The last part of Catalyst UK - play.com, DSRs, consumers, etc.

Tuesday afternoon we concluded the UK ChannelAdvisor Catalyst event with a flurry of activity.

Play.com's head of their marketplace (called PlayTrade), Luke Taylor presented an interesting overview of PlayTrade.  This is another datapoint in a trend we are seeing in the States that was started by Amazon - the addition of third party marketplaces to internet retailer sites.

In fact, Play.com is very analogous to what we saw with buy.com in the US. These retailers have spent lots of time and effort carving out a brand and customer base in specific categories and now are looking to leverage 3P to add new categories and explode selection.

What's the play?

Luke revealed some interesting elements of PlayTrade:

• Play was started in 1998, by some Jersey boys (and not the Bruce Springsteen variety)
• Play is the third largest online retailer in the UK, second only behind eBay and Amazon
• They enjoy 7.6m registered users, of which 3m were active in the last year.
• They did approx £340m in sales (that's like a zillion $ US with the current weakness in the dollar ;-) )
• They are primarily a media seller (book/music/video/games)
• They soft-launched third party in 2006 and then really opened it up in Q107
• GMS is in the tens of millions of £ in the first years
• 10 sellers or more are projected to do over £1m turn over

Play believes they offer merchants the following benefits:

• Bring customers to the site - play.com will spend over £8m to bring customers
• Strong IT infrastructure
• Every claim is reviewed by a human to protect the seller - they have merchant-oriented dispute resolution
• Every ProTrader is given an account manager - so lots of relationship/human touch
• They treat sellers like partners and recognize/appreciate that it's the sellers that are making the 3P a success.
• Merchants gain easy access to the £7B UK media market and buyers
• Zero risk.  They didn't mention specifics on fees, but did say there is no listing/subscription fee
• He talked about the importance of repricing and being competitive
• Their goal for PlayTrade is for it to exceed their retail business in < 10yrs
• They manage sales in UK+EU and deal with the currency/CBT issues
• There's some kind of reward system called PlayFunds that sellers can earn and are then able to buy items on Play.com with those funds.

DSRs

After Play, I ran a DSR workshop with a TnS rep (Richard) from eBay that was very interactive.  A couple of differences that came out between the US+UK of note:

• BestMatch in the UK does disadvantage sellers with low DSRs, but currently does not advantage like the US does.
• Richard highlighted that while PS'ers don't get that benefit, the seller fee rewards are much higher in the UK.  It's interesting to see eBay testing different fee/benefit/disadvantage schemes globally to learn what works best and it's important to keep up with as it can be a harbinger for the future of each market as they adopt the best schemes.
• The top tier of seller's in the UK are in the 4.6 S+H cost DSR.

We reviewed some DSR best practices and took quite a bit of Q+A.  As in the US, business sellers in the UK are resolved that DSRs/BM are here to stay and working on improving their businesses to take advantage of the monetary benefits.

UK Internet consumers

For the final session, we hosted 8 internet buyers of different demographics from around London.  This was very interesting and here are some highlights I jotted down:

• 7/8 use google to shop online
• Several buyers had a bad ebay experience at one point that caused them to be reluctant to shop there again.  (this jives with my feeling that eBay must do more about guaranteeing transactions)
  • One lady bought a £50 item and it didn't arrive and she could't get through the eBay refund process - a very common problem I hear about from consumers.
• Most buyers would not by from a small retailer, UNLESS it was less expensive or took something like PayPal.  PayPal seemed to make them feel better about using the less known brands.

It's a Wrap
Catalyst UK was a huge success, with registration up over 2X+ last year. Thanks to the CA UK team for a great event and to the all the attendees for taking time out of your busy schedules to learn more about multi-channel online selling.

Comments

[Sola Akinfie]

Dear Scott,
I'm based in the UK and am putting together a free sheet based on the internet world. I would like to explore devising your content for our print magazine,or have you as a writer or researcher. I LOOK FORWARD TO YOUR RESPONSE.
Cheers
Sola
businesscatalystuk.com /Reach Media UK

[Dan @ vzaar]

Thanks for your posts on Catalyst UK and thanks to CA for hosting such an engaging and successful event. We all thoroughly enjoyed it.

The DSR session was great (have you published your top 12 tips anywhere?) and the play.com 'case study' really demonstrates the (even more) fragmented future we can expect ffrom ecommerce.

What struck me most of all, from presentations and attendees, was the opimism and bullishness. We may be entering a period of economic difficulty (not quite a recession yet, this side of the Atlantic) but there was little doubt that online businesses felt they still had room to grow. which is great news.