Three months, three highlights, three minutes. Every week at Rich Insight, we compile a list of the top marketplace news stories as part of our Friday newsletter. At the end of every quarter, we round-up the headline story, key marketplace moves and essential Amazon goings-on. Here’s your marketplace round-up for January-March 2024.
Headline Story
Amazon introduces Rufus. In February, Amazon launched the first version of its AI-powered shopping assistant, Rufus, to a subset of its mobile app users in the US. Built on a large language model (LLM) and trained on Amazon’s product catalogue, listing details and reviews, Rufus enables shoppers to ask Amazon questions about particular products in any language, such as ‘how warm is this jacket?’ or ‘are the ingredients ethically-sourced?’
Rufus also harnesses information from the web to answer broad questions like ‘what to look for when buying marathon trainers’ and comparative questions like ‘what’s the difference between marathon trainers and trail running shoes’. What’s more, customers can ask Rufus for recommendations on an activity (i.e. ‘what equipment do I need to run marathons?’) and events like birthdays or anniversaries (i.e. ‘what is a good pirate-themed present for a 5 year-old?’)
At this early stage, Rufus will only provide text answers on a specific product (it will not directly compare products or suggest alternatives) nor will Rufus perform functions like ‘add to wishlist’, but further upgrades are expected over the course of the year. Watch this space.
Marketplace Moves
So far in 2024, it’s been a case of ‘new year, new fee structures’ for some of the world’s largest online marketplaces. In the US, eBay sellers will now need to pay a $0.40 per-order fee on orders over $10 (up from $0.30) while UK and European eBay sellers will face a new regulatory operating fee from 8 April, which amounts to 0.35% of the total sale (including the item price, postage and taxes). Meanwhile, TikTok Shop announced a quadrupling of its 2% referral fees to 8% per order from July 1 2024 (a 6% fee will be introduced from 1 April to ‘ease the adjustment’).
As TikTokShop embraces its online marketplace role, the social media company is also looking to make every post shoppable (with features like ‘find similar items on TikTok Shop’) and have made it easier for UK Shopify users to connect their online store to TikTok Shop. Meanwhile, Etsy announced a new ‘Gift Mode’ using AI to help shoppers find ‘the perfect present’ and is planning to launch a new loyalty programme and thank you coupons.
In other marketplace news, Temu has launched in the US and started onboarding US sellers. In an effort to address declining revenue, Zalando is enabling brands to use its logistics and service capabilities whether they sell on its platform or not. Finally, Polish marketplace Allegro has launched in Slovakia and party marketplace Cazaar (one of our marketplaces to watch last year) celebrated a 400% increase in sales.
Amazon Analysis
Beyond launching Rufus, Amazon has announced some new marketplace-dominating figures. Selling $700 billion of goods last year (+11% YoY), Amazon’s biggest growth area was in third-party marketplace sales, which grew 13% to $480 billion. This growth has been driven by old and new sellers alike with over 50% of Amazon US sales coming from historic sellers (over 5 years on the platform) and 10% from those who’ve joined since 2022.
From adding a new ‘Buy with Prime’ integration that will allow consumers to filter for Amazon Prime-eligible items to launching AI-powered listing generators enabling sellers to create product pages, Amazon has also maintained its flow of new features in the first quarter of 2024. In particular, Amazon has launched its Ships in Product Packaging (SIPP) programme that will give FBA users discounts if Amazon can ship their products without adding Amazon packaging. This is designed to be more sustainable and will also help sellers display their brands to customers. In addition, Amazon will now ship ‘dangerous goods’ in the UK, such as aerosols, and added new metrics on brand awareness and satisfaction.
Finally, ever wondered if selling on Amazon reduces your sales on other sites? Founder of NPD Digital Neil Patel’s recent study into the effects of selling on Amazon found that selling on the platform actually boosts sales elsewhere. Read our analysis here.
Looking ahead: Q2 2024
Seeing as Spring is the season of renewal, it’s a fitting for some of the first marketplace sales events of the year. Etsy has announced its Spring Refresh (11 March - 15 April), Mother’s Day (1 April - 12 May) and Father’s Day (13 May 13 - 16 June) sales events (the latter two coincide with the US dates if you were wondering). Amazon also held its first sales event in March, but all eyes will be on the announcement of the first Prime Day of the year (last year was July 11-12).
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