Private investment firm Comvest Partners acquires the financially troubled e-retailer, which filed for Chapter 11 bankruptcy protection in March.
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For instance, Rosenblum was recently shopping online for a piece of furniture that could hold CDs and DVDs. Using a Google search, she came across a unit that seemed to fit her needs at Walmart.com. However, the piece, which was sold by an outside retailer, was $200. "I said to myself, 'I'm not going to buy a $200 piece of furniture from Wal-Mart—that's crazy,'" she says. Rosenblum clicked back to Google, found another site and bought a similar piece.
There are many other web shoppers that are not wedded to an Amazon-like, one-stop shopping experience, which is the goal of most online marketplaces, says Fiona Dias, executive vice president of strategy and marketing at e-commerce platform provider GSI Commerce Inc. That's why she isn't convinced online marketplaces pose a serious threat to e-retailers that know how to rank high in paid and natural search listings, and thus can catch the attention of the many online shoppers who start online shopping trips at search engines. 34.5% of traffic to top retail sites in July came from search engines, says Experian Hitwise
She notes, however, that as more consumers use their smartphones for shopping, marketplaces with broad selection may gain traction. "Most people will have a handful of apps that they use—one for retail, one for travel, one for banking and so on," she says. "If that's the case, consumers may not go beyond their default shopping app since it offers everything they need."
Web merchants can fight back by offering more than just products, Dias says. For instance, e-retailer Parentgiving.com offers a wealth of information, such as where adults caring for their parents can learn how to pick the right Medicare prescription drug plan or what seniors need in their diets. "It's about offering something beyond just price," says Dias.
But for web retailers who compete mainly on price, the marketplaces may make for tough competition. And with the promise of more competition to come, the marketplace changes of the past year may only be a prelude to broader shifts in the web retailing landscape.