Katie Searles sat down with Ed Bradley, CEO of Virtualstock at their first Vision Summit, to discuss range expansion, new collaborations and the benefits of dropshipping.
Following his opening keynote, in which Bradley covered Virtualstock’s history (how its 2013 partnership with Tesco shaped its technology offering), the risks and benefits of dropshipping as well as harnessing marketplaces, Bradley stressed the need for curated range expansion.
“Retailers can’t simply have 20,000 products on your site anymore, you have to have half a million at least – you need to really expand the range,” he said.
“Amazon sells so many different products and it has become known as the place where you can get everything. But there is the quality aspect that’s missing with a huge marketplace like this. What retailers bring to us – and what consumers know John Lewis for, for example – is trust.”
Bradley noted that the sense of trust consumers have when shopping in physical stores is also felt online. To maintain this while expanding into other products, the industry will start to see more retailer-on-retailer partnerships.
He used the example of a general merchandise retailer that doesn’t sell food therefore would not be an expert in allergies, nut content etc. But by outsourcing to a big, authorised, well-known retail grocery store, consumers can trust that the provenance of the product is going to be correct. Such a pairing is The Range selling Iceland food products.
“We recognise these brands, and because we recognise them – we trust them” he explained.
Retailers are therefore being given “permission” by consumers to branch into categories they previously wouldn’t have stocked.
They may get less gross margin from the dropshipped products, but Bradley continues “as they are not stocking it and none of it’s going to become obsolete, the net profitability of the product is going to be just as good, if not better, than the stocked products.
“You can sell an extended range beyond the products that you are known for. So it almost doesn’t matter what the profit is because you’ve never sold that product before.”
Hear more from Virtualstock on 09 October 2024 at ChannelX World. David Stobie joins a panel session at the dedicated marketplace event.
Registration is open now! With Retail MediaX and SubscriptionX also returning as part of the Autumn Festival.
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