Frequent online shoppers make half their web purchases on marketplaces

Shoppers show a preference for marketplaces. And the more often someone shops, the more they tend to favor the marketplace model.


Shoppers around the world like eCommerce marketplaces. A lot. Two-thirds of them prefer eCommerce sites that have a multi-merchant marketplace over those that do not, according to a survey from Mirakl, a marketplace technology provider.

The 9,000 shoppers from nine countries surveyed cited better prices (62%), better product selection (53%) and better delivery options (43%), and shopping experiences (43%) as the leading reasons for their preference for eCommerce sites that sell goods from many retailers or consumer goods brands.

In addition, the most frequent online shoppers have an even stronger preference for marketplaces than do other shoppers. Nearly three-quarters of the consumers Mirakl calls “power shoppers”—those who purchase something online at least once a week—wish more of their favorite retailers would offer marketplaces.

Mirakl, which provides services to both retailers and B2B companies, hired independent researcher the Schlesinger Group to survey 9,000 shoppers (1,000  in each of the following nine countries: Australia, Brazil, France, Germany, Italy, Singapore, Spain, the United Kingdom, and the United States) in October 2021.

According to the survey, U.S. shoppers shared the pro-marketplace sentiments of their global counterparts.

  •  83% of U.S. power shoppers said online marketplaces are the most convenient way to shop; they cite better delivery options (58%), better selection (57%) and better prices (56%) as top benefits. And, three-quarters (75%) wish more of their favorite retailers had online marketplaces.
  • On average, U.S. power shoppers conduct 50% of their online shopping through marketplaces vs. the average U.S. consumer (43%) and the average global consumer (42%), indicating that as consumers shop more, marketplaces take a bigger share of their spending.

Other key findings from the U.S. include:

  • When shopping online, 65% of U.S. consumers say they often buy from an online marketplace. Millennials are most active, buying from marketplaces 79% of the time.
  • A total of 62% of U.S. respondents who shop online say they often buy from third-party sellers, that is, the outside merchants that sell on a marketplace operated by another company.
  • Compared to last year, 39% of U.S. consumers say they bought from third-party sellers more often. An additional 49% say they purchased items from them about the same.
  • 57% of respondents say they always check or check most of the time to see if the product being purchased is sold directly by the merchant or a third-party seller.

When U.S. consumers consider the convenience of an online shopping outlet, their most important criteria are: in-stock items (No. 1), product variety (No. 2), and fast delivery (No. 3). 81% of U.S. consumers say they changed their mind about a purchase based on how long it will take to ship.

The full survey report, called The 2022 State of Online Marketplace Adoption, is available for download.

Retailers have multiple marketplaces to choose from

The Mirakl survey will come as welcome news to retailers who have committed to the marketplace model. And the number of such retailers is growing. Some 24% of 100 retailers surveyed by Digital Commerce 360 between July and September of this year say they will increase the number of marketplaces on which they sell goods.

Those retailers will have a wide variety of marketplaces from which to choose as several retailers have announced plans to open up their eCommerce sites to sell goods from outside retailers.

In November, Macy’s Inc., No. 13 in 2021 Digital Commerce 360 Top 1000, announced it would launch a third-party marketplace. That announcement followed a slew of similar news from both established retailers and start-ups. Lands’ End (No. 68 ) and Hudson’s Bay Co. (No. 30) both launched marketplaces this year. Back in March, Verizon Media, owner of Yahoo, said it would build an online marketplace called Yahoo Shops. In October, crafts and hobby retailer The Michaels Companies, (No. 106), said it would soon launch a marketplace for craft-supply sellers. And in November, Jedora, a marketplace for jewelry, launched.

Originally posted on January 13, 2022, by Paul Conley, Digital Commerce 360

What Does It Take To Build A Thriving Enterprise Marketplace?

Co-founder and CEO of Mirakl, the global leader in enterprise marketplace solutions. Tech entrepreneur, marketplace expert. 

 

GETTY Images 

Enterprise marketplaces are proving to be an essential priority for retailers and brands looking to capitalize on expansive growth in consumer e-commerce. According to new research, in 2020, online marketplaces represented 62% of all online sales, totaling $2.68 trillion globally. Perhaps even more significantly, they grew at twice the rate of overall e-commerce during a period of both growth and unpredictability for the retail industry. The marketplace business case has been proven many times over, demonstrating that those who adopt the enterprise marketplace model enjoy increased agility, sustainable growth and resilience in unpredictable markets. However, for many businesses that have yet to adopt a marketplace, this strategic direction may represent a leap of faith — transitioning into an ecosystem approach that brings high-quality third-party sellers under their umbrella while maintaining a singular identity.

