Walmart.com invites more merchants to sell on its marketplace
April 14, 2016 01:31 PM
Wal-Mart is making a push to encourage more retailers to sell on Walmart.com.
Wal-Mart Stores Inc. is working with ChannelAdvisor Corp., a marketing firm that helps retailers sell on marketplaces like those operated by Amazon.com Inc. and eBay Inc., to rapidly increase the number of merchants in its marketplace program. The two companies announced the plan at ChannelAdvisor’s annual Catalyst conference this week in Las Vegas.
Wal-Mart, No. 4 in the newly released Internet Retailer 2016 Top 500 Guide, began in 2009 to allow other retailers to sell their products alongside the retail chain’s inventory on Walmart.com. Wal-Mart has developed its online marketplace slowly, starting with six merchants—eBags Inc. (No. 167), Wayfair LLC (No. 24), Tool King LLC, Plumstruck (No. 91, part of Hayneedle Inc.), ShoeBuy Inc. (No. 101) and ProTeam (No. 38, part of Fanatics Inc.)—and, starting in 2014, began expanding its roster that now lists approximately 300 retailers, according to investment firm Robert W. Baird & Co.
After a long trial period that allowed Wal-Mart to develop technology to support more sellers and more SKUs online, Wal-Mart is ready to expand its marketplace, Seth Beal, Wal-Mart’s senior vice president of global marketplace, said at the conference.“We started with a few sellers because we wanted to do it right,” he said. “Customers were telling us they wanted more products online, and now we’re ready to partner with many more sellers.”
Products from retailers are displayed alongside Wal-Mart’s own inventory and are called out as Walmart Marketplace items, with the seller’s name displayed on the items. Retailers on Wal-Mart’s marketplace can be featured in Walmart.com promotions, such as Value of the Day deals.
“Customers are already shopping on Wal-Mart, and they’re looking for great products with great prices,” Beal said. “Our partnership with marketplace retailers allows us to provide our customers with more brands and products on Walmart.com.”
David Spitz, CEO of ChannelAdvisor, said Wal-Mart is the third-largest marketplace it works with—behind Amazon and eBay—and is the fastest-growing, same-store sales channel of marketplaces ChannelAdvisor works with, growing 65.2% in the fourth quarter of 2015 over the same period a year earlier.
Wal-Mart’s growing marketplace is a way for the retail chain to keep its customers, Spitz told Internet Retailer. “When Wal-Mart customers go online and look for a product, it has to be available [for customers to purchase on Walmart.com] or else customers are going to search for the product somewhere else.”
Wal-Mart’s online consumers seek value, but that doesn’t necessarily mean low-priced items. “It doesn’t matter if it’s $5 or $5,000—value is what they’re looking for,” Beal said. Walmart.com shoppers skew toward millennials and are in higher-income brackets than the retailer’s in-store customers.
Wal-Mart has some catching up to do in marketplace sellers, compared with two of its biggest marketplace competitors, Amazon and eBay: Amazon has more than 2 million retailers selling products on Amazon.com, and eBay has about 25 million merchants selling on its marketplaces.
“As part of its integration with ChannelAdvisor’s marketplace software, Walmart.com expects a rapid increase in the number of sellers as well as an increasing mix of third-party units sold on the e-commerce site,” Colin Sebastian, analyst at Robert W. Baird, wrote in a note to investors. “At this point, we believe marketplace transaction volumes are still relatively modest, and sellers in our checks do not expect Walmart.com to take much share from the larger and more established platforms (Amazon and eBay.)”
To learn more about the largest marketplaces in the United States, see the latest edition of the Top 500 Guide, now in its 13th edition, which includes a feature on online marketplaces.