September 22, 2009
Retailers test expanded online roles
Online marketplaces are getting a lot of attention lately since Walmart and Sears both recently made plays in this direction. Their strategies, however, aren't exactly the same.
Walmart recently launched a platform where third-party retailers can sell their products through Walmart.com, as DMNews reported. The arrangement allows Walmart to expand its product selection while eliminating one of the biggest burdens of online retail, fulfillment, which is being handled by the third-party partners. In effect, Walmart is the marketing vehicle for these other retailers. This is similar to what Amazon.com does in its marketplace.
Sears appears to be taking more of an affiliate marketing approach. On the Sears Web site, the marketplace program is explained to retailers this way: “For merchants, Sears Marketplace expands their company's online visibility and drives traffic to their site through an efficient, economical business model Cost-Per-Click.”
“Certainly the affiliate model is generally more lucrative because you get paid just for clicks, irrespective of whether or not anyone converts,” said Sucharita Mulpuru, VP and principal analyst at Forrester Research, via e-mail. “The tradeoff is that Sears is taking customers off its site which is risky for consumers who are so far down the purchase process.”
Sears is also connecting consumers with home improvement and repair service providers via ServiceLive.com.
Sears Holdings recently said it will expand the initiative launched last fall to provide consumers with access to third-party services and products.
“The Sears' Marketplace platform provides new opportunities for us to deliver more shopping choices for our customers as well as open new lines of communication with our business partners,” said Tom Aiello, in an e-mailed statement.
By expanding the marketplace, Sears is looking for “growth in this space” and to earn its “customers trust and build lifetime relationships,” said Aiello.