The Rise of Macy’s Marketplace: Expanding Assortment and Revenue Opportunities

Introduction

In a move to enhance its online shopping experience and expand its product offerings, Macy’s Inc. announced the official launch of its curated digital marketplace. This strategic initiative aims to leverage the strength of third-party sellers to diversify Macy’s assortment and tap into new revenue streams. With the marketplace, Macy’s joins a growing number of retailers recognizing the potential of this business model. In this article, we’ll explore the key features of Macy’s marketplace, its impact on customer experience, and the implications for the retail industry.

Macy’s Marketplace: A Boost to Assortment

Macy’s marketplace brings an exciting addition to Macys.com by introducing 400 new brands across 20 product categories. From apparel and beauty to home improvement, toys, and pet products, the marketplace aims to cater to a diverse range of customer preferences. Each product detail page clearly indicates that it is shipped from a third-party seller, ensuring transparency for shoppers. Despite the involvement of multiple sellers, Macy’s assures customers that they should expect a minimal difference in the overall shopping experience, maintaining their brand reputation for quality and service.

“Customers are encouraged to ship returns directly back via UPS, but our stores are available to assist our customers if needed.” – Macy’s spokesperson

Loyalty Program Integration and Return Policy

Macy’s acknowledges the importance of its loyalty program and ensures that marketplace sales will still count toward customers’ loyalty benefits. This integration allows loyal shoppers to earn rewards and enjoy the perks of the program even when purchasing from third-party sellers. However, there are some restrictions when using loyalty points for marketplace purchases, although Macy’s does not provide further details on these limitations.

Returns, on the other hand, operate differently in the marketplace model. Unlike regular Macy’s purchases, customers cannot return marketplace items to a Macy’s store. Instead, they need to initiate returns directly with the respective third-party seller within 30 days, as stated in Macys.com’s FAQ page. This deviation from the standard 90-day return policy reflects the operational differences involved in the marketplace model. Macy’s encourages customers to ship returns directly via UPS but assures them that their stores are available to assist if needed.

Macy’s Marketplace in the Retail Landscape

The launch of Macy’s marketplace aligns with a growing trend among retail chains to embrace the third-party marketplace model. For example, Target Corp., a prominent player in the industry, introduced its marketplace in 2019. According to Digital Commerce 360, the number of retailers operating a marketplace within the top 1000 has been steadily increasing. In 2016, only five retailers had a marketplace, which grew to 18 in 2020. Currently, 34 retailers in the top 500 operate their own marketplaces, and this number is expected to be even higher for the entire top 1000.

The marketplace model offers various advantages to retailers. It allows them to expand their assortment without incurring significant incremental costs. By leveraging the expertise of third-party sellers, retailers like Macy’s can tap into a wider range of products and categories, catering to diverse customer preferences. This expansion of offerings also opens up new revenue opportunities, as demonstrated by Macy’s target of generating $10 billion in digital sales by 2023, with the marketplace platform expected to contribute incremental revenue on top of this target.

“Our digital business is targeted to generate $10 billion in sales by 2023. And we expect the new marketplace platform to produce incremental revenue on top of that target.” – Matt Baer, Chief Digital and Customer Officer, Macy’s

Building the Macy’s Marketplace: The Role of Mirakl

To bring its marketplace vision to life, Macy’s partnered with Mirakl, a leading marketplace software provider. Mirakl specializes in creating scalable and customizable marketplace solutions that enable retailers to seamlessly integrate third-party sellers into their online platforms. While the cost of building the Macy’s marketplace has not been disclosed, this partnership highlights the importance of leveraging specialized technology to establish and manage a successful marketplace ecosystem.

Conclusion

The launch of Macy’s marketplace marks a significant milestone in the retail industry, as it joins the growing number of retailers embracing the third-party marketplace model. By leveraging the expertise of third-party sellers and expanding its assortment, Macy’s aims to enhance the online shopping experience for its customers and tap into new revenue opportunities. The integration of the marketplace with Macy’s loyalty program ensures that loyal shoppers can continue to enjoy the benefits and rewards they have come to expect. As the retail landscape continues to evolve, the success of Macy’s marketplace serves as a testament to the potential of this business model in driving growth and customer satisfaction.

“Customers are encouraged to ship returns directly back via UPS, but our stores are available to assist our customers if needed.” – Macy’s spokesperson