Michaels launches third party marketplace

Michaels is the latest retailer to add third-party sellers to its online store.

The news: Arts and crafts retailer Michaels launched a new online marketplace this week. It offers a curated selection from third party sellers that is designed to grow the number of items available through ecommerce.

By the numbers: Michaels is growing its online assortment from 250,000 SKUs to more than one million. The third-party marketplace is playing a big role in that effort.

How it works:

Categories offered in the marketplace include arts and crafts supplies, candle and soap making, leather and wood work, baking, tools and tech, yarn, stitchery, kids, toys, education, journaling and seasonal products.

Commission: Instead of a subscription or listing fees, Michaels is opting for curation of sellers. They receive a standard commission.

Integrations: For sellers, Michaels built a full-service portal to manage each aspect of their marketplace sales and enable integration. This also provides access to APIs and connections from ChannelAdvisor and ShipStation.

Key quotefrom Heather Bennett, EVP of marketing and ecommerce at Michaels: "The launch of Michaels’ curated marketplace for arts, crafts, and décor is the next phase of our ongoing digital transformation to be the destination for all creatives to get inspired, learn, shop and create. By more than quadrupling our online assortment across categories including candle and soap making, leather work and more, Michaels will ensure every customer can find what they need to bring their creative dreams to life no matter their craft."

What it shows

Third-party marketplaces: The third-party marketplace model provides space for sellers on a well-trafficked ecommerce site. While a retailer maintains the site, sellers are responsible for ensuring availability, as well as fulfilling and shipping. The model supercharged growth at Amazon, and now Michaels is joining a growing number of retailers adopting this model. Michaels is aiming to grow the number of items on the site, which will in turn provide more reasons for consumers to keep shopping and coming back to its ecommerce site, while also having the potential to create advantages in pricing.

Retail media opportunity: Marketplaces can also become engines for advertising. With a growing number of items available, retailers can offer sponsored placements for sellers and brands seeking to stand out. It’s why many retailers are launching retail media networks that power these advertising capabilities. Michaels stood up its own retail media network last year through a partnership with Criteo. Look for potential growth now that a marketplace is up and running.

Further reading: Macys launched its own marketplace last year, and Walmart is making notable moves to expand its own assortment with a drive to sign up more sellers. As sellers have more options, competition could increase between marketplaces.