggested marketplace customer service is on par with the retail sites they shop (13%).

Marketplace adoption expands

Marketplace purchasing will likely be steady in the coming year as two in three online shoppers plan to purchase about the same from marketplaces. Comfort with the model sees one in four shoppers indicating they will be buying more or exclusively from marketplaces. Positively, only 10% will buy less, and 5% said they don’t buy on marketplaces.

Many shoppers will experiment when smartly tempted by marketplace sellers. The majority of shoppers (52%) are willing to buy from unfamiliar marketplace brands or sellers. The biggest opportunity is convincing those that are on the fence that a site or brand is a viable option and to gain their comfort among the 29% of participants on the fence.

Online marketplace exposure and purchasing often leads to direct purchasing, which is likely to be more profitable for the merchant. Over half of online shoppers surveyed indicate that they have ultimately purchased directly with that merchant. This added product visibility via marketplaces can serve as a strong customer acquisition vehicle, making it one of the reasons retailers are participating more on marketplaces.

The role of ratings/reviews in helping shoppers make smart selections has bottom-line impact for sellers. 96% of online shoppers read and make purchases based on ratings and reviews. Reviews always influence the majority (55%) when making purchases. Meanwhile, 41% occasionally see such an impact.

Thus, online marketplaces must make sure reviews are robust. Smartly positioning reviews within the shopping experience ensure strong viewership.

Marketplace shopping starts with better prices and free shipping, along with in-stock products that can be delivered fast

Online shoppers seek the fundamentals when choosing to shop at marketplaces over going directly to retail sites. Price is the driving factor, selection appreciated, and convenience a given. Topping the list of influences in driving online shoppers to marketplaces is better prices (52%) and free and discounted shipping (51%).

Delivery speed is also an important influence in selecting marketplaces. 41% of survey respondents refer to it in choosing a marketplace. Shipping efficiencies, at 25%, also were a factor.

34% of survey respondents see marketplaces, at their core, as more convenient ways to shop. For 25%, it may be the broader selection in a category and for 20% the influencing factor in a wider range of categories in one location. Meanwhile, 17% found they were ideal for repeat purchasing (17%). But more interesting to me is that they have a unique opportunity to help online shoppers find very specific items (34%) while also trying unique products (24%) that sways shoppers toward marketplaces.

Past experience is an important indicator of future purchasing. It served as an influence for 20% of those surveyed as well.

From a tactical perspective, ratings and reviews — and more comprehensive product information (14%) — power purchasing. Higher seller feedback and ratings were influencers for 25% of participants.

Shoppers have a preference for in-stock products, and 34% found it influenced their behavior.

Other marketplace tactics that came into play from an influence point of view included loyalty programs (19%) and mobile apps (18%). I’m surprised only 13% cited superior service. It should go without saying.

Top concerns related to online marketplace purchasing are logistics, fees, product authenticity and return limitations

Online shoppers want the products they purchase to be of top quality and as represented on the site. Encountering counterfeit products was top of mind for 35% of participants. At the same time, 30% cited issues around subpar product quality.

Because long shipping times can cause buyers to worry (39%), inventory and delivery transparency are welcome. 22% of these online shoppers expressed concerns that an online order would never ship.

Shoppers expect marketplace goods to come from trusted sellers. Some 30% had trepidation about non-U.S. sellers. Simultaneously, 29% worried about whether the seller was not reputable or certified.

Shoppers like to have flexibility in their return choices. Some 33% of surveyed online shoppers found a lack of return options a challenge. Having customer service and support available is a given. 28% of respondents cited it.

A lack of product or seller reviews concerned 27%. The validity and authenticity of product reviews also was an issue for 29%.

From the money and savings vantage point, 38% found shipping costs too high, while fraudulent business practices including counterfeit goods were on the concern list at 35%. Unexpected additional expenses such as sales tax (22%), finding U.S. products at lower prices (16%) and financing options not available (11%) also were on the minds of these shoppers.

Online marketplaces continue to have an opportunity to grow. Broad assortments and attention to the fundamentals — from price to selection — set the tone for success. I advise vigilance when it comes to them. Sellers must monitor the quality and authenticity of their products. Product reviews and information will continue to drive confidence, along with an uncluttered, search-friendly and efficient experience. Monitoring consumer behavior will ensure marketplaces are on track for success in 2023 and beyond.

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The post The Shopper Speaks: Online marketplaces are in growth mode appeared first on Digital Commerce 360.

CCI Kenya is located Nairobi. It is the fastest growing professional Business Process Outsourcing (BPO) in Kenya. CCI Kenya provide a range of professional outsourcing services to international companies from the United States, Australia, and Europe. Additionally, BPO services are also provided to domestic African Companies.

