Leading Retailers Share Lessons and Tips From Successful Marketplace Launches

Austin Fontanella
March 28, 2022
Leading Retailers Share Lessons and Tips From Successful Marketplace Launches
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The rules of retail are being rewritten. Customers are continuously expecting their favorite sites to carry more, and deliver that expanded catalog at record speed. Meanwhile, ongoing supply chain issues and rising customer acquisition costs are all leading to decreased margins as retailers fight to keep up.

With the waters of retail eCommerce becoming increasingly choppy, online marketplaces have emerged as the steady ship in which to navigate the course. Online marketplaces continue to grow at double the rate of traditional eCommerce for the second year in a row. For retailers, the marketplace model allows them to keep up with the growing demand for instant gratification, and deliver shoppers anythinganytimeanywhere.

Recently, Adrien Nussenbaum, Mirakl co-founder and co-CEO, sat down with Vanessa Stützle, Chief Digital Officer, Douglas, and Adam Powell, Chief Digital Officer, The Bay as part of Mirakl’s Platform Pioneer Executive Symposium series. In an intimate, fireside chat, Stützle and Powell addressed how they’re utilizing the marketplace platform to advance their eCommerce strategies and meet the growing needs of their customers.

Douglas: Morphing into a platform business

Douglas has long reigned as one of Europe’s leading premium beauty retailers and innovators. In 2019 they were a trailblazer yet again with the launch of its online marketplace – the first of its kind in Europe.

With the marketplace, Douglas has quadrupled its assortment – adding items in both core categories (including beauty and nutrition), while also breaking into new ones (such as jewelry) – without diminishing its reputation as a premium retailer. Stützle explained, their marketplace strategy is centered around “curated expansion.” This means ensuring Douglas only onboards sellers and brands who align with their high-quality standards and core business values. However, she added, curation has never come at the expense of expansion.

As part of their marketplace strategy, Douglas is continuously monitoring consumer trends and then using them to prioritize seller onboarding. Whether it’s done to break into new categories or fill in existing catalog gaps, the marketplace model has allowed them to keep up with changing customer preferences and always deliver a world-class experience.

“By leveraging the marketplace opportunity we can enter completely new categories and even markets. This really fits with our overall strategy to transform from a beauty site to a health platform,” said Stützle. “In our first two and a half years since launch, we’ve outperformed our initial expectations and modeling.”

The Bay: Uniting the drop ship and marketplace models

For The Bay, the symposium served as a birthday party of sorts, as it was held one year to the day of their initial marketplace launch. Powell told the audience, the platform has been a building block in The Bay’s fundamental transformation from, “A bricks and mortar company that has a digital business, to a digital company that has a bricks and mortar business.”

Prior to launching a marketplace, The Bay solely utilized a drop ship approach to expand its assortment. While they still use this model for certain core items, the addition of an online marketplace has allowed them to unlock unprecedented speed for seller and product onboarding while remaining agile and asset-light. In just one year, The Bay already doubled its catalog: onboarding more high-quality sellers in a matter of months than they had in more than six years with the drop ship method alone.

The Bay isn’t done with expansion yet and plans to increase its assortment ten-fold in the coming years through a combination of dropship and marketplace. Powell noted that while the fear of cannibalization dominated early marketplace discussions, catalog expansion – even in core categories – has lifted all eCommerce sales.

“By supplementing our core assortment with marketplace products we’re giving our customers more breadth and selection. We can now offer more sizes, colors, styles, and even new categories, which really pushes our offerings and experience to the next level. Marketplace products haven’t cannibalized sales; instead, they’ve created incremental sales in those categories,” Powell said.

Written by
Austin Fontanella
Content Marketing Specialist at Mirakl

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