Shopify tells DTC brands to sell through marketplaces

Shopify, home to over 4 million online DTC brands, in its recent report on the future of eCommerce, recommends selling through marketplaces, among other strategies such as community building, creator collabs, value-driven commerce, or trying new ad platforms. Why? It's getting expensive to acquire customers through popular paid ads platforms.

We agree with Shopify, but we'd advise selling through niche, themed marketplaces that are not relying on low prices or promotions so much, but instead appeal to customers through Influencers' personal brands, content, and storytelling.

Even better, you could turn your eCommerce business into such a marketplace to not only retain current customers and upsell them efficiently but also attract new customers with fresh product collections and long-tail SEO. By using Vendo, your may easily enhance your DTC eCommerce business with a multi-vendor marketplace model, by adding third-party inventory and expanding your product catalog in adjacent product categories.

And here are Shopify's 5 top recommendations for DTC eCommerce brands.

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1. Invest in long-term brand building

• Create a community to gain customer loyalty and collect data about your audience's preferences.
• Turn the most loyal customers into brand evangelists.

According to a survey from Vanilla Forums, 58% of brands have claimed that their communities improve customer loyalty.

Good practice example - Sephora

In 2007, multinational beauty retailer Sephora started its Beauty Insider as a loyalty program before evolving it into a full-blown community that has amassed approximately 5.5 million members. Sephora customers can connect with each other online, sharing their favorite looks and beauty tips. They can also sample new products, ask questions, and learn from one another.

Good practice example - Doe Beauty

The cruelty-free brand Doe Beauty has a private Discord server where members of its community can hang out together, give advice, make friends, and get first access to all new launches. There is also a Doe app where users get unique discounts and can collect points for actions like following other accounts, referring a friend, or making a purchase.

2. Show your customers you share the same values.

According to a survey by Accenture, 52% of shoppers are more likely to purchase from a brand that they share values with.

Be consistent. Make sure that your values are reflected in every aspect of your brand, from the way you run your business to how you treat your customers.

Good practice example - Patagonia

Patagonia is a company that creates trendy outdoor clothing and actively works to preserve the environment. Their "Worn Wear" program asks consumers to purchase and recycle used items, and their "Drive-Less" initiative gives employees bonuses for carpooling or taking alternative forms of transportation to work.

Good practice example - Everlane

Everlane is an eCommerce clothing brand founded in 2010. As a mission-driven company, Everlane believes that transparency and customer acquisition cost optimization should be at the heart of all business decisions. By connecting customers directly with ethical factories, Everlane delivers great quality products at honest prices. Customers are given complete visibility into the real cost of production.

3. Diversify your advertising and sales channels

• Explore new channels to reach new audiences - Are you already using TikTok challenges, Pinterest, or live shopping?
• Consider investing in niche channels with high engagement - Reddit, Discord, Twitch.

Good practice example - brands using AMA (Ask Me Anything) @ Reddit

• SpaceX - Elon Musk hosting an AMA to promote the launch of its BFR rocket
• Audi - various celebrities hosted video AMAs while speeding around in Audi cars on a test track.
• Adam & Eve - this sex toy brand had the company's sexologist host a Q&A session and answer the users' questions about sex. This AMA was so popular that the doctor even went back on the platform to give more advice a few months later.

4. Design a social commerce experience that converts

• Make your content shoppable - use the available social media features to tag your products in TikTok videos, Pinterest pins, Facebook and Instagram images, and stories.
• Get influencers on board - consumers trust their opinions, and collaboration with relevant content creators can be a considerable asset and sales boost for your brand. If you don't have the budget for A-list celebrity influencers, look at micro-level creators with highly engaged niche communities.

Good practice example - Kylie Cosmetics & TikTok shopping

Kylie Jenner's beauty brand was the first to try out the TikTok and Shopify integration, enabling users to shop for the brand products directly on TikTok.

5. Use marketplaces as both sales and marketing channels

There are several reasons why brands should sell on online marketplaces. First, marketplaces are an effective way to reach new customers. With thousands of visitors every day and their cross-selling and product recommendation features, marketplaces offer brands a great chance to generate significant sales volume. Second, by showcasing their products on marketplaces, DTC companies have an excellent opportunity to gain more brand awareness. Finally, selling on a marketplace can add to a brand's prestige or reliability. For example, selling on a luxury marketplace like Farfetch or Net-a-porter can make a brand look more upscale, while selling on a sustainable marketplace can contribute to the consumers finding the brand more trustworthy in terms of its sustainability.

Good practice example - Birkenstock @ Goop

Birkenstock is a footwear brand that has been producing high-quality, comfortable, and stylish sandals since 1774. Besides its online store, it also sells on marketplaces such as Goop or Zalando.

Good practice example - Levi's @ Maisonette

This iconic denim brand does not need an introduction. Its products can be bought directly through the levi.com website, but the company also sells its children's collection through the Maisonette marketplace.

Key advantages of turning your eCommerce store into a multi-vendor marketplace:

1. Increase customer loyalty and retention by offering the convenience of one-stop shopping across many brands and product categories with a single order and payment
2. Increase average order value by offering customers products complementary to your own inventory
3. Boost sales and scale your business with thousands of new products in a dropshipping model without any extra costs of inventory procurement or management
4. Onboard tens of new Shopify brands to your marketplace in minutes
5. Achieve a long-tail audience expansion to multiply organic search traffic with a blue-ocean SEO strategy
6. Gain a new superpower to quickly experiment with new product categories and expand your current audience with new customer segments interested in these new categories
7. Turn eCommerce competitors into partners by adding brands as your marketplace sellers

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