Macy’s Online Marketplace Aims at Selection Diversity and Profitability
Macy’s Online Marketplace Aims at Selection Diversity and Profitability
Following a few months of speculation and buildup, Macy’s has now formally announced its online marketplace, developed in partnership with leading service provider Mirakl.
In terms of categories, the focus is on Baby, Beauty, Electronics, Gifts, Home, Pets and Toys. Some of these categories in particular beauty, baby, home and toys are great candidates for a marketplace because there is a lot of innovation in these categories and a large vendor community which can supply a lot of inventory.
Josh Janos, the VP of Marketplace at Macy’s led the launch of Target’s Plus marketplace, so he is no stranger to curated marketplaces. Likely he saw the challenges with Target developing its own solution rather than partnering a third-party provider.
What’s marketplace mean for Macy’s which already has a robust dropship business with CommerceHub? In particular, Macy’s used what I think is a codeword called a curated marketplace.
From my own work with retailers advising them on marketplace planning and strategy, this means a few things:
One, most categories will remain gated and subject to merchandising approval. It’s not like Amazon where anyone can signup.
Two, EDI is pretty much not an option here. I don’t care what kind of toolset you have, EDI oftens means 2-3 months of integration time just from a human factor point of view (it can change if they are already on an EDI network, etc). Marketplaces can at least cut that in half. Best case scenario a week or two (if you include testing, etc).
Three, as a retailer, you prioritize freshness and launching new brands. New brands keeps shoppers coming back.
I performed a market research study on this exact topic with Supplier Enablement platform Convictional earlier this year. If a brand has a cloud-based storefront, the reality is it’s much easier to onboard them to a marketplace storefront than it is a traditional dropship program.
As part of this launch, Macy’s has a few opportunities ahead of it.
One, Macys has a lot of traffic, and more than enough visitors to support a robust marketplace.
Two, a marketplace can be an enabler for an even more lucrative retail media business which brands can use to drive traffic to marketplace listings. In Macy’s case, their retail media partner is Criteo.
A marketplace paired with a retail media solution can make your online presence more profitable over time compared to only selling items you buy at wholesale or dropship.
It's easy to be cynical about Macys, but I don't care who you are, standing up a marketplace platform is a many months long project to plan, implement, test and launch. IT projects fail more than they succeed, so something is going right here. Congrats to that team for their execution.
Now, the real work begins. Success will depend on:
- stock for the right assortment shoppers are looking for
- continuing to keep onboarding times low
- shipping excellence
