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Welcome to Data File. In this weekly feature, The Current shares key findings shaping the ecommerce landscape. At The Current, we comb industry, analyst and economic sources for the data that matters to ecommerce professionals, and include it throughout our work. This feature is one of the ways we’re sharing what we find.
This week, a report from ecommerce platform Jungle Scout has new data that fills in the profile of ecommerce sellers using Walmart Marketplace. Here's a quick breakdown of the takeaways:
Walmart's third-party marketplace is adding thousands of sellers.
Combining its massive scale with digital capabilities, Walmart’s ecommerce business grew 90% over the two years of the pandemic, the company said in February. During that time, it also emerged as the retailer with the second-largest share of ecommerce sales in the US, per eMarketer.
Alongside selling items directly, a growing piece of Walmart's ecommerce business is its third-party marketplace, where the company expects to add 40,000 new sellers in 2022. After launching in 2009, Walmart Marketplace was opened up to a new wave of sellers in 2020. With free two-day shipping in place, the retailer also launched Walmart Fulfillment Services in 2020, providing marketplace sellers and others with access to the company’s supply chain and logistics network.
Walmart Marketplace sellers run profitable businesses.
In the wider picture of ecommerce, Walmart Marketplace is an emerging force, states Jungle Scout’s State of the Walmart Seller 2022 report. Walmart’s shopper-to-seller ratio is 1,918-to-1. Compare that to Amazon, where it is 48-to-1. This offers opportunity for brands.
“With relatively fewer sellers than other popular ecommerce platforms, fewer fees, and access to Walmart’s global supply chain logistics, Walmart’s third-party platform offers convenience and a large, loyal customer base with less congestion or competition than other ecommerce channels,” the report states.
Most of the sellers opting for the channel aren't on Walmart Marketplace alone. In its report, titled State of the Walmart Seller 2022, Jungle Scout shares that 97% of Walmart Marketplace sellers are on at least one other platform.
Where Walmart Marketplace is involved, profitable businesses typically follow. The study found that 95% of small-and-medium-sized sellers on the marketplace have profitable ecommerce businesses, while 73% of sellers have profit margins above 20%.
Beauty and crafts are the most popular categories.
When considering selling on any new channel, it’s important to evaluate what categories perform well on a given platform. In the case of Walmart’s ecommerce channel overall, the study found that automotive parts and accessories, electronics and fitness supplies were especially strong when comparing the most popular categories for online and in-store purchases.
Among small-and-medium-sized sellers on Walmart Marketplace, the top categories are beauty and personal care and arts, crafts and sewing, with apparel and home goods not far behind.
The report indicates that Walmart Marketplace can play a key role in a multichannel strategy.
"Walmart's online business is becoming a more significant player, even alongside more established platforms. Walmart's massive online growth presents an attractive proposition for ecommerce sellers looking to diversify their strategies," said Greg Mercer, Founder and CEO of Jungle Scout, in a statement.
Take a look at the visualization below for more data:
(Handout image by Jungle Scout)
Trending in Retail Channels
Applications are open for startups interested in the 12-week Store Nº8 dCommerce Base Camp.
Walmart incubation arm Store Nº8 and Web3 accelerator Outlier Ventures are teaming up to support retail startups.
The organizations opened applications this week for the Store Nº8 dCommerce Base Camp accelerator. The virtual program will offer education, funding and mentorship to startups building solutions in Web3 that are designed for the retail and commerce experience.
Focus areas for selected startups will include decentralized infrastructure, data and growth solutions, immersive experiences and the metaverse and the intersection of AI and blockchain technology.
“We think dCommerce represents a huge opportunity to unbundle ecommerce into its constituent parts, and into a more decentralized and composable stack of protocols to create a more efficient, equitable and improved experience for retailers and consumers from CRM to last-mile delivery," said Outlier Ventures CEO Jamie Burke, in a statement. "There is clearly no better partner than Store Nº8, as Walmart's incubation arm, so we are thrilled to launch this accelerator program together.”
Beginning in mid-August, founders will take part in a 12-week program. The cohort members will receive funding and access to subject matter experts from Store Nº8 and Outlier Ventures. They will also receive support from industry mentors in areas such as product roadmap development, the token economy and fundraising.
“Decentralized commerce has the potential to unlock new value in the global commerce ecosystem, so we are excited to partner with Outlier Ventures to support and engage with entrepreneurs building at the forefront of this technology on their path to scale," said Store Nº8 VP Thomas Kang, in a statement.
The new program arrives in the year after Web3 and the metaverse saw a spike in interest from brands and retailers, as the arrival of immersive platforms opened up new digital environments where consumers gathered. Walmart entered the metaverse through an activation on Roblox, and also introduced a platform for digital collectibles. But it remains a nascent space, so there’s room for startups bringing fresh ideas to help larger enterprises develop capabilities. Alongside connections that help startups move forward, such learning is one potential outcome of the accelerator could last beyond the 12 weeks.
Applications for the accelerator are available here.