Best Buy Canada Creates a Platform for Growth With a Marketplace
The challenge: Why did Best Buy Canada decide to launch a marketplace?
With an annual revenue of $4.5 billion, Best Buy Canada is the unrivaled retailer of consumer technology in the country. In 2016, the company launched a Mirakl-powered marketplace on bestbuy.ca, giving Canadian consumers a wider array of choices and a better customer experience, and consolidating its market dominance.
The marketplace has fundamentally shifted how Best Buy Canada does business: third-party sellers can sell products in both core and adjacent categories, with the strategy determined by what results in the best outcomes for customers and the business.
As a result, marketplace sales growth reached 7X in the first three years, without cannibalizing sales from its first-party business. This not only secured the company’s leadership position in Canada, but also set a new standard for flexible and flourishing business models in a competitive market landscape.
7.8M Skus
created on the Best Buy Canada marketplace
1 Million +
orders shipped in the past year
96%
of products available on BestBuy.ca are SKUs from Marketplace sellers
1 in 3
orders shipped are from marketplace sellers
Why Best Buy Canada Partnered with Mirakl
Best Buy Canada launched its marketplace to meet more customer needs and capture market share by offering new and adjacent categories. The flexibility of the marketplace also supported “test and learn” initiatives, enabling the company to experiment with new products and categories without exposing itself to financial or inventory risks.
Why Best Buy Canada chose Mirakl to power its marketplace?
The number-one retailer of consumer technology in Canada chose the Mirakl Marketplace Platform for a number of compelling reasons.
A fast, scalable solution. Facing competitive pressure from new entrants in the Canadian eCommerce market, Best Buy Canada needed to move quickly. With Mirakl, the company launched its online marketplace in 12 months, and is now introducing new SKUs to the market 360 times faster than before the marketplace was operational.
Maintaining findability and protecting the customer experience. Using Mirakl Catalog Manager, Best Buy Canada ensures that every product is listed in the right category, without duplicates. Sellers can autonomously update product information, minimizing the time and effort spent by the Best Buy Canada team and ensuring that the customer experience on bestbuy.ca remains at Best Buy’s high standards.
Seller onboarding at scale. Best Buy Canada has hundreds of active sellers on the marketplace, collectively offering more than 7.8 million SKUs, with almost 1M available on best.buy.ca today. This scale was made possible by Mirakl’s seamless supplier onboarding, which supports sellers large and small with a variety of integration methods, including .csv/.xls, .xml, aggregator, FTP, API & EDI, and online forms.
Optimized commissions to maximize margins. Best Buy Canada uses Mirakl’s commission grid features to optimize commissions, with granular definitions ranging from SKU and brand to seller and category levels. This strategy maximizes revenue in the low-margin electronics sector, while also offering flexibility to attract a diverse range of sellers.
“Mirakl jumped out to us as the right partner. The technology is very robust, it scales, it’s easy to integrate. Every person we interacted with at Mirakl was very passionate about the marketplace model and making sure that we would be successful.”
Commercial dominance
Best Buy Canada achieved a threefold increase in marketplace sales in the past five years, and aims to double gross merchandise revenue over the next five years. With its Mirakl-powered marketplace, Best Buy Canada is one of the largest online retailers in its country, enjoying a dominant position not just in electronics but also new categories such as luggage, fitness equipment, and baby gear.
Competitive pricing without cannibalization. By allowing sellers to compete against each other on marketplace product listings, Best Buy Canada has ensured that customers can always find the most competitive pricing on bestbuy.ca, without cannibalizing sales from its first-party business. 73% of customers that view marketplace products have also viewed products from Best Buy’s owned inventory.
Expanding offers while enhancing profitability. Best Buy Canada has transformed historically lower profit but highly relevant categories like gaming furniture into lucrative ventures by working with marketplace sellers. These third-party businesses bring their logistics expertise to the table, enabling the company to overcome financial and inventory constraints to offer these in-demand products.
A top destination for current & future customers. Best Buy Canada's curated marketplace is a critical marketing engine for the retailer, leading to a 66% increase in marketplace product page visits and a 42% rise in revenue through SEO compared to 2021. Brand awareness measures 2.5 times higher than its closest competitors.
In the first year that our marketplace was live, we tripled the number of offers on BestBuy.ca. This growing volume of relevant products boosted our results from SEO, leading to considerable year over-year growth in organic traffic to the website during year 1. Our marketplace has played an essential role in our SEO strategy ever since.
