If you want to be successful on marketplaces, you need a strategy. What sounds like a truism quickly becomes
complex in an international organization with a variety of brands, marketplaces and countries.
The subject area of organization, competences, systems, processes, culture is correspondingly important.
We spoke to Jonas Hahn, Head of Online Shop and Marketplaces DACH at WMF, on how to reconcile and
implement strategy and organization for a successful marketplace business today.
Table of content
- For how long has WMF been active on marketplaces? Since when has the topic enjoyed TOP priority?
- Do marketplaces make it today easier for you to implement the premium claim through options such as A+ content?
- How many marketplaces are we talking about then – including country domains?
- So you are quickly faced with 15 to 20 platforms, all of which have different requirements?
- Are you operating as a vendor or a seller here?
- On a scale of 1-10: Where would you rank your marketplace organization in terms of capacity, speed, tech and processes today?
- How do you moderate the marketplace business in an international group with many brands and interdependencies?
- For many years you yourself worked as a manager at Amazon. At WMF you are responsible for a variety of marketplaces. Is this Amazon embossing, the know-how, helpful or hindering?
- Operating on many marketplaces means a lot of touchpoints in the customer journey with questions, reviews and returns. Do you also need automation and clear processes in customer contact management?
- How do the channels and the distribution of tasks in the teams merge? Who does customer service, social media, product management?
- What then is the critical team size for you in the marketplace business?
- That is, you advocate in- rather than outsourcing?
- What is decided centrally, what locally? And what traverses the functions?
- And how do you handle the budgets for the marketplace business?
- You are responsible for a local unit with the DACH region. Do you fight much against the headquarters?
- Finally: What advice would you give manufacturers who are entering the marketplace business now?
For how long has WMF been active on marketplaces? Since when has the topic enjoyed TOP priority?
JH: We have been selling via online marketplaces since around 2016 and the topic has had a high priority in management from the very beginning. After two to three years, however, we realized that we needed a different strategy. Marketplaces are very competitive in terms of price. This is challenging from the point of view of a premium brand. Since 2021, we have been operating with a clear premium claim on the marketplaces.
Do marketplaces make it today easier for you to implement the premium claim through options such as A+ content?
JH: With WMF’s aspirations as a premium brand, this is always a challenge. But we try to implement the presentation on the platforms in as high-quality and homogeneous a manner as possible despite the different content specifications on each marketplace. And of course, we also use A+ content for this, for example on Amazon. It is also very important to us to own the content ourselves, to control the marketing opportunities for the platform ourselves and to have contact with the platform ourselves.
How many marketplaces are we talking about then – including country domains?
JH: In my region DE and AT, we are live today on five marketplaces. Another five to six are planned for the next 1.5 years. But of course, it is obvious that a set-up that works very efficiently in the DACH market also works in the entire EU market. However, we are still discussing how we scale here.
So you are quickly faced with 15 to 20 platforms, all of which have different requirements?
JH: Indeed: This is a very complex and dynamic field of work. That is the challenge we must face. And this can only be achieved if you rely on maximum automation, efficiency and scalability in all areas – from content playback, market observation and billing to logistics and order management. There is no way around good systems and processes. Period!
Are you operating as a vendor or a seller here?
JH: Our goal is to be seller-only on most platforms. But on the two big hybrid platforms, we are also a vendor, or mixed hybrid forms develop. Amazon is the best example here. After some “precious” learnings, we have found a very constructive approach by cutting product ranges cleanly, placing our USPs
accordingly and also not being on the aggressive side with pricing. This is in line with our premium strategy and allows both business models to flourish.
On a scale of 1-10: Where would you rank your marketplace organization in terms of capacity, speed, tech and processes today?
JH: Oh, that’s hard because I have a very high expectation for automation and synergies with other brands in the Groupe SEB. We are by no means perfect, but on a good way and among the other brands in the group in the marketplace business as a whole, WMF is definitely two to three years ahead. And if you ask about the scale: I see us at a six at the moment?! We are currently investing massively, so we will add one or two points on the scale here by the end of the year.
How do you moderate the marketplace business in an international group with many brands and interdependencies?
JH: If the strategy is right and well-coordinated, it all works relatively smoothly. Platform selection and vendor-seller questions are certainly challenging and decisive at the outset. A key to our success is that we then define and assign the product ranges well. As a result, the friction points in the operational business become minimal and you have peace and quiet to build up the channels without interference. The scope of strategic possibilities is now so large that brands can avoid conflicts and collisions on the platforms.
For many years you yourself worked as a manager at Amazon. At WMF you are responsible for a variety of marketplaces. Is this Amazon embossing, the know-how, helpful or hindering?
