Tradebyte & Outletcity Metzingen: Successful launch into the marketplace business

A few weeks ago, Outletcity Metzingen’s new online marketplace went live. What makes it special is that it is the first outlet marketplace in the premium segment to have evolved from brick-and-mortar retail. The marketplace specialist Tradebyte is responsible for building the marketplace and implementing the brands.

Outletcity Metzingen is a shopping outlet in a class of its own. More than 130 premium and luxury brands can be found here, including Burberry, Fendi, Gucci, MCM, Michael Kors, Nike, Prada, Polo Ralph Lauren, and the world’s largest Boss outlet. A true-to-the-original design of the stores emphasises the premium character: customers should feel as if they are in the brands’ own flagship stores. The new, curated marketplace is now designed to help extend the stationary appeal of Europe’s largest outlet centre, with more than four million visitors from 185 countries annually, to e-commerce too. “The aim was to create the lowest possible risk opportunity to generate additional sales, to be able to connect new product ranges, and to strengthen the appeal and reach of Outletcity’s online channel,’ explains Carsten Feiler, Head of Marketplace Solutions at Tradebyte.

Integration into the existing wholesale business

Outletcity Metzingen’s roots lie in wholesale and stationery retail. In 2012, the launch of the online store by Holy AG, the operator of the outlet, laid the foundation for the digitalisation of the business. The challenge now for building the marketplace business was to integrate a new business model into an existing wholesale business. “This means that large parts of the organisation have to be adapted,” Feiler continued. “A process that is often underestimated.” Legal issues must be clarified, and the IT infrastructure, customer relationships and existing processes must be taken into account. In addition, it is important that third-party articles are prepared in such a way that they meet the requirements of the store content structures, thus ensuring a homogeneous customer experience.

Support for further growth

Tradebyte’s service does not end with the establishment of the marketplace and the provision of IT. In fact, it really starts just now. Four brands went live in the launch phase, and now the aim is for more to follow. The plan for the future is to offer around 30 percent of the goods using the marketplace model. Not only brands that are already represented with a stationary store in Outletcity are eligible, but also new brands and new product ranges, such as jewellery, watches, beauty and home & living. The Tradebyte tool TB.One, to which more than 700 brands are already connected, using it to run their marketplace business, is helpful for onboarding. Together with Outletcity, Tradebyte has defined a particularly scalable set-up, allowing the retailer to use the existing Tradebyte customer pool while also implementing the standardised connection of new luxury and premium brands. How much support the respective partners require can be agreed upon individually. Tradebyte offers various integration services for this purpose, from self-service to an almost fully comprehensive managed account service.

Carsten Feiler, Head of Marketplace Solutions at Tradebyte, on the new project:

Mr. Feiler, why is it interesting for brands to choose the marketplace model?

Carsten Feiler: We have seen for years that the wholesale market is stagnating. Growth is taking place via e-commerce and primarily via marketplaces. This opens up new growth opportunities and also offers small brands a wide reach. Small brands in particular are finding it increasingly difficult to manage the complexity of e-commerce and the various marketplace models on their own. Service is therefore playing an increasingly important role, and new service providers are emerging to take over these processes. In addition, marketplaces create access to the customer. This is becoming increasingly important, especially for brands that have previously reached their target group through wholesale business alone.

Outlets and marketplaces were not always viewed only positively in the retail landscape. Has that changed in the meantime?

Definitely, yes. The willingness to go to marketplaces has increased, and this has accelerated matters. A large number of brands are now represented on a wide variety of marketplaces. However, there are major differences in the depth of the business. For 80 to 90 percent of brands, it’s still just a matter of connecting new channels. Very few have already reached the point where they are optimising their marketplace business, and thus fully exploiting it.

To what extent are you still involved in the Outletcity Metzingen marketplace now?

We offer consulting with different business models. We started with a few brands to test the processes and gain experience. We then entered the scaling phase with 20 to 30 brands, monitoring the brands and optimising the marketplace business. This means that we support the marketplace and its brands beyond the purely technical phase; instead we help to find and connect new partners and also to further optimise the entire business.

What was special about this project for you?

Until now, we have been known primarily as a provider of integration solutions for marketplaces. With Outletcity Metzingen, we have once again shown that we can also build marketplaces ourselves with our own TB.Market solution. This combination of competencies makes us quite unique.

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