Best Buy Canada swerved hard into the ecommerce space with an announcement it was opening its Canadian website in Canada to third party-sellers with a new initiative called “Marketplace”. This could translate to new opportunities for B2Bs because it means smaller companies, of diverse product offerings, will be able to piggy-back on Best Buy’s brand recognition and set up an online shop.
Marketplace is slated to launch around the 2015 holiday season.
While Amazon and eBay have similar e-storefronts set up, Best Buy Canada looks to be swinging attention away from the 65 Future Shop stores that have been consolidated under the Best Buy brand, just after 66 Future Shop stores closed for good.
Best Buy announces new partnership
In the May 6 press release it was noted the retail giant would be partnering with Mirakl to integrate Marketplace in Canada. Mirakl is a SaaS leader in its field of providing e-commerce platforms.
“While we’re excited to partner with other Canadian retailers on Marketplace, we’re even more excited to continue innovating in the online space to provide our customers with an unparalleled experience, said Thierry Hay-Sabourin, vice president of eCommerce for Best Buy Canada. “We want to continue to bring the greatest assortment of products to our customers, and help retailers succeed, which is why are inviting other Canadian retailers to join us on our online Marketplace and enjoy our world-class eCommerce capabilities.”
What could Marketplace mean for B2Bs?
Launching Marketplace in Canada could mean a number of things for B2Bs. At this time the retailer is not currently sharing which companies it has chosen to partner with on Marketplace, but if it takes off chances are additional partnerships will be investigated, and B2B firms can join the fray. Many B2B online presences are in woeful need of makeovers, and if Best Buy’s Marketplace wins customer attention, B2B companies now have another arm to reach their market segment.
B2BNN identified several potential advantages with Marketplace:
- Pick-ups and returns can be done through Best Buy’s brick and mortar stores.
- Connecting to Best Buy opens B2B firms to a wider exposure as they can be linked to a well-known brand. Best Buy’s S. model provides a seller directory.
- Third party sellers can build credibility through being listed as a “trusted” partner of Best Buy.
- Gain new audiences as buyers find companies beyond local searches and/or brick and mortar stores.
- Startups could get their feet wet by testing the waters on Best Buy before launching a full website.
- Small businesses that do not have the resources to keep a robust e-commerce site running with all the features it needs could use Best Buy’s platform.
Additionally, this could mean less competition from Best Buy itself, depending on the type of products sold. The press release added launching Marketplace in Canada will allow the electronics giant to focus on its “high-selling and high-margin products while leaving the “long tail” opportunities to third-party sellers.” Small businesses are still not well-represented online in Canada, Marketplace could give SMEs a boost to get a foot in the virtual door.
Let’s look at both sides of the Bitcoin. There could be a few drawbacks too:
- Customers may end up buying from competitors since the purchasing options will be broader.
- More options of similar products on the same website may create more competitive pricing and some businesses may have to readjust their pricing plans.
- The Mirakl press release noted Best Buy could “test new products without associated inventory risks.” If it sees hot sellers, would Best Buy offer comparable products?
- B2B SMBs that already offer similar solutions as Best Buy sells might not see a tangible benefit by listing itself on the Marketplace website.
At this time Best Buy’s commission fees have not been publicly shared, although it appears pricing will be competitive with similar platforms, according to Mobile Syrup. Ultimately, these could be either more cost-effective for third party businesses or less, depending on a company’s current operating expenses.
Pros and cons, this is still a strategy to watch as it could help further shape the overall direction of ecommerce in Canada, which could have a significant trickle effect on small to medium sized B2Bs.
Photo via Best Buy site