A search for “school bag” on Flipkart will give you 64,882 results across 4444 brands. This is the democratisation effect of e-commerce platforms like Amazon, Flipkart, Taobao (in China), Rakuten (in Japan), Mercado Libre (in Latin America) and others. They create a business environment that benefits millions of independent sellers, consumers, and manufacturers. Sellers on these platforms are heterogeneous, with large, national suppliers competing for attention with smaller, local start-ups. As the popularity of these platforms grows exponentially, large brands and suppliers invest substantially in developing marketing capabilities and brand reputation. The question arises then how these two factors, which play a critical role in traditional marketing, help brands distinguish themselves and capture consumers’ wallet share. A study based on data from a leading online retailer attempts to answer this question by examining the role of seller marketing capability and brand reputation in the consumer journey process.
The term consumer journey refers to the steps in the purchasing process. Unless a brand or product can retain a consumer’s attention/interest at each stage of this journey, it cannot expect continued sales and revenue from that consumer. For online purchases, the journey consists of browsing for a product, clicking on a particular brand/option, deciding which option to purchase from the many available, purchasing that product, and post-purchase experience.
The study found that brand reputation has a complex relationship with the consumer purchase journey in the online retail environment. For browsing time, clicks, and purchase, it starts by promoting sales but then loses its impact because of a higher variety of products offered online, lower costs of off-brand or generic products, difficulty in achieving unique presentations, and private labels of e-commerce platforms being given priority.
Marketing capability, on the other hand, has a positive impact on consumer journey outcomes. Marketing capability, simply put, refers to the ability to convert customer feedback into higher sales. Firms with high marketing capability can anticipate customer needs better based on their reactions, which often take the form of reviews, and translate these reactions into better products and service experiences. They also handle complaints better and have a finger on the pulse of the market at all times.
The study found that sellers who have higher marketing capability have a direct connection to the steps leading to and including sales and a negative one with post-purchase frustration. They can achieve up to 80% higher customer purchase likelihood compared to sellers with low marketing capability. They can also achieve up to 61% lower post-purchase frustration among consumers.
The study has relevant managerial implications for sellers on online platforms. They should devote more resources to enhancing their marketing capability through obtaining and implementing feedback instead of spending only on tactical efforts to increase sales. They can promptly follow up on negative customer feedback and modify products based on it, as did Arnigo, a new player in the FMCG sector that manufactures dishwasher consumables. They can also follow the example of giants like Procter & Gamble to create teams to monitor brand-related news and consumer reactions in real-time and quickly react to market information. Finally, they can establish robust production and supply chains to respond to consumer feedback in the shortest possible time.