Mid-market ecommerce platforms can still prosper in difficult period
Recent research from global marketing intelligence firm, IDC reveals that mid-tier ecommerce platform vendors in the UK are struggling. Whilst ecommerce marketing is thriving, online retail has reached a point of saturation – and, as a result, online sales growth is gradually slowing. IDC reports that it is anticipating online shopping year-on-year growth to average at approximately 16% between now and 2015 – more than half that of the previous decade.
As online shopping has gone from strength to strength, the full service model typically offered by mid-market ecommerce platform vendors is no longer appropriate. Retailers need to offer a high level of service to their customer and this requires control over their platforms, both in terms of management and scalability.
ICS offered the following recommendations:
- Diversify: There are many areas of ecommerce-related technology growth opportunities for mid-tier ecommerce market players, some of which are likely to be already be partly developed (such as ratings and reviews, faceted search and recommendation systems). Mobile, social and omni-channel retailing are also major growth areas; along with considerable opportunities around physical store POS as retailers begin to consider using the internet checkout system and mobile POS across the entire business.
- Internationalise: As business dries up in the UK, take your operation abroad to extend your offering to new customers. Huge growth opportunities still exist in Europe – particularly in Spain, Portugal and Italy - but localisation is key due to each market’s unique requirements. Establishing a local presence, rather than launching based solely in the UK, is crucial.
- Sell Up: It sounds extreme, but there are a huge amount of Mergers and Acquisitions (M&A) in ecommerce at present, and IDC believes a bubble is forming as companies are selling for what seems to be well over the odds. Acquisitions by larger organisations should also open up new business avenues.