The most fundamental shift in consumer behavior is the unstoppable rise of online marketplaces in recent years. According to Statista, online marketplaces accounted for nearly a quarter of global online shopping orders. In Europe, that number is even higher, with estimates ranging from 50-65% of all e-commerce sales coming from marketplaces.
It's a significant portion of a big market. In 2021, retail e-commerce sales amounted to an estimated 4.9 trillion U.S. dollars worldwide. This figure, accelerated by the COVID-19 pandemic, is forecast to grow by 50 percent over the next four years, reaching about 7.4 trillion dollars by 2025.
We often say, 'go where your customers are.' As the world becomes more socially connected, increasingly, that place is cross-border marketplaces. However, consumers are changing their behavior, their expectations of brands they interact with, and what they purchase. For fashion, for example, brands are beginning to look towards recovery: 75% of luxury-segment executives, 61% of midmarket executives, and 50% of value executives expect better trading conditions in 2022.
As McKinsey and the Business of Fashion (BoF) discussed in their report, fashion brands must adapt to evolving consumer demand and ensure they take the opportunities offered by new digital frontiers. Whether using marketplaces to amplify reach, increase channels or go global, they're a powerful asset for any brand returning to growth.
Let's explore some of the fashion marketplaces to watch in 2022. This list isn't exhaustive, and we strongly believe that each marketplace needs to be considered in conjunction with strategy- but hopefully, it will provide inspiration and new ideas of where to play. We've grouped them into four distinct categories- European fashion powerhouses, newcomers, off-price, and horizontal- so wherever you sit, there'll be something in this article for you.
If you're an Asia-Pacific or American brand, you might be considering Europe your next frontier. With the free movement of people, goods, and services of the European Union, expanding into one state enables you to sell to all 27 members, some of which are the wealthiest countries in the world. The European Union alone allows you to sell to over 450 million potential customers. Add the purchasing power of the U.K., where internet shopping is more popular than any other country in the world and it's a profound opportunity. Already a European brand? Expanding into marketplaces can enable you to reach new customers and sell more online.
Going global is easier for forward-thinking fashion brands already investing heavily in social selling and hyper-interactive digital environments than ever. But to make your expansion a success, you might consider leveraging the existing engaged audiences of European marketplaces. There are three fascinating, fashion-focused marketplaces to highlight as European powerhouses.
Growing at an astonishing rate of over 40% a year, leading European fashion platform Zalando is not one to overlook. Selling via the marketplace means access to one of the top 3 marketplaces in 23 wealthy countries, over 420 million monthly visits, and access to a whole host of trading tools and customer insights to grow your business. Customers on Zalando- over 90% on mobile devices- order frequently, with average orders per active customer reaching a new all-time high at 5.1 orders over the past twelve months. Zalando can help merchants fulfill orders via their ZFS service and have a comprehensive partner program for retailers and brands.
The next-generation digital platform About You is one for the watchlist. The company aims to digitize the experience of a shopping stroll, focusing heavily on personalization and engaging content. With more than 30 million unique monthly active users, German-born ABOUT YOU is one of the most significant fashion and lifestyle platforms in Europe. It is currently active in 26 European markets. We think it's one to watch, not only because of their impressive growth results but also because of their young consumer base. The focus on personalization helps to cut through an increasingly noisy market, and their commitment to conscious consumption helps future-proof. As McKinsey put it: "More than ever, sustainability is dominating consumer priorities and the fashion agenda. Consumers want to know where materials come from, how products are made, and whether the people involved are treated fairly."
One thing we know: e-commerce moves fast. Insider Intelligence forecasts that e-commerce volume will rise at a 25.5% compound annual growth rate (CAGR) until 2024- hitting $1 trillion this year, two years earlier than initially predicted. New marketplaces are constantly entering the game, with the market growing fast and consumers everywhere looking for seamless purchasing. Here are two fashion-focused newcomers to watch.
Yoox, part of Yoox Net-a-Porter Group (YNAP), a merger of Italian Yoox and British Net-a-Porter, is expanding its operating model. Already a significant fashion webshop, they've opened up their platform to incorporate a marketplace in Europe. Positioned as arty and eclectic for those who love 'the thrill of the find,' they'll be capitalizing on their qualified global audience of 3 million newsletter subscribers and significant social media reach. Yoox will focus its efforts on enabling content creation, market expertise, and consulting brands. At the moment, the marketplace will focus on Europe- a massive market on its own- but has expansion aspirations- with marketplace capability- to the U.S., Middle Eastern, North Africa, and Japanese markets. This is an excellent opportunity to get in early with a powerful newcomer.