What can companies do to ensure that their enterprise marketplace succeeds? Before major retailers begin growing their businesses with marketplaces, they need to commit to an approach that sets them up for success across the organization. This article is the first in a three-part series examining best practices and making key recommendations for businesses large and small that want to take advantage of this transformational retail technology. In this article, I’ll focus on planning and preparation. The second will cover operations, and the third will examine best practices for change management.

Vision And Planning

Companies that operate successful enterprise marketplaces often describe their journeys as a form of digital transformation. Therefore, peers should view marketplaces as more than just a new technology tool, but also a change in overall business strategy and mindset. For a marketplace to work, everyone across the organization should treat the marketplace as a business-wide priority with executive sponsorship, employee buy-in and a well-considered strategy.

Here are four actionable tips for designing your marketplace implementation strategy:

1. Secure commitment across the company. Businesses shouldn’t treat an enterprise marketplace as an experiment or a siloed IT project. The only way for the marketplace to succeed is for it to be embraced organization-wide, with no discussion of pilot projects or limited deployments. Most marketplaces that fail restrict the model to a specific category, preventing future stakeholders from offering their input at the start and posing a barrier to company-wide buy-in.

2. Embrace the competition. The most common fear among businesses considering the marketplace model is the idea of bringing on competitive products in core categories. While this fear of cannibalization is understandable, the reality is that the increased assortment will drive customer loyalty and boost gross merchandise value (GMV) — both of which deliver key benefits to the marketplace operator. Embracing the competition enables marketplaces to expand in new areas, offering products that customers may have wanted previously but weren’t available from your brand.

3. Use the marketplace to foster agility. Onboarding marketplace sellers allows businesses to explore potential areas for expansion that would otherwise be too cumbersome. When setting up a marketplace, organizations should continue looking for ways to unlock new growth opportunities. The possibilities are endless: Marketplace operators could add services to augment their product assortment, onboard local sellers to expand internationally or use ethical sourcing to promote corporate social responsibility.

4. Build a dream team. Even category leaders shouldn’t have to do it all by themselves. Building an enterprise marketplace enables organizations to work with the best partners in areas like shipping and logistics, procurement and seller aggregation. By partnering with the people and organizations that offer specialized experience and expertise, marketplace operators can rapidly accelerate their business growth. The right partnerships allow businesses to hit the ground running while simultaneously saving money — thereby eliminating the additional cost of building new technology solutions from scratch and avoiding lost revenue from delayed time to market.

The strategic vision for your enterprise marketplace encompasses a series of key business decisions that will ensure the marketplace launches successfully, with a powerful value proposition for a well-defined market. Beyond launch, a clear vision is essential to support the marketplace’s continued growth, ensuring that companies set into motion the virtuous cycle of more products, more sellers and more buyers. When launching a marketplace, it’s best practice to measure twice and cut only once. These best practices will ensure success and allow the company to remain agile in a rapidly changing e-commerce landscape.

Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs, and technology executives.

Originally posted on December 3, 2021, by Forbes

Macy’s Inc. Reports Strong 3rd Quarter, Lifts Outlook for Year

Macy’s Inc., lifted by strong sales performances across all of its divisions, reported net income of $239 million, or 78 cents a share, for the third quarter, compared to a loss of $91 million or 29 cents, in the year-ago period.

Total sales for the quarter ended Oct. 30 rose to $5.44 billion, compared to $3.99 billion in the year ago period. Comparable sales were up 35.6 percent versus the 2020 period and 8.7 percent versus the 2019 period. Part of the sales lifts was due to earlier holiday shopping and Macy’s running a friends and family promotion in the third quarter, instead of the fourth quarter.

Digital sales increased 19 percent versus third quarter 2020 and grew 49 percent versus third quarter 2019.

“Macy’s Inc. delivered another strong quarter, and exceeded its expectations on both top and bottom lines,” said Jeff Gennette, chairman and chief executive officer. “The results were driven by the effective execution of the Polaris strategy and an improved economic environment.” Polaris is Macy’s three-year strategy, unveiled in February 2020, centering on personalization and the loyalty program, expanding assortments, accelerating digital growth, closing 125 department stores, opening smaller scale off-mall stores, boosting some private brands into billion-dollar businesses, and reducing costs.

