Marketplace Technology & Strategy - The Next Big Thing in Growth for Leading Commerce Players
Produced by Marketplacer
Bob Schwartz, Vice Chairman of Marketplacer (previously President of Magento & President/GM Nordstrom.com Marketplacer), discussed the company's marketplace technology and its potential for retailers who want to expand their product offerings by integrating third-party sellers into their marketplace. Bob emphasized the flexibility in supply chain management that marketplaces provide, allowing retailers to experiment with new products without incurring significant risk. Despite this, Bob also noted the challenge of convincing retailers to invest in marketplace technology and advised such retailers to view it as an opportunity for growth. He also discussed the strategic considerations behind dialing up or down the presence of third-party sellers on a company's platform, as well as the commission structure for such sellers and its comparison to traditional gross margins. He concluded that implementing a marketplace may be a new skill set for some companies but is ultimately a simple process with the right partner.
Bob was joined by Nick Black, Head of eCommerce and Digital Customer Experience at Chemist Warehouse, an online marketplace that includes both owned products and third-party sellers. Nick discussed how his company used marketplace technology to expand its offerings and customer base. Nick explained how the company successfully integrated a marketplace into its business model. With 500 stores in Australia, New Zealand, Ireland, and China, Chemist Warehouse is one of the leading pharmacists and retailers in Australia. Nick said the motivation behind the move to a marketplace was the need to meet customer demand for products that could not be physically stocked in the stores. The platform also allowed suppliers to pitch new products, including bulky items. The implementation of the technical aspect of the marketplace was not the most difficult part; rather, it was retrofitting the new business model into an old one, which required a different skill set. Chemist Warehouse had to create a new team specializing in marketplaces.
Chemist Warehouse tests products carefully and ensures they meet quality standards before onboarding sellers. The company has taken an integrated approach to its marketplace, with the idea to be a one-stop-shop for health and beauty products, including products for pets. Chemist Warehouse has integrated all payment costs into the commission rate that sellers pay, making it a low-risk option for sellers. The marketplace and non-marketplace products are easy to find on the site, and the marketplace items have a badge, seller details, and customers can contact the seller directly. Chemist Warehouse promises to have the best pricing and asks sellers to offer their products at the best price.