Opinion: The risk of brand dilution in etail marketplaces

In fact, our research based on an Economist Intelligence Unit (EIU) survey of 150 C-level retail executives across Europe, revealed 26% say globally competitive marketplaces have the greatest impact on retailers and their ability to reach their goals over the next three years.

While marketplaces are more often viewed as an ally, one challenge they present is removing the sense of ‘brand’.

“Louis Vuitton plays videos of its fashion shows and has created an online fashion editorial to deliver a superior experience online that reinforces the values of the brand”

Amazon, for instance, presents product results in tiles that all look the same and are incapable of conveying a company’s brand.

For retailers that invest heavily on building a brand identity, this is a concern.

Only last year, we saw luxury goods group, LVMH, shunning Amazon, saying that there was “no way” it would do business with the ecommerce giant as it is not an appropriate platform for its luxury brands.

Instead, several of LVMH’s brands have invested heavily in creating a luxury omnichannel experience.

For example, Louis Vuitton plays videos of its fashion shows and has created an online fashion editorial to deliver a superior experience online that reinforces the values of the brand.

Market power

In addition, marketplaces also have much greater access to consumer data – a resource of growing importance.

The ease of discovery and seamless experience that marketplaces offer gives them a great deal of power from access to incredible customer insights.

“The best strategy for retailers is to engage with marketplaces today in a way that doesn’t place too much emphasis on their importance”

Yet, for retailers concerned about the growing dominance of marketplaces, the reassuring news is that the behavioural trends of millennials has suggested that marketplaces may not always have their own way.

Our research shows that consumers remain loyal to brands, not the channel.

Promiscuous consumers will drift to new entry points in the commerce market, such as social and apps.

The best strategy for retailers is to engage with marketplaces today in a way that doesn’t place too much emphasis on their importance.

Instead, marketplaces need to be part of an omnichannel strategy that is focused on enabling retailers to rapidly scale their business and adapt as alternatives become available in a global retail market.