Gennette said that in the third quarter, the Macy’s brand added 4.4 million new customers. “Consumers continue to spend, and we successfully offered a wide range of expanding merchandise assortment to meet their growing demand,” he said.

“Looking ahead to the fourth quarter, we remain a special place for holiday shopping, and our robust omnichannel ecosystem is showing resilience in the face of labor and supply chain challenges and enables us to meet customer shopping needs with speed and convenience.”

The company unveiled plans to launch a digital marketplace in the second half of 2022 to “further fuel customer acquisition and sales growth across all of our channels,” Gennette said.

“Our digital business is targeted to generate $10 billion in sales by 2023, and we expect the new marketplace platform to produce incremental revenue on top of that target,” said Matt Baer, chief digital and customer officer at Macy’s Inc. “The marketplace platform will enable us to expand our assortment at a low incremental cost, while giving Macy’s customers easy access to even more product selection to meet their diverse needs.”

The retailer is partnering with Mirakl, which powers many retail marketplaces with its platform. Macy’s said Mirakl will “seamlessly integrate into Macy’s and Bloomingdale’s architecture and allow for evolving strategies over time.”

By division, Macy’s comparable sales rose 35.1. percent from the year-ago quarter and 8.4 percent from the 2019 period, fueled by categories that were “solid” throughout the pandemic, including home, fragrances, jewelry, watches and sleepwear. Occasion-based categories, such as dresses, men’s tailored and luggage, continued to recover, and emerging categories, such as toys and pets, showed “encouraging results and the company continues to expand on those categories and related brands.”

Bloomingdale’s comparable sales were up 38.5 percent compared to the third quarter of 2020 and ahead 11.2 percent compared to the 2019 period. Results were driven by strong sales of luxury handbags, fine jewelry, home, men’s shoes, and contemporary apparel.

Bluemercury comparable sales were up 39.5 percent compared to the third quarter of 2020, but down 2.2 percent compared to the third quarter of 2019. Private brands, home fragrance and treatment showed strong sales performance during the quarter.

Gross margin for the quarter was 41 percent up from 35.6 percent in third quarter 2020 and up 100 basis points from the 2019 quarter. Improvements were largely due to benefits from pricing, promotion and inventory productivity enhanced by the Polaris strategy.

Macy’s raised its full year guidance. Net sales are seen reaching $24.12 billion to $24.28 billion, versus previous guidance of $23.55 billion to $23.95 billion. Adjusted diluted earnings per share are seen at $4.57 to $4.76, compared to the previous guidance of $3.41 to $3.75.

Originally posted on November 18, 2021, by David Moin, WWD

Macy’s Follows Amazon, Walmart in Development of Digital Marketplace

Macy’s is planning to launch a curated digital marketplace for third-party sellers in the second half of 2022, following the model set by Amazon, Walmart, Target and other retailers that have seen success in providing a platform for others, as digital sales continue to outpace in-store purchases.

Jeff Gennette, chairman and CEO of Macy’s, said that the marketplace, which is being developed in partnership with enterprise marketplace technology company Mirakl, will help “enhance the existing Macy’s business, fuel customer acquisition and drive growth across all of our channels.” The marketplace is part of the retailer’s strategic plan, called Polaris, to reposition itself as a digital-first omnichannel merchant.

“Through Polaris, we laid a solid foundation for digital growth, and we’re seeing that growth come to fruition,” Gennette told analysts on a conference call on Thursday (Nov. 18). “We are now able to focus on additional strategic investments to refresh the digital experiences.”

A major benefit of the marketplace for Macy’s, the CEO said, is the ability to more easily expand its assortment in new categories, with which the retailer has seen success in recent months. For example, bringing the Toys R Us brand to Macys.com in August has led to toy sales more than doubling in-store and online compared to 2019.

The announcement of the new digital marketplace came as Macy’s reported third-quarter comparable sales growth of 37% on an owned basis and nearly 36% on an owned-plus-licensed basis versus 2020; both metrics increased by nearly 9% compared to 2019. Digital sales increased 19% year over year and 49% on a two-year stack.

In the third quarter, Macy’s recorded $5.4 billion in total sales. Gennette said the retailer’s digital business alone is on track to generate $10 billion in sales by 2023, not including incremental revenue from the new marketplace.

“Digital isn’t merely benefiting from a shift of sales from stores,” Chief Finanical Officer Adrian Mitchell told analysts. “It’s actually growing beyond that.”

