Before third-party SaaS platforms like Shopify and BigCommerce existed, claiming an online presence was already a heavy burden for merchants. So was integrating with third-party sellers to get more distribution. In the end, it left the playing field to major retailers like Walmart and Target and of course e-commerce giants like Amazon, all of which had the ability to bring convenience, convenience and variety to consumers.
Fast forward to 2023, and the retail industry has evolved tremendously, with more solutions becoming available to retailers of all sizes and industries, enabling them to offer a much more diverse variety and well-rounded customer experiences. That accessibility caused a movement.
Now specialty retailers are looking to further capitalize on their niche by becoming platforms themselves and giving distribution to third parties by enabling them to sell to their customer base.
Last month, arts and crafts retailer Michaels launched its third-party marketplace featuring products from a curated selection of sellers, expanding its product range from 250,000 to over 1 million SKUs.
The specialty store also noted that it would accept applications from sellers who want to enter product categories such as diaries, soap making, candles, arts and crafts supplies, toys and yarn. The venture is strategic in that it allows customers to consider other options while remaining on site.
“The launch of Michaels’ curated arts, crafts and decor marketplace is the next phase of our ongoing digital transformation to become the destination for all creatives to find inspiration, learn, shop and create,” Michaels Executive Vice President of Marketing and eCommerce Heather Bennett said in a press release. “By more than quadrupling our online range in categories including candle and soap making, leatherwork and more, Michaels will ensure that every customer can find what they need to bring their creative dreams to life, regardless of their craft. “
Bridal retailer David’s Bridal also launched its own third-party marketplace in January, with a different take. Rather than allowing businesses to offer the same types of products as wedding dresses, bridesmaid dresses, footwear and accessories, David’s Bridal seemed to offer a natural extension of its service with the launch of Pearl, a planning platform and supplier marketplace designed to help brides finding locations, photographers and caterers, among other things.
“Brides told us they wanted easier planning tools, a more seamless experience from planning to buying the dress, and more ways to earn Diamond points,” David’s Bridal CEO Jim Marcum said in a statement. “Pearl also addresses pain points and gaps in market couples’ experience when planning their wedding.”
Full integration is part of a complete consumer experience. Pearl by David’s appears to complete the wedding day experience for consumers, but it also taps into a larger strategy for the company: customer loyalty. The retailer has included Pearl in its loyalty program, a core offering launched during the pandemic, offering consumers the same incentives they would receive with a regular David’s Bridal purchase.
Bloemschikbedrijf 1-800-FLOWERS is another specialty store inspired by the potential of external marketplaces. The flower company launched its own solution called the Personalized Gifts Marketplace, a platform that offers gift items from local sellers. But it recently launched an expansion of its offerings with Things Remembered, a solution that offers consumers innovative personalization options for products available through its eCommerce platform.
“The addition of Things Remembered is highly complementary to Personalization Mall and will meaningfully grow the number and expand the variety of personalized products we can offer our customers to celebrate any occasion with personalized masterpieces. This addition is a perfect example of how our eCommerce platform is built for rapid growth as we seamlessly integrate complementary brands into our platform,” said Chris McCann, CEO of 1-800-FLOWERS, at the launch.
A win for both sides
These marketplaces benefit both retailers and third-party sellers. First, David’s Bridal informs its sellers that their marketplace “accesses 92% of brides in the US,” and that storefronts can be created in less than five minutes. After publication of the shop window, interested consumers can buy from those sellers.
Overall, these moves from David’s Bridal, 1-800-FLOWERS and Michaels follow cues from major players like Walmart and Amazon, both of which have claimed significant presence in the outside market. In fact, by May 2022, Walmart’s marketplace is said to have surpassed 150,000 sellers, representing a 66% increase over the number recorded a year earlier.
Walmart has also recently tried to entice third-party marketplace sellers with new incentives, including offering a limited-time offer to new US-based sellers: a commission rate reduction of up to 25% for 90 days when they launch on the marketplace and various tools and services.
Meanwhile, according to reports, nearly 60% of units sold on Amazon come from third-party sellers. But recently, the large third-party presence has led consumers to question Amazon’s tactics and product overload, some say, has left the platform cluttered. Others say that it has only made the platform more attractive because the product range is so extensive.
Note that arts and crafts store Michaels has launched its program with caution, taking the opportunity to promote quality with its invite-only program. While the approach may seem restrictive to potential sellers, it allows Michaels to maintain brand control by ensuring that products sold in the marketplace align with the company’s mission and provide an experience that customers expect from the retailer. This includes both the quality of the product and the service. Sellers can also trust that Michaels has taken brand safety into consideration.
Overall, if done right, both specialty retailers and merchants can benefit from the solution, with retailers expanding their targeted consumer experience and merchants potentially facing less competition in the marketplace and having peace of mind that their products are being offered alongside other merchants. of the same quality and size.
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