Best Buy Diversifies with New Digital Marketplace, Revives Blu-Ray Sales

Best Buy is launching a new digital marketplace, moving away from its tech-focused approach. The marketplace will offer a wider variety of products, including sports merchandise, couches, and musical instruments. The company is also bringing back physical movie media, including Blu-Ray, DVD, and 4K SteelBook. The marketplace will allow users to find and return items more easily and will suggest accessories and products that work well together.

Best Buy is set to launch a new third-party marketplace on its website and app, marking a significant shift in its product strategy. The marketplace, scheduled to debut on Tuesday, aims to more than double the retailer's product assortment, offering a broader range of products beyond its traditional tech focus.

The new marketplace will include categories such as custom controllers, gaming chairs and desks, keyboards and mice, monitors and headsets, mobile accessories, seasonal decor, automotive tech, office and home products, Blu-rays, DVDs, and more. Best Buy expects to triple its mobile accessories assortment and expand its furniture and small appliance offerings.

The marketplace is powered by Mirakl, a technology platform used by other retailers like Lowe's, Macy's, and Ulta Beauty. More than 500 online vendors, including Beach Camera and World Wide Stereo, will join the marketplace. Best Buy has a large team dedicated to ensuring the quality of products and sellers, focusing on a curated selection rather than quantity.

Customers can return items from third-party sellers by shipping them back to the seller or returning them at local Best Buy stores. The marketplace will not initially support in-store pickups, but this is something Best Buy is considering for the future. The new platform will enable Best Buy to launch new brands and categories within weeks, compared to the previous months-long process.

Best Buy's Chief Marketplace and E-commerce Officer, Frank Bedo, highlighted the strategic importance of the marketplace. "It is a tentpole strategy of the enterprise," he said. "When you look at areas of growth and areas the company is willing and wanting to invest in based on the upside potential, marketplace is one of those areas."

The marketplace will integrate third-party products into Best Buy's promotional vehicles, such as Deal of the Day and holiday campaigns. Bedo emphasized the importance of balancing first-party (1P) and third-party (3P) products, ensuring that the company's own buying team does not overshadow third-party sellers.

Best Buy's previous attempt at a marketplace in 2011 was discontinued in 2016 due to low revenue and customer confusion. However, with improved technology and changing customer expectations, Best Buy is optimistic about the new marketplace's success. The company will track metrics such as gross merchandise value, customer shopping frequency, units per order, and customer support satisfaction to measure its performance.

References:
[1] https://www.modernretail.co/technology/inside-best-buys-new-third-party-marketplace/