Brick and Mortar 

That isn’t to say that Macy’s is ignoring its physical footprint — Gennette noted that in areas where the retailer has a brick-and-mortar location, digital sales are boosted, pointing to the omnichannel strength of the brand. In the third quarter, Macy’s opened five new locations in the Dallas, Atlanta and Washington, D.C. markets.

“We are focused on establishing an appropriate footprint in markets that drive our sustainable and profitable omnichannel growth,” Gennette said.

Still, with international travel still deflated because of COVID-19, downtown stores have yet to return to 2019 sales levels, and Mitchell said Macy’s doesn’t expect tourism levels to return to 2019 levels next year. The reopening of many offices in early 2022, however, could provide a boost, and suburban stores have seen better traffic levels, executives noted. This has led the company to reconsider 60 planned store closures.

“Our team is committed to accelerating and sustaining … the continued successful execution of our digitally-led omnichannel strategy,” Mitchell said.

New Payment Partnership 

Mitchell said Macy’s is close to finalizing a new partner for its credit card programs, with a decision set to be announced in the coming weeks. As a digital-focused retailer, the CFO noted, Macy’s aims to find a partner “with strong digital capabilities today and a strong innovation pipeline, with the prospect to further expand that pipeline in the future.”

Though the new credit card programs will be a growth driver in the long term, Mitchell said that over the next few years, credit card revenue levels will likely be slightly lower than the 3% Macy’s has historically experienced. “Our loyalty and personalization initiatives are the key growth levers in our ability to obtain and retain more customers to drive omnichannel sales,” he said.

Originally posted on November 18, 2021, by PYMNTS.com

Macy’s announces plans for curated digital marketplace


Image courtesy of Macy’s media assets 


Macy’s has announced its plans for a digital marketplace.

Designed to add to the company’s leading spot as a digitally led omnichannel retailer, the marketplace will expand the assortment in categories and brands already offered, and introduce a range of new ones in addition.

The platform will also enable third-party merchants to sell their products online on the Macy’s and Bloomingdale platforms, after being carefully selected to do so.

“The marketplace platform will further accelerate our Polaris strategy and unlock new opportunities for sustainable and profitable growth. Our digital business is targeted to generate 10 billion dollars in sales by 2023, and we expect the new marketplace platform to produce incremental revenue on top of that target,” said Matt Baer, chief and digital customer officer at Macy’s.

Macy’s is partnering with marketplace technology company Mirakl, in order to power the platform. Mirakl will bring platform capabilities that will integrate into Macy’s and Bloomingdale’s architecture, allowing for further evolution later on. Its seller tools will also give sellers the option to monitor, drive and grow their businesses.

The marketplace is set to launch later in 2022.

Originally posted on November 18, 2021, by Rosalie Wessel, FashionUnited

Macy’s shares rise as department store beats on earnings and hikes full-year outlook, thanks to new customers


Photo by Roy Rochlin | Getty Images Entertainment | Getty Images

  • Macy’s reported third-quarter earnings and sales that topped analysts’ estimates.
  • CEO Jeff Gennette said Macy’s added 4.4 million new customers in the quarter and benefited from an “improved economic environment.”
  • Macy’s raised its expectations for earnings and revenue for the full year.

Macy’s on Thursday reported fiscal third-quarter earnings and sales that topped analysts’ expectations, leading the department store chain to raise its full-year forecast ahead of the holidays.

Macy’s shares jumped more than 13% in early trading on the news.

CEO Jeff Gennette said Macy’s added 4.4 million new customers in the quarter and benefited from an “improved economic environment.” He also tried to ease concerns about ongoing supply chain issues and said Macy’s doesn’t expect to be impacted by bare shelves during the critical holiday shopping season.

Separately, the company teased the launch of a new digital marketplace that’s set to launch in the second half of 2022. The announcement comes as activist Jana Partners has taken a stake in the business and is pressuring Macy’s to spin off its e-commerce operations from its stores, hoping to fetch a greater valuation than what Macy’s has today.

Saks Fifth Avenue pursued a similar split earlier this year. Its e-commerce unit is now reportedly preparing for an initial public offering at a higher valuation than it saw after its spin-off from Saks’ stores.

Gennette told analysts Thursday that Macy’s has engaged with the consulting firm AlixPartners to review its business.

“We also recognize the significant value the market is assigning to pure e-commerce businesses,” he said. “And as we look at the landscape today, we are undertaking additional analysis that could help inform our long term strategy to further unlock value for Macy’s.”

