Noukie’s is a Belgian brand specializing in products for newborn babies and children up to 8 years old. Their collection ranges from soft toys and baby clothing to blankets and sleeping bags. Noukie’s is a successful cross-border omni-channel player, selling in over 30 countries. They own physical stores in Belgium and France, run their own webshop and collaborate with marketplaces and e-tailers.
We sat down with Amaury Gilliot, E-commerce & Marketing Manager at Noukie’s to discuss their experience of working with marketplaces, and of course, the impact of the COVID-19 crisis on their business.
Why did you decide to work with marketplaces? Which opportunities and challenges are you experiencing?
"We currently work with 4 marketplaces: Amazon France and Rue du Commerce have broad product offerings, while La Redoute France and Galeries Lafayette are more specialized in the clothing industry.
Initially, our own webshop did not generate a lot of traffic, which led to marketplaces. One of their big advantages is large volumes of traffic and immediate access to many potential buyers.
Another one is price monitoring: if we put a 20% promotion on our own webshop, the marketplace prices automatically follow. Thanks to Neteven, an integrator that facilitates the automated synchronization of information on products, prices and orders from our own webshop and the marketplaces, we have the same price everywhere.
At the same time, selling on a marketplace can be complex and there are several challenges:
- It takes time and effort to prepare the upload of our product range to each marketplace platform. We first need to adapt the structure of our own webshop to fit with the integrator. We need to adapt the product information according to the structure of each marketplace because they each require specific details.
- We need high average basket sizes to cover the fixed costs such as commissions, integration, preparation and delivery costs. On our own webshop, the average basket size is higher than on marketplaces because we use an artificial intelligence technology-based ecommerce tool that serves customers with personalized online product recommendations that will result in more upselling and cross selling, thus boosting conversion rates.
- Advertising on marketplaces can be an advantage as well as a disadvantage. From time to time, we ask our contact at La Redoute and Galerie Lafayette to boost our promotion, or they ask us if we want to participate in a campaign. It’s an easy way of working. With larger marketplaces like Amazon, however, promotions are a huge challenge. We do not have a specific contact person and promotion costs and commissions amount to almost 15% of the revenue."
How do you select the right marketplaces to collaborate with?
"When you try to figure out which marketplaces to work with, it's very much a question of trial and error. We recommend focusing on these important aspects:
- Geographic focus: we mainly targeted the French market because of the large number of potential buyers; the country has one of the highest birth rates in Europe. We steer away from opportunities too far outside of our scope and focus on traffic in the countries that interest us.
- Fit with brand positioning and level of specialization: Because of the strong positioning and image fit with La Redoute, our revenue growth doesn’t require as much work. Looking at Amazon, however, the partnership calls for hard work, although we have access to a large pool of potential buyers. Revenues there are lower because the platform is less specialized in the clothing market.
- Fit with policy: Our policy should be aligned with that of marketplaces. For example, we are not collaborating with Zalando because of their free returns policy. As a small webshop, this offering is just not feasible for us.
- Pricing: Pricing models and the flexibility of price negotiations matter as well. It’s easier to negotiate with smaller marketplaces for whom you have a direct contact person.
- Digital marketing: When a marketplace offers digital marketing as part of their services, everything becomes much more expensive. Keep in mind, however: if you dor't make use of this, you’ll end up at the bottom of all product listings."
What are the main differences when selling through your own webshop versus selling on a marketplace?
"For us, these are the main differences:
- Brand control: On your own webshop, you decide everything from product structure, to advertising and brand image. The level of brand control is much lower when selling on a marketplace: you are subject to their structure and way of working.
- Traffic: The number of potential buyers on marketplaces is a key advantage. You can never have the same volume of traffic on your own webshop. At peak moments, as we are now encountering due to the coronavirus, the stability of marketplace platforms is higher, since they have extended IT support in place.
- Online experience - website UI/UX: The online or digital experience is more advanced on a marketplace platform: the website is faster, more optimized and the customer has more payment options to choose from. The mobile experience is also better on a marketplace – some offer a full mobile first experience or even apps.
- Customer experience: Marketplaces have the advantage that customers can easily browse and purchase articles from many different brands on the same platform. We also offer a good customer experience on our own webshop because the products are better exposed through videos. They’re more clearly explained and the whole brand atmosphere is better.
- Conversion: We can’t control this on marketplaces as they don’t share those data with their partners.
- Customer service: we offer personalized customer service on our webshop. In this digital and automated world, customers appreciate being able to put their question to a real person. We can also help the customer more because we are in control of the logistics surrounding shipping and delivery. We have more information about this than the marketplaces when customers have questions about their order."
What are your top 3 tips & tricks to sell through marketplaces?
- Don’t assume the biggest marketplaces generate most revenues. Find a marketplace that suits your product and is specialized in your product offering.
- Don’t overlook hidden costs. Look at all costs when considering a marketplace: commissions, digital marketing, …
- Don’t underestimate the effort: being listed on a marketplace requires ongoing involvement."
Last but not least: how did COVID19 impact your business and how do you respond to it?
"Most of our revenues come from our brick-and-mortar stores. Their sales dropped to zero in a matter of days, both in France and Belgium. We had already closed our stores ahead of the government-imposed regulations. We made sure our warehouse could operate following the strictest safety and hygiene measures. All pick-up points are closed so we can only do home-delivery, which is more expensive. Store reservations have been put on hold as well.
Evidently, we realized we had to focus all our efforts on the webshop. We took a number of initiatives. We:
- Increased digital marketing and the budget to boost our online presence
- Increased the number of promotions, without being too pushy
- Accelerated projects: we went live with campaigns that were planned for May or June
- Adapted our content strategy. For instance, we launched a drawing contest for the kids to stay busy at home and we give out free soft toys as rewards. It’s important to have relevant content
- Started selling other brands via our webshop, and reach out to new brands. Our customers like being able to choose from a wider product offering but we carefully consider which brands to add: the brand should fit the parent’s customer journey
- Usually we have a physical warehouse sale every semester around this time of the year. We decided to go through with it anyway, but instead turned it into an online stock sale on the webshop
Since the crisis, our webshop revenue has more than doubled, virtually by itself. This indicates that people still want to consume. We see that the pre-natal articles are being sold much more than before. These are “need/essential” products, things young parents really need to prepare: first blankets, pajamas, beds, …. “Want” products such as clothing for age 2- 8 are less urgent and more of an impulse purchase. Sales in this category are going down proportionally, but are still increasing in absolute terms.
When it comes to customer service, customers are more easy-going and have lower expectations than before. They understand delivery time will be slower. Requests haven’t fallen off down though, because customers still want to receive answers quickly.
It is important to note that is we did not want to profit from a bad situation. The increase in online sales does not cover the losses of our offline stores, but we have to make sure we still get as much revenue in as possible because – let’s be honest – every business is just trying to stay afloat in these difficult times."
Thanks to Amaury for the insightful interview! We hope his experience and recommendations have inspired you.
If you need help to increase your online visibility and online sales during these challenging times, don't hesitate to reach out: