E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
Walmart.com and Sears.com have opened their online doors for new business in e-marketplaces that, like Amazon.com, provide space for other online merchants to sell their products
Amazon.com Inc. has demonstrated how an online retailer can benefit from allowing many other retailers to sell through its site. Wal-Mart Stores Inc. and Sears Holding Corp. are following that example, opening up their e-commerce sites to other merchants.
Wal-Mart has signed up such online retailers as CSN Stores LLC, eBags.com and Dreams Inc. to sell through its new Walmart Marketplace. The marketplace will allow Walmart.com to offer specialized merchandise it wouldn’t otherwise carry, and to add those items in time for the upcoming holiday shopping season.
“Our focus is always on our customers, and by adding nearly one million new items we give them even more reasons to shop Walmart.com,” says a spokesman.
Walmart.com, the e-commerce arm of Wal-Mart Stores, rolled out Walmart Marketplace in late August. The new marketplace, featured prominently on the home page, gives shoppers access to expanded merchandise in 32 categories, including products offered by other merchants in the home, baby, toys, sporting goods, shoes, bags, luggage, and licensed sports apparel and collectibles categories.
Sears ramps up
Not to be outdone, Sears is expanding its online marketplace to attract more merchants that want to sell their merchandise on Sears.com.
Sears quietly launched the marketplace last fall at the same time it redesigned Sears.com. Sears says its marketplace is now moving into full production, and the retailer is actively looking for more business partners. Automotive parts direct marketer Whitney Automotive Group, operator of JCWhitney.com, is the only marketplace retailer Sears has announced so far.
“The Sears marketplace platform provides new opportunities for us to deliver more shopping choices to our customers as well as open up new lines of communication with our business partners,” says a Sears spokesman. “This current platform expansion is an evolution of a process we established with our Internet partners last November.”
The new Sears marketplace has been expanded to give merchants more advanced options to create a merchant account, upload product information and catalogs, and monitor their account status with a dashboard tool that provides overview information, order history and other data. Sears will process all transactions, but order fulfillment and customer service will be the responsibility of individual retailers.
Sears will charge merchants a monthly fee of $39.99 and take a commission of 15% to 20% depending on the product category. For the baby, fitness, sports, shoes, tools, toys, games, work wear and uniform categories, Sears will charge a 15% commission for each item sold. Higher commissions of 17% to 20% will be paid for items in the appliance, beauty, health, wellness, and lawn and garden categories.
For its marketplace, Walmart.com thus far is being selective. So far, CSN Stores, eBags.com and Dreams are selling their wares at the new online emporium.
“We carefully chose these three retailers based on their ability to provide strong customer support and offer large assortments of high-quality brands and products,” the Walmart.com spokesman says. Those retailers’ products are integrated into the product assortment at Walmart.com and the retailer is identified at the top right of product pages, the spokesman adds.
Walmart.com will process all transactions on Walmart Marketplace, and participating merchants will be responsible for fulfilling and shipping orders and handling customer service, exchanges and returns. Walmart.com has not disclosed the fees it is charging retailers that sell through its site.
Walmart.com and Sears are latecomers to the marketplace arena, behind Amazon and eBay Inc., which generates 51% of its sales from fixed-price sales, mostly by the tens of thousands of small retailers that sell through eBay. The two big retail chains have a lot of catching up to do, says Scot Wingo, CEO of ChannelAdvisor Corp., which helps retailers sell through online marketplaces like Amazon and eBay.
“They are a good four years behind Amazon, and Amazon has a hell of a lead with a marketplace that’s generated estimated sales of $4 billion to $6 billion each year,” says Wingo. To succeed, Wingo says, Walmart.com and Sears will have to recruit many online retailers that can offer shoppers broad selection and unique products.