New Study Commissioned by Nautical Commerce Provides Blueprint for Building and Scaling Thriving Marketplaces
Nautical Commerce announced today the availability of a comprehensive new study that does a deep dive into the business case for marketplaces. Titled “Marketplace to Market Share: High ROI Builds a Business Case for Marketplaces,” the commissioned study conducted by Forrester Consulting on behalf of Nautical Commerce provides valuable insights into the motivations behind building marketplaces, the technology considerations, challenges faced, and the significant business benefits such as revenue generated from successful implementation. The comprehensive study is available online.
“This study substantiates the frustrations businesses experience with launching a marketplace, as well as the real potential for positive outcomes across an entire organization,” said Ryan Lee, founder and CEO of Nautical Commerce. “It is clear that many companies have needed to invest a significant amount of time, resources, and head count to launch a marketplace. However, the study also affirms the pivotal role that marketplaces play in driving overall business success, as evidenced by respondents experiencing remarkable double-digit growth in revenue and average order value (AOV). Both the challenges and benefits underscored in this study are the foundation for why we created Nautical.”
Key Findings From the Independent Study
Revenue Growth a Key Motivation for Launching a Marketplace: Marketplace platforms affect nearly all parts of a business. The impacts delivered are substantial, from buyer experience and revenue growth to process improvement. The study, which highlights the varied reasons why businesses made the decision to launch a marketplace, notes revenue growth as a key outcome. Of the 92% of respondents that noted revenue growth as a key factor, 52% agreed it was “very important.”
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The Impact of Marketplaces on Business Outcomes: The study provides compelling evidence of the significant impact marketplaces have on overall business outcomes. On average, businesses experienced 44% growth in customers, 42% growth in revenue, and 36% growth in average order value (AOV) year-over-year after launching their marketplaces.
Build vs. Buy — Challenges and Cost Considerations: The study sheds light on the challenges faced by businesses that choose to build their own marketplace technology vs. purchasing a vendor solution. These include encountering adoption challenges both internally and for third-party sellers. Most respondents agreed costs and time to launch were higher than initially anticipated, with those marketplace operators that took an internal build approach facing higher costs. Of note, businesses that developed their marketplace in-house were 43% more likely to spend $6 million or more on the build compared to those who opted for vendor solutions.
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Approaching Marketplace Technology: When it comes to marketplace technology, the study notes that decision-makers have specific preferences. According to 78% of respondents, a cloud-native architecture is an essential feature of a marketplace platform with cost predictability, quick deployment, and scalability making it a natural choice. With advancements in technology, marketplace platforms have also become more turnkey than ever before, freeing up resources to focus on the differentiating factors that set businesses apart from their competition. The study emphasizes the value of experienced technology vendors in navigating adoption and launch challenges, thereby minimizing friction throughout the process.
