Lessons From Best Buy Canada's Digital Marketplace Inform U.S. Version
Best Buy will take another swing at third-party marketplaces this summer, using the learnings from its successful Canada version as an improved U.S. playbook.
In addition to giving customers access to a larger product assortment and more categories, the marketplace will also give sellers and advertisers another avenue to extend their reach — through the retailer’s website and app — and build their brands by leveraging the retailer’s qualified traffic.
Best Buy’s first venture into third-party marketplaces was in 2011, but the retailer shuttered it in 2016. That same year, however, Best Buy Canada launched its own marketplace, powered by Mirakl’s software.
Mirakl also is powering the new marketplace, and Best Buy is taking its learnings from the Canada marketplace to inform the U.S. one, according to CEO Corie Barry on an earnings call last week.
"Our Canada team operates an established, growing third-party online marketplace, and we have leveraged their learnings and expertise as we build out our plans," said Barry.
Best Buy's Canada marketplace achieved seven-fold growth in its first three years while accelerating the rate of bringing new products to market and boosting brand awareness, according to Mirakl.
The Canada marketplace focuses more on refurbished and rebuilt items. (Stateside, Best Buy Outlet sells refurbished, clearance and open-box electronics.)
Over time, Best Buy expects the U.S. marketplace will help generate profit dollars and unit share. It should also create opportunities for its retail media arm, Best Buy Ads, through increased traffic and new advertisers.
"I think what we've learned from Canada is that there is a demand to go deeper into the assortments," Barry said. "I think in the U.S., one of the things that we will do that's slightly different is we'll probably offer even more new products and we'll have multiple versions of the same SKU that are going to be available in our marketplace."
It was pointed out on the earnings call that one out of every four items shipped on Best Buy Canada’s website is from third-party sellers. When asked if that was the trajectory for the U.S. side, Barry took a wait-and-see approach.
Between Canada and the U.S., Canada has fewer first-party refurbished products. For the U.S. side there will be some SKU overlap, Barry said, and it’ll be more focused on a deeper assortment of new product, with some adjustments as need dictates.
The Best Buy Marketplace will also phase in capabilities, including facilitating product returns at stores and fulfillment as a service for sellers.
To keep competitive, the marketplace will offer self-service tools that allow brands to manage their own ad buys and new ad products, ultimately expanding inventory and customer reach.
