Walmart.com bullish on growth of Marketplace
Wal-Mart Stores Inc’s online unit is bullish on the prospects for Marketplace, a service it recently launched to offer shoppers a deeper selection of products than it would ever stock on its own, its chief marketing officer said in an interview.
Late last month, Walmart.com unveiled “Walmart Marketplace,” and said it would allow select retailers, like eBags and CSN Stores, to sell merchandise on its website.
The program has allowed the retailer to quickly add one million items to its online assortment and appeal to shoppers who may want very specific items that Walmart.com would not typically carry, said Kerry Cooper, Walmart.com’s chief marketing officer.
For instance, she said that by partnering with CSN, Walmart.com has added about 20,000 lights to its website.
“We probably had 200 lights that are the great basics of table lamps and lighting,” she said of Walmart.com’s own selection. “But if you’re looking for that special blue pendant lamp for your kitchen, it’s hard for us to, frankly, invest the resources against building out that strong lighting assortment.”
In launching Marketplace, Walmart.com is following a strategy used by Amazon.com and eBay Inc, which allow outside retailers to sell items on their sites.
J.P. Morgan analyst Imran Khan said diligence is required to perfect the strategy.
“A significant portion of Amazon’s success in growing its third-party business has been driven by a focus on the customer experience,” Khan stated in a research report.
“While maintaining a positive experience is challenging for all online sellers, we think a third-party business — where a smaller seller is often piggybacking on the reputation of a larger one — is especially fraught with complications.”
Purchases from a Walmart Marketplace retailer are managed through Walmart.com’s checkout process. But the Walmart Marketplace retailer manages the rest of the order, including shipping, customer service, and returns.
Cooper said customers can post reviews on its website of its retail partners, allowing Walmart.com to track how satisfied shoppers are with the service they receive and the merchandise they buy from these outside retailers.
She also said Walmart.com shied away from using small online retailers that might not be able to handle its volume.
“We were looking for large e-tailers that have the capacity from a distribution and a customer service perspective to make sure that they could match our scale,” she said. “We focused very much on how many calls a day can you handle? How many packages a day can you handle?”
BULLISH ON GROWTH
According to Internet Retailer, Walmart.com ranked as the 13th-largest U.S. online seller in 2008, with an estimated $1.74 billion in sales. Amazon.com ranked as the No. 1 online seller, with $19.17 billion in sales.
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