Here’s how Macy’s did in the three-month period ended Oct. 30 compared with what analysts were anticipating, based on a survey by Refinitiv:

  • Earnings per share: $1.23 adjusted vs. 31 cents expected
  • Revenue: $5.4 billion vs. $5.2 billion expected

Macy’s reported net income of $239 million, or 76 cents per share, compared with a loss of $91 million, or 29 cents a share, a year earlier. Excluding one-time items, the company earned $1.23 per share, better than the 31 cents that analysts had predicted.

Sales grew to $5.4 billion from $3.99 billion a year earlier. That came in ahead of estimates for $5.2 billion.

Macy’s reported comparable sales growth, on an owned plus licensed basis, of 35.6% in the quarter. Analysts had been looking for growth of 29.3%, according to Refinitiv estimates.

Digital sales grew 19% year over year and were up 49% on a two-year basis. The company said its online business made up 33% of total sales, up 10% from 2019 levels. And 41% of Macy’s new customers came through digital in the third quarter.

At Bloomingdale’s, comparable sales on and owned plus licensed basis rose 38.5% year over year. The company said shoppers with more money to spend bought up luxury handbags, fine jewelry, men’s shoes, and apparel.

Gennette said the company has successfully brought back old customers and found new shoppers during the pandemic. A tie-up with Toys R Us has helped Macy’s toy sales more than double from 2019 levels, he said.

Macy’s now sees 2021 revenue ranging between $24.12 billion and $24.28 billion, compared with a prior range of $23.55 billion to $23.95 billion.

It expects full-year adjusted earnings per share to hit $4.57 to $4.76, up from a prior forecast of $3.41 to $3.75.

Analysts had been looking for adjusted earnings per share of $3.89 on revenue of $23.78 billion.

Department store operator Kohl’s also on Thursday raised its outlook for the year, sending its shares up about 5%.

Macy’s chief digital and customer officer Matt Baer said that the new digital marketplace the company is launching will help Macy’s expand its assortment of products at a lower cost. It will allow third-party merchants to sell their merchandise on the websites of Macy’s and Bloomindales. Macy’s said it has teamed up with tech provider Mirakl to power the platform.

Macy’s has been targeting $10 billion in online revenue by 2023, but this marketplace should add more incremental sales on top of that, Baer said.

Bed Bath & Beyond earlier this month announced it plans to debut a similar marketplace for third parties to sell items on its site. It’s a push to mimic the marketplaces that companies like AmazonWalmart and Target already have. But it’s unclear if these retailers will be as successful.

Jana’s interest in Macy’s stock has given the retailer’s shares a boost. Its stock has rallied more than 174% year to date. Macy’s has a market value of $9.55 billion.

Find the full press release from Macy’s here.

Originally posted on November 18, 2021, by Lauren Thomas, CNBC 

Macy’s Plans Online Marketplace Launch for 2022, Reconsiders 60 Store Closures

Macy’s is continuing its omnichannel evolution with the launch of a curated digital marketplace for both its flagship brand and Bloomingdale’s slated to open in the second half of 2022. Additionally, the retailer will adjust its 125 planned closings for 2023 by closing an additional 10 stores in January 2022, but taking a second look at another 60 that were intended to go dark.

The marketplace will expand the range of products carried by Macy’s and introduce new categories for the retailer on both macys.com and bloomingdales.com. The platform will be powered by enterprise marketplace technology provider Mirakl, which will help sellers monitor, drive and grow their businesses while remaining within Macy’s curated parameters.

“Our digital business is targeted to generate $10 billion in sales by 2023, and we expect the new marketplace platform to produce incremental revenue on top of that target,” said Matt Baer, Chief Digital and Customer Officer at Macy’s in a statement. “The marketplace platform will enable us to expand our assortment at a low incremental cost while giving Macy’s customers easy access to even more product selection to meet their diverse needs.”

The change in closure plans goes hand in hand with the retailer’s expanded digital presence. Macy’s Chief Financial Officer Adrian Mitchell noted that “digital performance is stronger in markets where we have stores” during an earnings call, which is why the retailer may delay the closure of some stores even as it puts other locations on the chopping block.

The retailer’s downsizing effort may help it focus on off-mall and small-format locations while it continues to close mall-based anchor stores. The newer concept stores have exceeded the company’s expectations, and Mitchell sees a “clear path” for Macy’s off-mall efforts.

