Best Buy Expands Online Offerings with Sports Apparel and Cookware
Best Buy has announced a significant expansion of its online offerings, enabling customers to purchase a range of products including sports apparel from Fanatics and cookware from Martha Stewart, alongside its traditional electronics lineup. This move, revealed on October 17, 2023, marks Best Buy’s re-entry into the third-party marketplace sector, a strategy aimed at enhancing competitiveness against major online retailers such as Amazon.
The Richfield-based retailer aims to leverage this low-risk, high-reward model to more than double its product selection. “We’re looking at the marketplace as a natural extension of the things that we bring to our customers today,” said Jason Bonfig, Chief Customer, Product and Fulfillment Officer at Best Buy. He emphasized that this approach creates a more comprehensive shopping experience, allowing customers to access a wider variety of products.
Strategic Marketplace Expansion
The new marketplace initiative is designed to expand Best Buy’s presence in categories where competitors like Micro Center excel. This includes an enhanced selection of laptops, gaming accessories, and products from well-known brands such as Razer, Microsoft, and Samsung. Bonfig noted that the goal is to balance the increase in offerings with ease of navigation on the website, ensuring customers can find what they want without difficulty.
Previously, Best Buy operated a limited third-party marketplace from 2011 to 2016, featuring around 200 sellers. This initial effort was halted due to low sales and challenges with returns. In contrast, a refined version launched in Canada in 2016 has proven successful, with third-party sellers accounting for 25% of orders shipped on BestBuy.ca, as reported by Jefferies investment bank. They project that a U.S. marketplace could potentially represent 14% of Best Buy’s online sales by 2030.
The reintroduction of the U.S. marketplace will utilize technology from Mirakl, an e-commerce software provider that has collaborated with major retailers like Kroger, Macy’s, and L’Oréal. Bonfig remarked, “Back when we sunset that marketplace, the market was in a very different place,” highlighting the evolution of consumer shopping habits towards marketplaces.
Curated Approach to Third-Party Sales
Best Buy’s marketplace strategy mirrors that of other retailers, including Target, which plans to increase its third-party sales significantly by 2030. Target recently announced goals to boost sales from its marketplace from $1 billion last year to $5 billion by 2030. Corie Barry, Best Buy’s CEO, indicated that the focus will be on new products and providing multiple options for the same item, responding to customer demand for greater selection.
While Amazon operates an open marketplace with minimal seller requirements, Best Buy will maintain a curated approach, vetting all potential sellers to ensure a positive shopping experience. Currently, more than 1,500 sellers have been approved for Best Buy Marketplace, with an initial launch involving over 500 sellers.
Experts suggest that this selective strategy, along with Best Buy’s range of high-ticket items, may help maintain consumer trust. “They’re experts, curating what kind of products they need to carry and how to put it together into a full-service package,” said Hyunjoo Im, Retail and Consumer Studies Director at the University of Minnesota. “The price may not be the lowest, but I know for sure that the product is safe.”
As Best Buy embarks on this new phase, it aims to balance a broader selection with the quality assurance that customers expect, positioning itself to thrive in an increasingly competitive online retail landscape.
