The retailer is looking to grow the number of brands and categories available through its ecommerce channels.
A badge denotes a marketplace seller. (Courtesy of Macy's)
Department store chain Macy’s is welcoming third-party sellers into its ecommerce fold.
The news: Macy’s on Sept. 28 launched a third-party marketplace on its digital channels, adding what it calls a “curated assortment” of products from third-party sellers and brand partners. Macy’s said the marketplace will allow it to expand the amount of available merchandise on its digital channels. This includes:
How it works: Within the shopping experience, third-party merchandise sits alongside Macy's other goods. In a statement, Macy’s said that customers of its website and app “should feel minimal differences." Marketplace sellers will be denoted by a badge. The difference comes behind the scenes, as marketplace sellers will be responsible for fulfilling and shipping their own orders. The offering is powered by Mirakl, a company that provides marketplace technology to retailers such as Best Buy, Kroger and Bed, Bath & Beyond.
Macy’s said the marketplace will also be a place to learn. It can adjust assortments for the changing preferences and buying behaviors of customers.
“Our marketplace complements our existing omnichannel strategy and is another platform we will use to find the most efficient distribution strategy for our partners,” said Josh Janos, Macy’s, Inc. vice president of marketplace, in a statement. “Not only will we continue to maximize brands and existing assortments, but we will use the marketplace to test and customize our assortments based on customer demand.”
For sellers: Macy’s said it will work with a “select, curated group of sellers and brands.” Macy’s said the sellers will be “carefully chosen to ensure alignment with business needs and Macy’s high-quality product and fulfillment standards.” The retailer said it has designed a simple onboarding experience, and will offer seller support and training, analytics and promotional participation.
Digital growth: The marketplace launches after Macy’s saw ecommerce sales grow over the last three years. In its earnings report for the second quarter of 2022, Macy’s said digital sales were up 37% over 2019. Digital channels accounted for 30% of Macy’s sales, up 8% from pre-pandemic. For the short-term, Macy’s is facing a number of headwinds due to shifting consumer behavior toward services over goods, and less discretionary spending as a result of higher costs of food and fuel amid inflation. Like other retailers, it also worked through an excess of inventory that was mismatched to demand as a result of supply chain challenges. Digital sales were down 5% year-over-year for the quarter. The retailer sees the marketplace as a way to continue to grow ecommerce offerings in an efficient manner. On the company's earnings call with investors, CFO Adrian Mitchell said the marketplace has the potential to be a “high return investment that is all about assortment and brand expansion under a curated platform and without the inventory handling costs.”Labor disputes on the West Coast could cause further disruption heading into peak season.
When the first half of 2023 is complete, imports are expected to dip 22% below last year.
That’s according to new data from the Global Port Tracker, which is compiled monthly by the National Retail Federation and Hackett Associates.
The decline has been building over the entire year, as imports dipped in the winter. With the spring, volume started to rebound. In April, the major ports handled 1.78 million Twenty-Foot Equivalent Units. That was an increase of 9.6% from March. Still it was a decline of 21.3% year over year – reflecting the record cargo hauled in over the spike in consumer demand of 2021 and the inventory glut 2022.
In 2023, consumer spending is remaining resilient with in a strong job market, despite the collision of inflation and interest rates. The economy remains different from pre-pandemic days, but shipping volumes are beginning to once again resemble the time before COVID-19.
“Economists and shipping lines increasingly wonder why the decline in container import demand is so much at odds with continuous growth in consumer demand,” said Hackett Associates Founder Ben Hackett, in a statement. “Import container shipments have returned the pre-pandemic levels seen in 2019 and appear likely to stay there for a while.”
Retailers and logistics professionals alike are looking to the second half of the year for a potential upswing. Peak shipping season occurs in the summer, which is in preparation for peak shopping season over the holidays.
Yet disruption could occur on the West Coast if labor issues can’t be settled. This week, ports from Los Angeles to Seattle reported closures and slowdowns as ongoing union disputes boil over, CNBC reported. NRF called on the Biden administration to intervene.
“Cargo volume is lower than last year but retailers are entering the busiest shipping season of the year bringing in holiday merchandise. The last thing retailers and other shippers need is ongoing disruption at the ports,” aid NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “If labor and management can’t reach agreement and operate smoothly and efficiently, retailers will have no choice but to continue to take their cargo to East Coast and Gulf Coast gateways. We continue to urge the administration to step in and help the parties reach an agreement and end the disruptions so operations can return to normal. We’ve had enough unavoidable supply chain issues the past two years. This is not the time for one that can be avoided.”
