Article

Customer service in the online marketplace: How retailers can cater to shoppers

Good customer service can be the greatest sales asset a retailer can have, encouraging loyalty and word-of-mouth recommendations. But bad customer service cannot only foster a particular sale lost in an instant, but long-term irreparable damage to the brand.

December 1, 2015

By Adrien Nussenbaum

Customer service is an indisputably important factor when it comes to online retail. Good customer service can be the greatest sales asset a retailer can have, encouraging loyalty and word-of-mouth recommendations. But bad customer service cannot only see a particular sale lost in an instant, but long-term irreparable damage done to the brand.

With more and more retailers launching online marketplaces as a way of expanding product range and opening a new e-commerce channel, how can customer service be maintained on a marketplace? In a survey of British online shoppers last year, more than six in 10 shoppers said they had bought from an online marketplace in 2014, but more than 25 percent said customer service would be a concern when buying from an online marketplace.

So that begs the question: what constitutes good customer service on an online marketplace and how can retailers ensure sellers deliver it?

The rise of the online marketplace

Amazon Marketplace is responsible for more than half of all products sold on Amazon. This means Amazon accesses additional e-commerce channels without inventory or logistic constraints, a model that is proving attractive to many other retailers. The past few years have seen some of the world's biggest and most well-known retailers launch their own marketplaces, such as Best Buy Canada. It's a model that makes sense for the retailer, consumer and the smaller sellers that trade via marketplaces.

But it's important to ensure the retailer's existing service levels are met within the marketplace environment. A retailer may have spent decades positioning itself as a trusted brand, known for the quality of its customer care — it doesn't want to throw that away because some of its marketplace sellers cannot meet that standard.

The customer experience must not differ on a marketplace. That partly explains the ongoing success of Amazon Marketplace. The customer experience remains 100 percent Amazon, with any customer buying via the marketplace knowing Amazon is responsible for any issue that might arise. Sometimes, people do not even register a product is coming from a third party seller and not from Amazon.

Seller recruitment

Part of maintaining customer service levels is addressed initially, when a retailer first begins recruiting sellers for its marketplace. There is due diligence to be carried out (by the seller and retailer), making sure both parties are right for each other. If a seller has mixed customer feedback already, then that's probably a good indicator that they might not be right for your marketplace.

But once a seller has been recruited and on-boarded to the marketplace, we have found that with a number of customers, the level of quality of service is equal to, and sometimes even greater than the retailer itself.

Firstly, marketplaces are competitive. There are numerous sellers, sometimes selling fairly similar products. One point of differentiation is price, but another is certainly customer service. There is great cache to being listed as one of the number one sellers on a marketplace. Customers see you first, and you rank highly in searches. One of the ways to reach this status is via customer service, so sellers really go the extra mile to ensure customer service is as good as it possibly can be.

Furthermore, marketplace sellers are usually specialists in their sector and have mastered the logistic process for their products. For instance, a cake maker, selling via a foodie marketplace, will know the challenges that come with sending cakes and associated goods in the mail because it has extensive experience. There is no learning curve, so customers buying via the marketplace get excellent service from the outset.

Marketplace KPIs

A good marketplace will also have a number of KPIs in place to ensure the retailer retains full control of the quality of service. The retailer should be able to monitor areas such as incident rates and shipping times, so it has good visibility of its sellers' performance in key areas of customer service.

There is also the chance for the retailer to set minimum service levels for each seller to reach. If these levels are not met, then the retailer has the option to suspend or remove the seller. Most sellers don't want to lose such a good opportunity to sell their products, so will do everything they can to meet the service levels required. Alternatively, a retailer can also reward sellers that exceed the service levels, by giving them a 'premium' seller status, held only by highlighted or featured sellers on a marketplace. 

Marketplaces have an undeniably positive impact on the customer shopping experience as they allow a better choice of products, competitive prices and quality service. Customer service is top of mind for many retailers when they launch a marketplace, but in reality, there is little to worry about. Instead, retailers should concentrate on finding the right sellers with the best product to complement, expand or enhance their existing range.

Adrien Nussenbaum is the U.S. CEO and co-founder of online marketplace providerMirakl,an SaaS company focused on helping customers develop e-commerce marketplace platforms for their businesses.