Does every online retailer need to have a third-party marketplace?
Hudson’s Bay, Lands’ End and United Natural Foods (UNFI) all recently launched online marketplaces. Saks.com, too, is exploring one.
Hudson’s Bay said its launch is part of its digital-first strategic evolution. The Canadian-based department store retailer wrote in a statement, “Whether it’s an offering that falls within Hudson’s Bay’s current assortment of apparel, home, beauty and accessories, or a new category introduction, quality vendors are encouraged to join hundreds of new merchants that will launch in the Marketplace on thebay.com in 2021.”
Lands’ End Marketplace spans categories such as footwear, home décor and intimates alongside the full product assortment of the brand. Lands’ End said in a statement that its marketplace platform “has a small product catalog which allows for greater visibility amongst partner brands. This also allows new vendors to take advantage of Lands’ End’s qualified traffic and industry leading conversion rate.”
UNFI said its new marketplace will enable the retailer “to extend product range, improve customer experience and streamline vendor onboarding.”
In a quarterly letter to vendors obtained by WWD, Marc Metrick, Saks.com’s CEO, said the luxury website will test a marketplace in coming weeks. He wrote that the format will allow Saks “to better understand and refine the experience for customers and brand partners as we identify opportunities to expand the breadth and depth of our assortment while maintaining the curated experience for which Saks is known.”
Amazon.com operates the dominant online marketplace with Walmart and eBay having sizable platforms. Google, Target, Instacart and Kroger were identified as emerging marketplaces in Feedvisor’s “Brands, Amazon, and the Rise of E-Marketplaces” study.
Express, Urban Outfitters, Crate & Barrel, J. Crew and Ahold Delhaize are among niche retailers with marketplaces. Macy’s drop ships certain categories and is considering a formal marketplace.
For retailers, third-party handling of delivery, returns and other aspects of the customer experience creates operational and reputational risks. Third-party sellers are also introduced to their customers.
Expanding assortments by adding third-party sellers capitalizes on the “endless aisle” potential of the internet to offer customers more choices and can accelerate online growth.
- Hudson’s Bay Puts the Call Out to Vendors to Join Its Marketplace – Hudson’s Bay/Business Wire
- Lands’ End Marketplace Officially Launches – Lands’ End/GlobeNewswire
- UNFI Launches First Wholesale Food Industry Marketplace in North America, Powered by Mirakl – UNFI/PRNewswire
- Saks.com To Test a Marketplace, Investments Ahead – WWD
- Brands, Amazon, and the Rise of E-Marketplaces – Feedvisor
- Mounting Marketplaces: Game Changers, but No Slam Dunk – WWD
- Retailers turn to online marketplaces in scramble for sales – Financial Times
DISCUSSION QUESTIONS: Do you see more benefits than drawbacks for niche retailers launching third-party marketplaces? Of the retailers cited in the article (Hudson’s Bay, Lands’ End, UNFI, Saks.com), which would benefit the most from a marketplace?