Last month, Adidas confirmed that it was pulling merchandise from eBay and Amazon marketplaces as part of a new customer and range segmentation strategy.
A new customer and range segmentation strategy? What does that mean? Well, apparently it means that Adidas wants more consistency and control when it comes to how and where they reach their customers. A spokesperson for Adidas stated, “Our new e-Commerce guidelines will ensure that Adidas and Reebok will be presented in the right environment at all times.”
Is Consistency the Culprit?
Many feel this move by Adidas is the result of brand inconsistencies experienced by consumers when shopping in these marketplaces. Manufacturers often lose a good deal of control over the customer experience when entering a marketplace like Amazon, and that experience can include elements such as signage, pricing and customer support.
Take pricing, for example. Many manufacturers blame Amazon for driving down prices. To combat the issue, some have tried to implement minimum advertised price (MAP) policies, but manufacturers complain that those policies are not easily enforceable.
Wes Sheperd, CEO of Channel IQ, provided a more general statement regarding some of the frustrations felt by manufacturers when selling on third party websites, saying that, “Right now marketplaces just don’t provide enough structure as a channel for manufacturers in their eyes.” With a lack of structure comes a lack of consistency, and for some manufacturers like Adidas, they’re no longer going to tolerate the inconsistencies experienced by customers within these marketplaces, many of which conflict with the overall experience that the brand is trying to create across all channels.
Maintaining Consistency After the Purchase
For manufacturers and retailers alike, whether big or small, creating a consistent cross-channel brand experience can be a big challenge. For Adidas, utilizing the channel marketplace disrupted this consistency, and although Amazon and eBay have hundreds of millions of active buyers, the desire to maintain better consistency outweighed the benefit of selling through this channel.
This consistency doesn’t end at the point of purchase. When it comes eCommerce, many retailers and manufacturers strive hard to maintain accurate brand representation all the way through to the point of order fulfillment, whether that fulfillment is outsourced or handled in-house. This not only means that orders are consistently filled quickly and accurately, it can also mean that the brand is visually represented through packaging inserts, filler and/or boxes, something that isn’t offered by every outsourced fulfillment provider.
At the end of the day, marketplace selling can be a nice supplement to revenue generated through other retail outlets and corporate eCommerce websites. But, as we’re seeing, it can also have significant drawbacks that cause brands to rethink their online selling strategies.