New survey finds online marketplaces are essential growth engines to expand customer base, offer new and improved services, and enhance profitability at scale
Pax8, the leading cloud commerce marketplace, announced the findings of its new global survey, commissioned by Channelnomics, of IT solution providers on the marketplace trends that are transforming the future of digital sales in the channel. Entitled, “Digital Sales Evolution in the Channel,” the report reveals nine out of 10 respondents are experiencing significant benefits of marketplaces and highlights opportunities to tap their customer data analytics and scalability to unlock new and recurring revenue streams.
“As solution providers look to marketplaces as the sales channels of the future, they are best served by platforms with comprehensive e-commerce solutions that expand their digital capabilities, deliver a seamless online sales experience and maximize opportunities for upselling and cross-selling,” said Ryan Walsh, Chief Strategy Officer at Pax8. “The Pax8 Marketplace is designed to help partners unlock more sales opportunities and enhance relationships with their customers, providing them with the infrastructure and resources to drive profitability at scale.”
Unlocking the Transformative Potential of Marketplaces
Embracing the digital economy, more than one-third of solution providers globally generate more than 20% of their revenue through marketplaces. Further, the survey revealed 87% of respondents expect their use of marketplaces to increase in the next five years. Respondents in North America and Europe, where digital infrastructure and fulfillment systems for marketplace activities already exist, echo this sentiment.
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The emergence of marketplaces as growth engines enables solution providers to expand their reach, enhance profitability at scale, and offer new and improved services to customers. Among the vast potential that marketplaces offer, include:
- Reaching larger audiences and demographics with minimal overhead, while driving sales volume and scalability simultaneously: The scalability of marketplaces enables providers to offer their product and services to a global market, unlocking new business opportunities, including increased profitability (46%), higher demand for professional services (45%), and better customer data analytics (38%).
- Focusing sales strategies on the customer experience to sustain growth, specifically prioritizing customer retention and satisfaction: Globally, more than half of survey respondents (51%) are upgrading their sales technology and developing new partnerships (51%) and expanding their specialized services (46%) to provide a better customer experience.
- Evolving GTM strategies shaped by customers buying preferences and behaviors: Three-quarters of respondents acknowledge that customer feedback about marketplace purchases is influencing their decision-making. Further, 46% of solution providers in North America report that customer feedback influences their decision making; 34% providers in Europe and just 18% in Asia-Pacific share this sentiment.
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Key Considerations for Marketplace Adoption
As marketplace adoption comes into focus, solution providers are navigating a range of factors that can impact their success, from cost-savings to technological compatibility. Among the key considerations highlighted in the report include:
- Prioritizing cost-effectiveness in the strategic development process: Nearly half of global respondents prioritize cost-effectiveness when developing their marketplace strategies, assessing costs related to fees, commissions, and marketing spend. Balancing incoming expenses against new revenue and growth streams are critical for maintaining scalable profitability.
- Powering decision-making with advanced analytics: Digital sales platforms provide vast information about customers purchasing history and anticipatory needs through order consumption pattern analysis, data telemetry, and gap analytics. By leading decision-making with data-driven insights, solution providers can drive future sales and improve customer experiences.
- Boosting sales with a user-friendly platform: A user-friendly marketplace enhances the experience for both solution providers and their customers, facilitating more transactions. Choosing a platform that offers an intuitive interface, efficient search functions, and easy product management can reduce technical barriers, boost profitability and maximize returns from technical infrastructure investments.
“Marketplaces are becoming indispensable to managed service providers (MSPs) to scale more efficiently, tap into valuable customer insights, and drive new revenue streams,” said Larry Walsh, CEO and chief analyst at Channelnomics. “Our survey’s findings highlight the growing importance of digital sales platforms in transforming go-to-market strategies and optimizing the customer experience. As digital commerce evolves, MSPs should embrace these platforms to ensure long-term growth and profitability.”