The problem with channel lock-ins
The ecommerce space has seen rapid expansion since the pandemic. As physical retail stores were forced to close or halt operations in the physical space, global retail ecommerce experienced an increase from 14% in 2019 to 17% in 2020. Recent estimates suggest that ecommerce will register more than $6.5 trillion in sales by 2023, representing 22% of global retail sales. To capitalize on this, ecommerce business owners will benefit from rethinking their channel strategies and focusing on building their brand.
Most customers begin their shopping journey on Amazon . These shopping searches don’t often get extended to the rest of the web and are why marketplaces and social platforms are so popular with online shoppers and business owners.
While setting up a primary shop on Facebook , Amazon or eBay is simple. Businesses can spend months or years trying to perfect their channel strategies. Since they offer simple, structured approaches to inventory management and sales and access to a broad pool of customers, such platforms are attractive to those just starting their ecommerce venture.
With each platform requiring a dedicated strategy , business owners typically concentrate on just one or two channels. If a business manages to dominate the buy box on Amazon or master Facebook advertising, investing more effort in the successful platform makes sense. This leads to vulnerability as businesses become locked into ecosystems. The problem with channel lock-ins
Business owners protesting channel lock-ins and market dominance by a central platform is nothing new. As conglomerates have managed to corner the online market, small retailers leveraging these marketplaces have seen their profits decline. Data shows the number of small retailers has fallen by 65,000 between 2007 and 2017 as Amazon has grown. Marketplaces also impede the ability of small businesses to operate independently as business owners are prevented from having […]
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