Dive Brief:
- More than doubling Best Buy’s product lineup, the electronics retailer launched a third-party digital marketplace on Tuesday, per a company press release.
- The online marketplace introduces hundreds of brands, like Martha Stewart and Beach Camera, and launches new categories, marking the largest expansion ever of Best Buy's assortment. Shoppers can return marketplace purchases at Best Buy stores or ship products back to the seller.
- New and expanded categories include small appliances, seasonal decor, indoor and outdoor furniture, musical instruments and more. Best Buy will soon add sports merchandise with licensed items from Fanatics.
Dive Insight:
Best Buy is eyeing growth beyond its traditional electronics offerings.
“Our customers have always looked to us to bring excitement and inspiration in ways only technology can,” Frank Bedo, chief marketplace and e-commerce officer at Best Buy, said in a statement. “With marketplace, we’re able to give them not only more of the latest technology, but a massive new collection of products outside of the tech space so we can truly offer the full experience they need.”
The new marketplace was first teased by Best Buy in January. The platform is the retailer’s second foray into digital marketplaces, though. Best Buy previously shuttered an earlier version of a marketplace after five years.
However, Best Buy Canada (a wholly-owned subsidiary of Minnesota-based Best Buy) has found success in marketplace sales.
The Canadian company launched a marketplace in 2016, Jefferies analysts said in a Tuesday note shared with Retail Dive, who currently estimate one-third of orders from Best Buy Canada’s website are third party.
“While we anticipated a broader assortment from new vendors & categories, we didn't envision the SKU assortment doubling,” the analysts said of Best Buy’s new U.S. marketplace launch. “We believe Best Buy's marketplace launch in Canada in 2016 is a great case study of how digital sales (and profits) were catalyzed, and expect the same result in the U.S.”
Marketplace sellers’ products are fully integrated into the existing Best Buy website, and the retailer’s employees are able to help build out a shopping cart with customers, per the release.
The launch comes after Best Buy in May lowered its full-year guidance due to evolving tariff policies. The company’s first quarter revenue declined 0.9% year over year to $8.8 billion, while net earnings decreased nearly 18% to $202 million.
Correction: This story has been updated to reflect Best Buy is expanding some of its product assortment.
