It's no secret that it's tough out there for brands. With economic uncertainty, rising customer acquisition costs on platforms like Facebook and Instagram, and supply chain nightmares, it's more important than ever for brands to find new, profitable channels.
But the reality is that a significant percentage of brands still acquire customers unprofitably: for the average brand, only 30 of every 100 new customers will return to shop.
For the average brand, only 30 of every 100 new customers will return to shop.
With this acquisition formula inherently broken, most brands turn to another option for growth: launching new products. Investing in new offerings isn’t as easy as any brand would want it to be, though. With costly upfront investment, a brand really has to know its customers and market to make the right bet.
So, what's the solution? How can brands grow without investing in leaky channels or making capital-heavy product decisions? The endless pursuit of customer value.
Introducing a new way to boost customer value
When we talk about the pursuit of customer value, we mean focusing on both acquiring new customers and generating more customer loyalty through increased LTV (lifetime value), retention, and AOV (average order value). And we’re talking about a way that isn’t constrained by your current product catalog.
Enter marketplace selling: merchandising trusted brands, alongside your native products, and growing your pie. It means transforming your site from a mono-brand site to a curated collection of complimentary products, creating more opportunities for customers to engage with your brand.
It means transforming your site from a mono-brand site to a curated collection of complimentary products.
Selling 3rd party products empowers brands to:
- create more marketing content, with more opportunities to speak about
- secure better domain authority through SEO benefits of selling popular products
- build bigger baskets and better conversion through increased inspiration
In other words – all the benefits of launching new, relevant, and interesting products without the risk of launching the wrong ones. Brands like Fellow, Hello Bello, and YUMI are all doing this with Canal, as a way to push their brand’s narrative beyond product selling to true category influence.
In the case of Fellow, they’re able to continuously release interesting 3rd party products through their coffee marketplace, keeping their current customers coming back for more and driving new traffic to their site through selling popular coffee brands. The result? Continuous investment in customer value in a way that up levels them from gear to coffee tastemakers.
The result? Continuous investment in customer value in a way that up levels them from gear to coffee tastemakers.
Driving results by meeting customers where they are
But small brands aren’t the only ones paying attention to this. Amazon's "unlimited shelves" are a perfect example of this: 35% of marketplace revenue comes from product recommendations, and they boast a 10% website conversion rate (versus the industry average of 2%).
And it makes perfect sense: they’re making it super convenient to find and shop for products on consumers’ minds by creating content that converts. This opportunity to sell more products means more users who are more engaged, making them more likely to buy your first-party products too.
This opportunity to sell more products means more users who are more engaged, making them more likely to buy your first-party products too.
The average shopper buys across over 20 destinations in a year, so every brand's shoppers are buying other complimentary products. The ecommerce industry is growing, and there are more options for shoppers every day – the key is to capture their attention, give them what they want, sell them the products they're looking for, and become a destination. Let your brand transcend your own products.
And in recent weeks, we’ve seen more key players affirm that this is a crucial strategy for brands looking to stand out in DTC. Shopify released its newest feature, Collective, which allows brands to partner together to sell inventory-free in a small set of categories.
We tried this, too. Since having launched dozens of marketplaces for brands, however, we’ve learned what was missing from this equation: the power of curation on top of the technology.
So, how can you start selling more products? It requires two core ingredients: trusted technology and a curated network of brands ready to partner with you.
The dropshipping solution for modern brands
If you’re reading this far and wondering, Is he talking about dropshipping?, you’re on the right track.
Unfortunately, the dropshipping options of the past were horrible. Brands who’ve dropshipped often had to deal with unsynced inventory, rigid shipping functionality, and impossible-to-edit partnership economics.
But Canal has spent years solving these deep, complicated technical problems. For instance, we offer dynamic shipping — and are the only platform to have created this — built for the most bespoke arrangement between brands.
If you’ve ever dropshipped or thought about selling 3rd party products, you also know how difficult it can be to find quality brands whose values align with your own. The real magic of Canal comes in with our network of brands.
Connected by our app, our catalog of premium DTC brands reflect what consumers want to buy. Every brand in our network is handpicked and approved by our Curation experts, ensuring brand quality, product quality, and fulfillment reliability.
But knowing who to partner with is also critical. With Canal’s human-led Curation services, you’ll get dedicated guidance on who to partner with, for every brand moment. Our Curation experts partner closely with you, to understand your brand, your customers, and what they're looking for. From there, they matchmake you with the best brand partners for you.
With Canal’s human-led Curation services, you’ll get dedicated guidance on who to partner with, for every brand moment. Our Curation experts partner closely with you, to understand your brand, your customers, and what they're looking for.
Best of all, the Canal network is open to brands of all platforms. Sellers should never need to know whether their desired partner is headless, on BigCommerce, Shopify, etc. Additionally, we’ve made is incredibly easy to invite your existing brand partners, as well as find new ones to connect with, without the headache of complicated onboarding.
Tapping into your customer value with Canal
So, what does the future of brand partnerships look like? An integrated, interconnected ecosystem of the best brands across all ecommerce platforms whose shared customers are buying the right products at the right time.
A premier, trusted network will emerge that all sellers will turn to when looking to sell more products because their shoppers deserve the best products, and the best products define this network.
The winning brands will be the ones who can best activate that network through curation. So, start pursuing customer value endlessly, and with trusted dropshipping technology and a trusted network, you'll be on your way to success.