The rise of multi-brand marketplaces signals a new chapter for retail in volatile times
Just as lockdown has delivered the final blow to struggling department stores, it has also given fresh relevance to multi-brand marketplaces. From Just Eat to Etsy and Asda’s recent collaboration with womenswear brand In The Style, retailers are working collaboratively to meet the unparalleled demands – and opportunities – of a post-Covid age.
What role will real-world locations play in the retail process?
So what’s behind the rise of multi-brand marketplaces, and how can brands ensure they succeed? Here are three elements that we’ve identified from working with high-profile brands in this space:
The experiential power of partnerships
Although the parameters of consumer loyalty are constantly changing in these volatile times, experience is a key retail trend that can still make the difference when it comes to lasting brand resonance. Smart or unexpected partnerships can deliver on that elusive surprise and delight factor, cross-pollinating audiences for a stronger brand proposition.
Think of BMW’s team-up with hip streetwear label Kith unveiled last year. At first glance, the meeting of minds between a classic, established automotive brand and a cool-for-school fashion disrupter seemed unlikely – but therein lay its genius. By coming together for the launch of the limited-edition G82 M4 Competition, complete with a series of unique yet subtle design accents, the two retail brands were able to cross industry boundaries.
In doing so, they stretched the margins of their own brand identities, effortlessly gaining ground in new customer territory. And they achieved this by leveraging a standout experience (the collector’s edition car) for a playful, aspirational edge.
Another example of this strategy in action is Crocs’s limited-edition Kentucky Fried Chicken clogs that debuted at New York Fashion Week. Again, this saw two brands that have nothing in common on paper unite to create an imaginative, cult-status effect.
The multi-brand marketplace takes this magic formula and runs with it, prioritizing connection and relevance over time-honored models of brand protectionism.
Online and offline – a symbiotic relationship
So, joint ventures are a natural next step for major players in commerce right now – but they’re not necessarily easy to execute. Retailers need to find exactly the right collaborators to evolve successfully with this trend, carefully considering factors such as audience reach, competition and distribution models.
To this end, retailers that consider the overlap between digital and physical deliveries create the opportunity to push ahead. The pandemic may have realigned our shopping habits, with a huge uptick in digital demands, but brick and mortar stores still have their place – especially when it comes to standout CX.
Think of streetwear brand Culture Kings, which recently paired up with Shopify Plus to supersize its online presence, including a ‘Shop The Look’ page where stylists replicate in-store services by curating personalized outfits. Most of the brand’s sales are now made online, but its flagship stores – complete with DJs and immersive art – fulfil that vital sell-in on experience.
Another way of approaching this hybrid structure is via micro-fulfillment: in other words, turning physical retail locations into small, neighborhood storage facilities to enable the fastest, most convenient online deliveries possible at minimal cost. These spaces can also be used to fulfil in-store shopping needs, forming a layout that is part real store, part logistics center. Retail giant Amazon has been quick to capitalize on the trend, extending from huge warehouses to more flexible and localized fulfilment centers across the UK.
Prepare the groundwork for technical maturity
If brand partnerships are a savvy route into the reciprocal cycle between online and offline commerce, technical maturity is the precursor.
Whether it’s digital sizing tech or a real-world Amazon hub locker, customers expect to interact with brands seamlessly at multiple touchpoints, and retailers often fail because they cannot easily meet these shifting behavioral demands. It makes sense, therefore, to invest in composable architecture that can evolve with the user as their preferred channels evolve. By building on modular cloud-based solutions, brands can direct their investment toward the most valuable asset – that of customer experience.
This approach ensures that the customer journey is as streamlined and easy as possible, regardless of device or platform that they are interacting with, or even if they choose to switch channel mid-journey as is often the case. The modular approach also supports content teams that are often undersized and under constant pressure to deliver regular timely updates, keeping the brand in pace with fast-moving consumer demands across multiple markets worldwide.
Composable systems can also facilitate the best possible digital interactions to work in parallel with real-world investments. For example, if a brand plans to expand its network of micro-fulfillment centers, the strategy will only be successful if it is reinforced by watertight digital infrastructure to funnel on-demand delivery.
Real-world locations still have their place in retail, but increasingly as places to support the experience that the brand aims to realize, rather than as a vehicle for transactions. Convenience and the fastest route to purchase will always win out, giving multi-brand marketplaces real traction in a competitive sphere.
In exploring this kind of ecosystem, brands should think carefully about their capacity for hybrid structures and honestly evaluate their own technical literacy and that of their partners. With these two cornerstones in place, it’s possible to make the most of the experiential capital that comes from operating in a fast-paced cross-brand sphere.
Andrew Dunbar, general manager, EMEA of digital consultancy Appnovation.
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