Since launching in 2016, CCI Kenya has grown rapidly, with more than 3,000 employees in Nairobi working to deliver digital customer management services to clients around the world.

CCI Kenya offers outsourcing services from for all stages of the customer life-cycle covering sales, customer service, customer loyalty scheme management, omnichannel customer management, digital marketing and customer retention.

Rishi Jatania, Managing Director of CCI Kenya, explains why more and more medium-to-large sized companies are turning to outsourcing key parts of their business to the African BPO landscape.

CCI Kenya delivers bespoke digital customer management strategies

CCI Kenya is part of CCI Global which operates in 5 countries from 14 delivery locations including South Africa, Ethiopia, Rwanda, and Ghana.

CCI Global began cultivating its specialist capabilities when it arrived in Africa in 2006. Since then, the business has gained a deep understanding of the African market. CCI Global is the largest leading business process outsourcing BPO (provider) in Sub-Saharan Africa.

Why is business process outsourcing increasingly popular?

Rishi Jatania, Managing Director of CCI Kenya, explains “Business Process Outsourcing (BPO), which is also sometimes known as Business Process Services (BPS) allows businesses across all kinds of sectors to gain the best possible solution for their needs via international outsourcing.

“Leading brands from all kinds of different sectors have discovered that BPO is a highly effective way to derive true value for their services. In general, companies find this more cost effective while retaining a highly skilled employee pool that is part of its wider operational design that can sustain specialist capabilities.’

Which locations attract BPO partners?

Mature BPO markets are in places like India and the Philippines, where the focus is predominantly on front-end customer services for financial businesses and telecommunications.

“More and more, businesses are recognising the potential of Africa for BPO outsourcing,” says Rishi Jatania MD of CCI Kenya. “The continent has enormous potential, a vast and highly educated youthful population all looking for ways to develop a lasting career and an increasingly sophisticated infrastructure underpinning all of this.

“Countries like Ethiopia, Rwanda and Kenya can offer cost effective service at lower costs to international clients than are available in their home or customer markets.

“At CCI Kenya, every call center agent is fully trained and supported to work in a fast-paced commercial environment, has excellent English-speaking abilities and a thorough understanding of how to find the ideal solution for every client. CCI Kenya works as a global delivery network.”

The rise of the African BPO sector

“CCI Global arrived on the continent in 2006, which was a key time for African countries placing themselves on the global outsourcing map, ” explains Rishi.

“During the late 2000s and early 2010s, an enormous amount of progress was made by African Governments and the private sector in countries like Kenya, South Africa and Ghana to improve Internet connectivity via subsea fibre optics.

“Once this was in place, it became a no brainer for businesses in countries like the UK, the US, Australia and Europe to consider Africa as an outsourcing partner.”

South Africa and beyond for BPO

“South Africa has been also strong in this sector since the 2010s, something that CCI South Africa has helped to shape,” says Rishi from CCI Kenya. “South Africa has everything necessary for a thriving sector, including development opportunities, cost capabilities and plenty of space to build contact centers if necessary.

“Africa’s BPO market is growing exponentially. The outsourcing industry matches exactly our continent’s future economic growth expectations.

“In Kenya, for example, we’re completely aligned with the Government’s Kenya Vision 2030, which aims to create a middle-income powerhouse with a safe environment for people to get on that career ladder and thrive as we know they can (including areas such as consumer sales).”

CCI Kenya moving into the future

“We’re now through the unprecedented challenges presented by the global COVID 19 pandemic and are in a position to reset, use everything we’ve learned and put it towards becoming the number one destination for outsourcing,” continues Rishi CCI Kenya.

“CCI Kenya has expanded into our new purpose-built contact center, set up for our employees, to help them learn, develop and thrive. Our work includes specialist partners working with us to ensure solutions are found for every client, whether they are within leisure sectors, mobile technology or any other key global sector.

“The African BPO landscape is growing all the time, and we have zero doubts that this will continue as we move towards 2030.”

For more on CCI Kenya, click here.

About The Author – Rishi Jatania

Rishi Jatania is the Managing Director of CCI Kenya. CCI Kenya has grown by 700+% under his leadership since 2016, after developing and implementing growth strategies. For the past 17 years, Rishi has worked in the contact center/BPO industry in East Africa and the UK to ensure outsourcing providers deliver excellent customer service and deliver consumer sales. He has worked for some of the leading captive centers in the UK, such as Carphone Warehouse and Telecom Plus.

The post [Sponsored Content] CCI Kenya | Why more countries are turning towards the African BPO landscape appeared first on Digital Commerce 360.