Highlights from Marketplaces and Retail Media: Changing the Shape of Commerce Forever
On Thursday March 31st, Tambo hosted the event, Marketplaces and Retail Media: Changing the Face of Commerce Forever, with panelists, Colin Lewis from Marketing Week, Dan Shering from Skai and Tambo’s Head of Marketplaces, Jenny Hodgkinson.
The panelists’ discussion covered the distinctions between marketplaces and retail media, brand building on marketplaces, advertising opportunities and the main challenges for brands as they look to scale across different marketplaces.
The event kicked off with an upfront definition of marketplaces and retail media, with Colin Lewis explaining that, “It’s important that at the outset, we distinguish between marketplaces, e-commerce and retail media.
“Horizontal marketplaces are sort of department stores, but in a marketplace format, and the brand we are most familiar with is the likes of Amazon. Tmall does the same in China and Allegra does the same in Poland.
“One area that has been very interesting over the last couple of years is what I call vertical marketplaces. An example of one is Airbnb, which is travel related.”
“Brand.com or DTC, like huel.com or nike.com, that’s where the brand is vertically integrated and goes direct to the consumer. They make a product and sell it directly to the consumer. Typically not a lot of SKUs.
“And then we have department stores, known as retailer.com, sometimes called e-retail. This includes your Next’s, your Carrefour’s, Boots and so on. It’s a brand with lots of products that they sell that belong to other brands.”
The panel then moved onto talking about how brand’s should be thinking about Amazon as part of their growth plans, Skai’s Dan Shering told us, “Amazon is always going to be integral to a brands marketplace plan - that's not changing. In fact it's going to become more integral when you look forward 5 years - It will truly sit alongside the likes of Google and Meta.
“Amazon has always been a leader in advertising and will continue to innovate with new ad formats that the others will likely follow suit if successful for Amazon. Our own retail media study shows that brands expect Amazon to increase in importance”.
Jenny Hodgkinson commented that, “With e-commerce in general taking an increasing share of total market sales, and marketplaces taking an increasing share of e-commerce, it follows that Amazon, as a dominant marketplace, should form an integral part of a brand’s growth plan. However, we all know it’s not advisable to have all your eggs in one basket, so brands may want to consider diversifying into other marketplaces. Not only to reduce their reliance on Amazon, but to ensure they are reaching their customers wherever they choose to shop.”
The panelists were then encouraged to think beyond just Amazon, and provide an opinion on whether or not they thought that all Marketplaces and all e-commerce retail, would become ‘pay to play’, and If so, how brands would win in that scenario.
Skai’s Dan Shering told us, “Organic and paid really need to work in tandem. It’s really short sighted just to work on the paid element. If you’re looking at driving traffic to a page, and that page isn’t optimised, then you’re not going to get the conversions. Then, suddenly all of those metrics start falling out of sync and you start losing those ROI metrics because you’re not thinking about the whole piece together.
Jenny commented that, “I definitely think we’re seeing pay-to-play becoming more important. We’re already seeing more sellers investing in retail media, which is pushing up CPCs. So, to Dan’s point, it’s about being clever with the spend, and that requires a combination of specialist people and best-in-class tech. It’s about making sure you’re combining that expertise with leading bid technology.
“I think it’s also key to understand that the ad investment isn’t just about the direct ROI, it’s also going to be influencing the organic search ranking so it’s impossible to separate the two between organic and paid”.
The final highlight from the event was in regards to the much-discussed talent gap in the industry.
Dan Shering provided a very forward-thinking and valuable perspective on this subject, “Firstly, question whether or not hiring is the right thing to do for your business. There are a lot of talented agencies and we have a lot of clients who are happy with the expertise that Tambo, for example, is able to bring for them. So, that expertise exists already, first and foremost.
“However, if you are looking to go down that hiring route then there are a plethora of retail media specialists. What you’re really looking for is that test-and-learn culture. Hire for culture, look at people with the skill sets that come from various different perspectives. Look for curiosity and those individuals that have that natural curiosity. I don’t agree that there’s a gap, it’s just thinking and looking at things differently. This is a different marketplace; skillsets are transferable and there’s lots of opportunity”.
To add to this, Colin Lewis thinks that, “There is no such thing as a talent gap. If you want to hire Elon Musk, you can, it will just cost you billions. So, it’s an economic discussion rather than a talent discussion.
“Innovation means that there is always going to be a ‘gap’. So, we have to look for proxies- what you’re actually looking for in interviews is capabilities. So, if someone has run performance marketing campaigns and Adwords, they can run retail media. Somebody who understands DTC e-commerce can get their head around marketplaces. What you’re looking for is proxies. Someone who is street smart, has common sense and the ability to transfer skills".
All-in-all we were extremely pleased with the learnings and takeaways discussed by our panelists. All of the talking points were valuable for our current clients as well as anyone wanting to learn more about retail media and marketplaces. At Tambo, we aim to do at least one online event or webinar every quarter in order to keep the ball rolling when it comes to industry learnings. our next event will be a joint event hosted with Amazon on How to Drive the Funnel with DSP. We look forward to seeing you there.