Retail Channels
28 February 2023
Michaels launches third party marketplace
The arts and crafts retailer is aiming to quadruple its online assortment.
Photo by Todd Lee-Millstein on Unsplash
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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.
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Marketing
09 June 2023
'There's a lot of ways to frame value'
Campbell Soup Company CEO Mark Clouse offered thoughts on messaging amid inflationary shifts in consumer behavior.
Photo by Kelly Common on Unsplash
After months of elevated inflation and interest rate hikes that have the potential to cool demand, consumers are showing more signs of shifting behavior.
It’s showing up in retail sales data, but there’s also evidence in the observations of the brands responsible for grocery store staples.
The latest example came this week from Campbell Soup Company. CEO Mark Clouse told analysts that the consumer continues to be “resilient” despite continued price increases on food, but found that “consumers are beginning to feel that pressure” as time goes on.
This shows up in the categories they are buying. Overall, Clouse said Campbell sees a shift toward shelf-stable items, and away from more expensive prepared foods.
There is also change in when they make purchases. People are buying more at the beginning of the month. That’s because they are stretching paychecks as long as possible.
These shifts change how the company is communicating with consumers.
Clouse said the changes in behavior are an opportunity to “focus on value within our messaging without necessarily having to chase pricing all the way down.”
“No question that it's important that we protect affordability and that we make that relevant in the categories that we're in," Clouse said. "But I also think there's a lot of ways to frame value in different ways, right?”
A meal cooked with condensed soup may be cheaper than picking up a frozen item or ordering out. Consumers just need a reminder. Even within Campbell’s own portfolio, the company can elevate brands that have more value now, even if they may not always get the limelight.
The open question is whether the shift in behavior will begin to show up in the results of the companies that have raised prices. Campbell’s overall net sales grew 5% for the quarter ended April 30, while gross profit margins held steady around 30%. But the category-level results were more uneven. U.S. soup sales declined 11%, though the company said that was owed to comparisons with the quarter when supply chains reopened a year ago and expressed confidence that the category is seeing a longer-term resurgence as more people cook at home following the pandemic. Snacks, which includes Goldfish and Pepperidge Farm, were up 12% And while net sales increased overall, the amount of products people are buying is declining. Volumes were down 7%.
These are trends happening across the grocery store. Campbell is continuing to compete. It is leading with iconic brands, and a host of different ways to consume them. It is following that up with innovation that makes the products stand out. Then, it is driving home messaging that shows consumers how to fit the products into their lives, and even their tightening spending plans.
Campbell Soup is more than 150 years old, and has seen plenty of difficult economic environments. It is also a different business today, and will continue to evolve. At the end of the day, continued execution is what’s required.
“If it's good food, people are going to buy it, especially if it's a great value,” Clouse said.
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