Additionally, Macy’s is under pressure to spin off its eCommerce business after activist investor Jana Partners took a stake in the company. Jana Partners said a Macy’s eCommerce standalone could be worth as much as $14 billion, compared to the company’s current $6.9 billion valuation.

Other recent digital upgrades include Macy’s Live sessions, where shoppers can connect with the retailer’s Stylists in an interactive chat environment for detailed product descriptions, real-time reviews and recommendations, and an updated mobile app with easier navigation, improved curation, and personalized recommendations.

Macy’s is on an upward trajectory despite the store closures and pressure to spin off its eCommerce business. For Q3 2021, the retailer reported an owned-store comparable sales increase of 35.6% compared to 2020, and 8.7% compared to Q3 2019. Digital sales were up 19% from 2020 and 49% from 2019, and the brand attracted 4.4 million new customers during the quarter.

Originally posted on November 18, 2021, by Bryan Wassel, Retail TouchPoints

Mirakl Acquires Octobat to Enhance Invoice Compliance

Software-as-a-Service (SaaS) platform Mirakl on Tuesday (Nov. 9) said it’s adding invoice compliance expertise through its acquisition of French startup Octobat, a move that will help Mirakl customers manage local and global regulations as they expand around the world.

Mirakl’s technology and network of industry partners allows operators to expand their global offerings faster than they could have on their own. It also means Mirakl-powered Marketplace operators can better manage invoicing compliance as part of the Mirakl solution.

“For the first acquisition in Mirakl’s history, we looked for an opportunity that would keep us ahead of customer needs,” said Philippe Corrot, co-founder and CEO of Mirakl, in the company announcement. “With Octobat, we saw we could simplify and automate complex invoicing for marketplace operators across the globe, enabling them to scale faster than ever.

“This acquisition extends the capabilities of our open, flexible marketplace platform even further,” he said.

Gaultier Laperche, co-founder and CEO at Octobat, said the company was “eager to see our unique solution in use by customers around the world, so joining forces with Mirakl fulfills that vision.

“Like us, Mirakl believes invoicing is a critical aspect of the marketplace buying and selling process and an essential capability for the future direction of the entire enterprise marketplace category,” he said. “Our team is proud to be joining one of the fastest-growing and most innovative French tech companies.”

In September, Mirakl wrapped up a $555 million Series E funding round led by Silver Lake, bringing the company’s total valuation to more than $3.5 billion, more than twice the valuation from a year earlier.

Its enterprise marketplace platform is behind billions in gross merchandise value for more than 300 brands.

Mirakl is using the money to invest in technology, expertise, and the partner ecosystem and add to its teams to better meet the need for digital commerce. The company is looking to hire 350 engineers by 2023 to grow its team to 500 to help with extending its end-to-end capabilities and scalability, including boosting artificial intelligence (AI) and automation.

It is also looking to double the size of its customer success team and expand the Mirakl Connect ecosystem of marketplace-ready sellers.

Originally posted on November 9, 2021, on the PYMNTS.com 

Debenhams launches giant marketplace as it targets fast growth

Debenhams has announced that it has become the UK’s largest marketplace across fashion, beauty, sport, and homeware by launching a new platform powered by major SaaS provider Mirakl.

The Boohoo Group-owned retailer and Mirakl said the new marketplace “enables Debenhams to meet evolving customer demand, rapidly scaling [the] assortment to more than 70,000 new products in three months”.

It also allows Debenhams “to evolve into a new era of digital commerce and respond to changing customer demand by rapidly growing its product offering while staying true to the Debenhams brand,” we’re told.

Boohoo Group’s Chief Information Officer Jo Graham said the launch means the company is “evolving the brand to stay ahead of the demands of the current digital-first world of commerce. Our partnership is critical to this evolution. With its unmatched technology, expertise, and seller ecosystem, Mirakl is supporting us to drive forward Debenhams’ digital transformation while ensuring we maintain the brand that customers have come to love since its creation over 240 years ago.”

Debenhams said it can now “quickly onboard new brands, as well as maintain and extend both existing Boohoo and Debenhams brand relationships”. The retailer has already made around 200 new brands available through the new marketplace, and “new suppliers and brands are joining weekly”.

It already has 300 million UK website visits per year and is positioned as the number two retailer of skincare products in the UK while it has the largest market share in make-up products. It’s clearly targeting leadership in other categories too with the launch of the marketplace.

Mirakl has been working with a number of retailers in Britain as the marketplace model evolves and currently powers such businesses for Decathlon UK, FeeluniqueHarvey Nichols, H&M Home, Joules, and Turner Price, among others.

