In February, Target announced that it was launching a third-party marketplace called Target+ to grow its online assortment in areas like home, toys, electronics and sporting goods. At the time, Target’s chief marketing and digital officer Rick Gomez said in a blog post that the marketplace was “in its earliest stages,” and that Target would keep the program invite-only to focus on building a curated assortment.
Still, six months later, the amount of products available through Target+ remains limited. According to research firm Marketplace Pulse, just 55 brands are selling through Target+ today, compared to 30 when the marketplace was first announced. E-commerce research firm Marketplace Pulse found that there are about 115,000 products available for sale through Target+, compared to nearly 40 million through Walmart’s marketplace. (According to Target, there are more than 115,000 products available for sale through Target+, though the company declined to share an exact number of brands or products).
“It’s a pretty eclectic mix of smaller brands,” Juozas Kaziukėnas, CEO of Marketplace Pulse said. Brands that are listed as selling through Target+ include electronics manufacturer Skullcandy, athletic apparel brand Mizuno, and children’s toy company Hasbro.
Analysts say they don’t think Target is making a mistake in not trying to build as big of a marketplace as possible. But, they say that there’s a big untapped opportunity for Target to create a marketplace that complements its in-store experience. In recent years, Target has touted its in-store experience as an advantage — 80% of orders placed on Target.com are now fulfilled by in-store fulfillment options like curbside and in-store pickup.
The slow approach could be seen as an acknowledgment of the reality that it is a losing strategy to try to out-Amazon Amazon. While Walmart is still focused on building a marketplace that offers millions of products in as many categories as possible, other retailers like Best Buy have abandoned efforts to build their own marketplaces in recent years.
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Instead, retailers are finding that they have to double down on areas in which Amazon can’t compete — like in-store perks, or offering a smaller selection of trusted products. And that approach is extending into how they’re choosing to build out their third-party marketplaces.
Jason Goldberg, chief commerce officer at Publicis, points out that with the amount of same-day and next-day delivery options Target has available — more than a third of digital orders placed last quarter were fulfilled using same-day home delivery, in-store pickup or curbside pickup — it gives shoppers fewer reasons to buy something from a third-party seller.
“Most of those vendors can’t offer anything like a one-day delivery service,” Goldberg said.
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There’s other low-hanging fruit that Target has yet to address — there’s no way to filter search results by which products are available through third-party sellers. And, Target could offer more options for brands to customize their storefront pages. While some like Mizuno have populated their pages with a heavy assortment of product or lifestyle images, others are just a barebones page of product listings.
But, what Goldberg thinks that Target should do instead is focus on is building an in-store marketplace — a rotating selection of curated products from smaller or local brands that Target wants to gauge enthusiasm for, in the vein of Macy’s in-store marketplace that is managed by experiential-based retailer b8ta.
“A marketplace is a great tactic, but it doesn’t seem to fit with a lot of the other positioning and tactics that have made Target successful,” Goldberg said.