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Wal-Mart Stores Inc. has launched Wal-Mart Marketplace to bring a million new products to walmart.com and enable a select group of retailers to offer additional products on the site. The goal is to give customers access to expanded assortments in categories such as apparel and accessories, home, baby, toys, sporting goods and sports memorabilia.
This story first appeared in the September 1, 2009 issue of WWD. Subscribe Today.
Wal-Mart has selected three retailers for the launch of Marketplace. CSNStores.com, which consists of hundreds of specialty stores, from Diaper Bag Boutique to MacLaren Strollers at CSN and Every Room Divider to Shoes Got Soul. The latter offers brands such as Aerosole, Nina, Etienne Aigner and Franco Sarto. The remaining two retailers are Ebags.com, which sells Michael Michael Kors Fulton shoulder bags for $348, Kate Spade Bloomington Liannes, $179.99, and Cole Haan’s Village bucket tote, $348, and Pro Team, a subsidiary of Dreams Inc., which manufactures licensed sports apparel and collectibles.
“It’s been a program we’ve been working on for some time,” walmart.com spokesman Ravi Jariwala said of Wal-Mart Marketplace. “We were very diligent about carefully selecting these partners. It differentiates our program from other programs out there. Rather than open up our marketplace program to everyone, we did our homework to find select retailers known for their customer service and ability to offer large assortments.”
Purchases will be handled by walmart.com’s secure check-out process, with fulfilment, order support, shipping, customer service and exchanges the responsibility of each Marketplace retailer, Jariwala said. “It’s a nice way to extend our assortment and give customers the comfort of walmart.com, which they trust,” she said.
The Wal-Mart Marketplace business model seems similar to Amazon.com, which years ago created a marketplace of third-party sellers. Amazon receives a commission on products sold via its marketplace. Wal-Mart declined to discuss the arrangement with Marketplace retailers. “We don’t disclose details of our partner relationships,” Jariwala said.
While it is similar to Amazon, the Marketplace concept is unique in that it marks one of the first times a retailer like Wal-Mart has opened its Web site to other stores. In most cases, retailers prefer to focus consumers’ attention on their own site rather than promoting others. Target, one of Wal-Mart’s main competitors, originally had an agreement with Amazon for it to run the mass retailer’s Web site, but it is now taking all the operations back in house.
In Wal-Mart’s case, the Marketplace concept will enable it to offer products on walmart.com, via third parties, that it would be unlikely to carry on its own site or in its stores. Walmart.com, which is where John Fleming, executive vice president and chief merchandising officer of Walmart U.S., began with the chain, is generally seen as more progressive than the store operations, often testing products and services on the site long before they appear in the chain’s physical stores, if at all.
Aside from the blue rectangle introducing Wal-Mart Marketplace on the Web site, consumers may not notice anything changes, except that the search for women’s shoes brings up 186 pairs, many more than before. “We wanted to make sure [Marketplace] was well integrated into the experience our customers are already familiar with,” Jariwala said. “You’ll find nearly 1 million new products now woven through our online assortment. We’re extending the number of choices. Based on our relationships with very select Wal-Mart Marketplace retailers, we’re now able to offer this expanded assortment. Dr. Scholl’s and Aerosoles were not found on walmart.com in such depth. There will be more apparel.”
Wal-Mart Marketplace comes at a time when the retailer is gearing up for the holiday season. “We’re certainly seeing customer shopping behavior continue to change and evolve,” Jariwala said. “More customers are shopping both in stores and online. With this launch, it better enables Wal-Mart to serve customers online when they choose to shop online.”
Jariwala said the total number of products carried online is now “several million.”