European brands: relying on marketplaces isn’t sustainable

European brands: relying on marketplaces isn’t sustainable

European brands: relying on marketplaces isn’t sustainable

54 percent of European brands think their ecommerce potential is crippled by their logistical capabilities. And that’s why many retailers and brands turn to online marketplaces. But they also think that relying on marketplaces isn’t sustainable and want to shift the balance more to their own ecommerce channels.

Accenture and GEODIS surveyed 200 large US and European omnichannel retail and consumer-goods brands. And two key findings emerged from their research. The first is that the pandemic brought major changes in where brands make their sales. During the lockdowns, online sales doubled, while direct online sales quadrupled. With 56 percent of European brands expecting their direct online sales to exceed 20 percent in three years from now.

56% of European brands think their direct online sales will exceed 20% in three years.

‘Logistics not scaled to support ecommerce acceleration’

The second finding is that 54 percent of European brands think their logistics is not scaled to support their online business acceleration. “So many brands use marketplaces as a one-stop-shop for selling their products. This allows them to reach a broad audience and compensate for a lack of resources and logistics infrastructure, while at the same time meeting the expected customer experience”, says Sohel Aziz, managing director of Accenture.

59% of European companies depend on marketplaces

Currently, 59 percent of European companies depend on online marketplaces for their online sales. This percentage is higher than that of American companies (46 percent). In the period before Covid-19 spread across the globe, online marketplaces had a 28 percent share, while during the pandemic it increased to 38 percent.

‘Over-reliance on marketplaces isn’t sustainable’

But according to the survey, many brands believe that over-reliance on marketplaces isn’t sustainable. They want to shift the balance more towards their own online sales channels. Almost two-thirds (64 percent) say reducing the dependence on marketplaces is their first or second priority in the next six months.

Reducing the dependence on marketplace is top priority for most companies.

Within three years, 56 percent of European companies want to sell directly to consumers through their own online store, with the goal of generating 20 percent of their total sales through this channel.

“Currently, only 5 to 8 percent of online sales are direct sales from brands’ own websites. The brands want to increase this share to 20 or 30 percent over the next three to five years”, Aziz explains. “The survey shows that brands are aware that improving their omnichannel logistics capabilities is essential. To achieve their goals, adjustments are urgently needed.”

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