JH: Having worked at Amazon is both a curse and a blessing. Of course, you know how to implement efficient processes for Amazon and how to think in order for the business model to work. And the pragmatism, the analytics and the speed you learn at Amazon also help you elsewhere. The curse is that Amazon is a totally self-contained ecosystem. There are no systems like ChannelAdvisor, plentymarkets or Zendesk. But to build the best solution for WMF and any marketplace, you need to understand this provider and solution market. All of the things that you’re showing here in the study, including the B2B marketplaces, you don’t see this when you’re working at Amazon; you see
them when you have the chance to develop yourself at a brand manufacturer.
Operating on many marketplaces means a lot of touchpoints in the customer journey with questions, reviews and returns. Do you also need automation and clear processes in customer contact management?
JH: Absolutely. Customer expectations for a premium provider are incredibly high. But the platforms also place high demands on their sellers. Anyone who sends a day late or returns a day late will be punished. And even if a product is only rated with three stars in the long run, the marketplace will contact you. There is no way around automation. Our approach is to bring on board all kinds of tools and helpers that can be connected, in order to take over this task for us or at least to facilitate it.
How do the channels and the distribution of tasks in the teams merge? Who does customer service, social media, product management?
JH: We organize this in a coordinated manner via the established departments, i.e. we rely on the existing set-up of customer service, logistics, product management, product range management, IT etc. The marketplace team sees itself as a business owner who understands the marketplace business – also technically – and carries it into the organization. Including change management, you shouldn’t forget about that.
What then is the critical team size for you in the marketplace business?
JH: Currently we have five FTEs at WMF. In the wider corporation with all its brands, the number is of course significantly higher and intercommunication is very much promoted. If the business performs as we want it to, a team of 10 people is probably more realistic in the future. Because the “agencyitis”, i.e. using and depending on many different external agencies, that we see everywhere is rather bad for digital success. Few companies are good at managing service providers in a dynamic environment and building up internal know-how for the long run.
That is, you advocate in- rather than outsourcing?
JH: I advocate complete in-housing for competence and personnel, extensive outsourcing for tools and programming. WMF aims to be a premium supplier of kitchenware and electrical appliances. No one, including us, can and wants to become the next Amazon. But of course, we have to understand how to best implement the premium approach with the digital possibilities. That means we need to know which platforms are good for us, how we approach the market and what marketing opportunities there are. But we don’t have to build our order management software ourselves. Here we look at the best solutions on the market and customize wherever appropriate.
What is decided centrally, what locally? And what traverses the functions?
JH: The question of an efficient organization in the digital world is a completely new one. SAP and the headquarters cannot exactly regulate this quickly. Today, people want to operate on many markets and marketplaces. And everybody works a little differently. Meeting this complexity is a major problem for a central IT. In the end, we need a set-up that utilizes the advantages of centralization, but also guarantees flexibility and agility on the ground, i.e. a centrally managed platform, but always local execution.
And how do you handle the budgets for the marketplace business?
JH: We have our own group-wide budgets for the entire D2C area and the marketplace business. It wouldn’t work otherwise. And our budgeting within DTC is very performance-oriented: Buy Box and conversion focus. But premium content on social media and marketplace channels does not fall from the sky, but only arises from corresponding people, creativity, hard work and substantial budgets.
You are responsible for a local unit with the DACH region. Do you fight much against the headquarters?
JH: No, in fact, we have to give the headquarters big praise, because they involved us early in the development of the marketplace business. They listen to us, we learn from each other and that’s fun.
Finally: What advice would you give manufacturers who are entering the marketplace business now?
JH: Be sure to automate from the start. If I learned anything at Amazon, it’s that the A in Amazon stands for automation. It doesn’t cost much more, but it makes a lot more possible. Of course, it’s a shame if you have to turn off an automation because the business doesn’t work. But it is really bitter when the business starts and then scaling fails because you cannot keep up manually. In addition, all relevant departments should be involved at an early stage. In concrete terms, this means: Explain to the accounting department how settlement works on marketplaces. Show logistics what is important when delivering an Amazon order. And instruct customer service that inquiries must be answered within eight hours, otherwise you are likely to suffer the consequences. All relevant departments must know in good time what is coming. It’s no fun to explain that “when the shit hits the fan.” The problem in many companies is: There is no glory in prevention. But in the digital world, that is sometimes fatal. And finally, you need the backing of the management. It is never only smooth running in the marketplace business. And then you need everyone on board.
A big thank you to Jonas Hahn for the interesting insights. You can find this case study and many more insights in our Market Place Study 2022.
About the author:
Jonas Hahn has been working in e-commerce for more than 12 years and has been supporting WMF since 2016 in developing D2C business models and make them successful. He manages the online shop and the marketplace business of WMF.