Secret Sales, while not strictly a newcomer, is making some new plays in 2022 with a launch into the Benelux region and some serious expansion. According to InternetRetailing, Secret Sales has signed 75 new contracts with multi-brand retail groups and standalone brands in 12 months, launching 687 new fashion, beauty, and homeware brands.
Described by the CEO as a "clean and profitable exit strategy for sustainably selling non-full-price inventory," Secret Sales enables luxury brands to sell overstock without compromising the integrity of their luxury position. Using a shop-in-shop fascia, Secret Sales set out to build a digital equivalent to designer outlet destinations and create a shift in industry thinking around discounting.
Discounting and off-price marketplaces such as Secret Sales are one element in the fashion industry's awakening to sustainability issues. By selling off overstock on separate discount destinations, brands can avoid some of the pitfalls of consumer culture- like burning billions of dollars of stock, as reported in this Vox article. As consumers demand more transparency and ethical accountability, off-price markets are the ones to watch.
Named Vente-Privee.com until January 2019, Veepee-Privalia is a French retailer company that sells products through online flash sales of three to five days to its 50 million website members. The company takes end-of-season and overstock products from major brands and sells them at discounts of up to 70%.
In 2019, Veepee- Privalia decided to exit the U.K. market, focus on mainland Europe, serve European Union member states through its distribution centers in France, and launch a marketplace: Brandsplace. Doubling down on this strategy has rewarded Veepee-Privalia well. They have five dominant markets, focusing on France, Spain, and Italy. Combined, Veepee-Privalia has a reach of over 74 million members. With the expected growth in the region of 40% annually, Veepee-Privalia is a solid strategy for fashion brands looking to deal with overstocking and seasonality and get a foothold in Europe.
Being part of the H&M group means access to some serious retailing capabilities. Launched in Sweden and now expanded into the Netherlands, Germany, and Austria, the marketplace has plans to expand further into the Nordics this year.
Afound aims to encourage a circular fashion economy by providing clothes, shoes, and lifestyle products from hundreds of well-known brands for women, men, and children at affordable prices. It features fashion pieces from the group's brands (which include H&M, COS, Weekday, Cheap Monday, Monki and & Other Stories) in addition to external labels. Essentially, it's about reducing overstock, or as Mirakl described it: "gives fashion new life by offering products that have already been produced."
It's a big bet for the traditional retailer, perhaps inspired by the success of British brand Next or U.S. brand Anthropologie, leveraging the marketplace model to completely upend their relationship with customers, sellers, and manufacturers.
There's no getting away from the power of one-stop-shop destinations. The familiarity of interface and convenience of getting everything they need at once provides a great experience for customers. Here are two horizontal marketplaces to watch that sell multiple categories for fashion brands.
Having just launched a new fashion showroom in L.A., the global marketplace giant is doubling down on the fashion category. Although there have been questions about the tech giant's sustainability with the stores, the marketplace itself is a huge opportunity for brands to leverage data for growth.
Although it was initially a tough nut to crack, Amazon has now begun to disrupt the fashion industry. They've recently become the top clothing retailer in the U.S., grew 40% in India, and accounted for 14% of total U.K. menswear spend. Consumers flock to Amazon for a variety of reasons, mainly the familiar and easy search and delivery functionalities.
Figure 1. Most popular reasons for U.S. Amazon Apparel shoppers to buy clothing and footwear on Amazon in 2019 [source]
Amazon traditionally has not had the best interface to shop fashion, but they've invested in this area in recent years and now offer selected sellers in Europe premium onboarding services. We've created a step-by-step guide to selling on Amazon with a wide range of fulfillment options on our help center.
The Netherlands-based Bol.com is our final one to watch in 2022. As the company eyes up an IPO to fuel its growth goals, they've launched a French-language site and expected revenues to approximately double by 2025. A focus accompanies the explosive growth of the Benelux brand on logistics: in four years, up to 90 percent of the partners are expected to outsource. Bol.com is a solid choice for partnership in a local market for fashion brands, with significant expansion potential. In recent years, they've also made efforts to improve their platform specifically for fashion customers, making it easier to find sizes and filter by color.
It's also a great entry point to work with ChannelEngine- our digital product bundling and hierarchy management services mean you can quickly test out and begin to see the benefits of a marketplace solution.
In conclusion, there are several exciting newcomers and existing marketplaces to sell more online for your fashion brand. To choose the right one for you, you need to think strategically about your goals, customers, opportunities, and considerations. Working with an established marketplace is a great way to expand your sales and brand without taking on the level of risk and complexity of going it alone, but make your decisions carefully.
Does this sound like a good opportunity to expand your business? Request a demo and learn how to make a smooth connection to some of the most promising fashion marketplaces.
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