Originally posted on October 6, 2021, on the Fashion Network  

Parts Town Goes Full-Tilt on E-Commerce Marketplace Model

Run by its innovation division, Red Lightning Group, the e-commerce platform aims to improve the supply chain, grow OEM and bring in new verticals for the food service distributor.

  • Parts Town’s new Marketplace will help it expand into other verticals, such as HVAC parts, janitorial supplies, water filtration, technician supplies, and residential appliances.
  • The Red Lightning Group division of Parts Town — responsible for the Marketplace creation — formed in 2020 to speed up its innovation efforts both internally and for its customers.
  • The marketplace is available through the Parts Town website as well as the company’s mobile app, and incorporates technology from Mirakl and SAP Commerce platform.

Parts Town’s marketplace platform is firing on all cylinders with the official launch of its e-commerce marketplace in September, but the work under the hood started in 2019 when it came up with its marketplace strategy.

The new e-commerce platform — accessible on the Parts Town mobile app and through partstown.com/marketplace — provides customers a one-stop shopping experience for its OEM foodservice replacement parts as well as products across a variety of new categories. Instead of logging on to multiple websites to find parts and supplies or jumping in the car to make local pick-ups, customers now have access to additional sellers on partstown.com who will ship their products directly to them through Marketplace.

Addison, Illinois-based Parts Town started developing its investment in the concept of marketplace two years ago with the launch of a physical marketplace initiative, Parts In Town, which enables one-hour local parts pick up from service companies and distributors. The marketplace is an online extension of Parts In Town. However, the sellers for Parts In Town and Marketplace are different: the former are local, the latter can be anywhere.

Red Lightning Group, a division of Parts Town that launched last year to accelerate innovation in the foodservice industry and other verticals, developed Parts Town’s Marketplace. The Marketplace is built using the platform of cloud-based e-commerce software from Mirakl, but the strategy, development, seller acquisition, and other elements are handled by an internal team, according to Emanuela Delgado, senior vice president and general manager of Red Lightning Group. To create Marketplace, Mirakl’s technology integrated with Parts Town’s existing e-commerce site.

In addition to foodservice parts and products, Marketplace will also offer parts and other related products from adjacent market sectors, including HVAC, janitorial, water filtration, technician supplies, and residential appliances. The marketplace currently includes more than 35,000 residential appliance parts from brands such as Whirlpool and Frigidaire, as well as 6,000 janitorial and sanitation products.

Ongoing innovations

Founded in 1987, Parts Town prides itself on supplying genuine OEM parts to its customers, and on its track record of innovation in the B2B distributor space. As one of its first eight employees, Delgado has witnessed firsthand Parts Town’s hockey stick revenue growth over the years, from about $3 million a year in the early days of its founding as a restaurant equipment parts distributor for local service companies to now more than $1 billion.

While Red Lightning Group was initially staffed with internal employees from Parts Town, Delgado says it plans to expand its staff to 17 employees by bringing in outside talent from other sectors, such as B2C, to help drive innovation. “Parts Town has always been about growth and innovation and technology,” Delgado says. “However, what we decided to do is start a new division so that we can have a team of people that’s just solely focused on that so we can move faster.”

The growing team is tasked with strategy, development, seller acquisition, and other development elements of Marketplace, according to Delgado. “Sellers are going to be able to add their products, their offers or inventory into the Mirakl platform in several different ways,” Delgado says. “It’s going to offer items that have in-stock availability, and a price is going to appear on our sites.

“When an order is placed, that order is sent through directly to the seller, and they can either manually go into Mirakl to fulfill that order, or they can build an API into their system. Mirakl controls a lot of the operations from the seller side of getting that order and fulfilling that order.”

Nuts and bolts

While some B2B distributors have moved to Amazon-like marketplaces that feature multiple product offerings from sellers as a means to attract new customers, that wasn’t the founding motivation for Parts Town.

Delgado says Parts Town’s Marketplace is the result of requests from its customers to edge-out into new verticals, such as HVAC parts, janitorial, water filtration, technician supplies and residential appliance parts. For the new verticals, Parts Town and Red Lightning Group are offering the infrastructure and the know-how to the sellers that are adjacent to its core foodservice parts and products.

One of the concerns for a distributor creating its own e-commerce marketplace is that it puts pricing in the hands of the sellers, which can lead to a drive to the bottom of pricing. That’s not the case for Parts Town, as the sellers come up with their own prices that eventually settle into a range.

For Parts Town’s Marketplace, Mirakl also handles the commission rates between Parts Town and its sellers, as well as the categorization of the products that are offered. Marketplace is also a means for providing sellers and B2B customers with digital tools and e-commerce capabilities without building and developing them on their own.

A tool for other B2B companies

Marketplace “allows us to be more specialized and provide some differentiation in trying to help B2B customers procure the parts that they need,” Delgado says. “There are many B2B businesses today that are looking for ways to get involved digitally. Many of them don’t have the commerce sites or digital strategies.”

Providing the infrastructure and digital tools for the e-commerce marketplace is half the battle, according to Delgado. “We can be a tool for those other B2B companies that are trying to get into the digital space with very little investment and risk,” she says. “The more expensive portion is driving that traffic.

“We have the customer base. That’s why we’re focusing on the products that our existing customers use. We also have the expertise to drive traffic to our e-commerce and app capabilities.”

Off to the (physical) market

Interestingly, it was the brick-and-mortar initiative Parts In Town that served as a phased approach for the e-commerce marketplace. Conceptualized in 2019, Parts In Town enables one-hour local parts pick up from service companies and distributors. Instead of Parts Town opening its own branches all over its footprint, it’s using Parts In Town as an extension of its branch network by partnering with sellers that already have local inventory.

“We did a soft launch in the beginning of January 2020,” Delgado says. “We started off with only a handful of sellers because we wanted to learn and refine, and then the pandemic hit. By the end of the year, we had a couple dozen sellers, and now we’re up to 88 for the Parts In Town model.”

While Parts Town carries a vast inventory for its core customers, Parts In Town locations typically carry the parts that are the most critical for customers’ operations.

“This was the first use-case of the marketplace, and it was to meet a very specific need for the industry; picking up parts within one hour on the same day,” Delgado says. “It also helps our service partners. As an example, we were able to get some data from many of our partners and we found that 87% of the customers that were placing an order for Parts In Town were net new customers for that service company.

“If they can transition some of those customers that came to pick up their part into a potential service opportunity in the future, that’s also a lead generation tool for them as well.”

History of innovation

As part of its legacy of innovation, Parts Town launched PartSPIN in 2013. PartSPIN is a 360-degree imaging technology that’s equipped with technical diagrams, “smart manuals” and a mobile app to help customers find and view equipment manuals and parts while in the field.

“We were the first to create an e-commerce site for our industry,” Delgado says. “We created an app and launched an app in 2010, which was far advanced compared to others in the B2B space.

“We also have this OEM to OCM tool that helps with providing guidance to customers looking for parts and making sure that they’re genuine OEM parts.”

In August, Parts Town announced it developed a new tool with Davisware that integrates and streamlines the entire parts purchasing process. The tool, called PartsPath, is designed to save service providers significant time and money.

PartsPath allows service companies to automate purchase orders, acknowledgments and AP invoices in three steps without leaving their Davisware field service management software.

“Davisware is an operating system that is used by many of the service companies in our industry,” Delgado says. “ It also serves some of the HVAC industry. This is something that will really help make things easier for existing customers that are on the Davisware platform, but also for new customers on Davisware or new Parts Town customers. It will help with the expansion into HVAC as well.”

On deck for marketplace

As part of its international expansion, last year Parts Town hired Martin Rohde as president of Parts Town International. Rohde was previously general manager for commercial customers for Amazon Business, and he also had an e-commerce career stop at Hewlett Packard Enterprises.

“That’s the other great thing about marketplaces, they can be a tool for some of the other initiatives we have, and they certainly will be a tool for our international expansion,” Delgado says. “For the next year, or the next 18 months, much of what we are focused on is the expansion of our Marketplace strategy with things like adding additional product categories, adding services and also additional functionality.”

The additional functionality could include giving customers the ability to ask for higher quantities or adding different products. While Delgado couldn’t get more specific on Parts Town’s roadmap, innovation will still be at heart of those efforts.

“We demand of ourselves to continue to innovate for our industry,” she says. ”We don’t innovate just to innovate. We’re not just looking for the newest bells and whistles.

“We innovate and build technology to help solve problems or to help our customers and our industry be more efficient. It’s something that we’ve always done and we will continue to do, but we’ll be able to accelerate it even more with the Red Lightning Group that’s dedicated to it.”

Originally posted on October 6, 2021, by Mike Robuck, MDM