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)
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Walmart will offer a Bob Ross lithograph. (Courtesy photo)
After a period of study and testing, large platforms and retailers are beginning to move ahead with putting new tools to facilitate these transactions into wide release.
The area of digital collectibles is emerging as one of particular interest. Limited edition, collectors’ items have long commanded their own markets. Think of trading cards, action figures, limited-run pressings or the art market as a whole. Now, these are taking digital form. The emergence of tools such as nonfungible tokens (NFTs), which store harness blockchain technology to allow individual versions of digital creations to be available for buying and trading via cryptocurrency, are enabling the beginnings of a new kind of market.
Of the large platforms where ecommerce takes place, eBay has been among the earliest movers in this area. Given that the marketplace is already a place where physical collectibles are exchanged, the extension into digital collectibles makes sense in theory.
eBay has taken steps to put it into practice. The marketplace began allowing buying and selling of NFTs on its platform in 2021. The stated ideas behind the launch made it clear that it saw digital collectibles fitting into the platform.
“eBay has always been the world’s destination for buying and selling the most unique and hard-to-find items - and we’ll continue to be the destination for collectors of all kinds, physical or digital,” said Jordan Sweetnam, SVP and general manager of the Americas for eBay, wrote in an announcement at the time of the NFT expansion in 2021. “This opportunity unlocks new assets for collecting, new ways for people to fuel their passion, and expands eBay’s appeal to a new generation of collectors.”
The marketplace has picked up activity in this area this year. In May 2022, it launched an initial collection of NFTs on the web3 platform OneOf, which were new interpretations of iconic athletes featured on Sports Illustrated covers. In June, the marketplace took another step toward facilitating transactions when it acquired NFT marketplace KnownOrigin, which allows artists and creators to showcase and exchange digital works for collectors.
The eBay vault. (Courtesy photo)
For eBay, this is part of a wider strategy to provide space for the digital exchange of collectibles as a whole. It is also making big investments in physical collectibles, including a new vault for trading cards that provides storage and a digital marketplace, and the $295 million acquisition of TCGPlayer, a marketplace for collectible trading cards like Magic the Gathering and Pokemon. Those goods will require specific tools to solve their own set of challenges, including authentication to ensure items are what they say they are, and ensure they are truly limited in quantity. Yet it is emerging alongside the digital collectibles, and it’s clear that eBay sees the two sides fitting under its tent.
“One reason that we're excited to launch the Vault is because it can enable real-time transactions for physical or digital goods,” eBay CEO Jamie Ianone said on the company’s recent second quarter earnings call. “This intersection is nascent, the one that collectible enthusiasts are increasingly exploring. This is part of the rationale behind our second quarter acquisition of KnownOrigin.”
A potential connecting point was made more clear on Monday, when Walmart entered the fray. The retailer announced a new partnership with the National Entertainment Collectibles Association that will result in a new platform, called AutoT, that enables digital collectibles.
AutoT will have a series of rare variants of collectibles and figures that are signed by stars and creators.
Here's how it works: To access the platform, customers will be able to purchase a box from Walmart that is tied to a specific pop culture property. Upon purchase, they enter the digital code found on their Walmart receipt into a personal account at AutoTVault.com. This reveals which collectible item they’ve received. Collectors will be able to store a digital collectible for up to two years free of charge in the NECA’s Vault, or have a physical item shipped to them.
Launching on Oct. 6 at Walmart’s website, the platform will debut with collectible figures from Teenage Mutant Ninja Turtles, featuring Shredder, Renet and Foot Soldier, with potential for fans to receive versions of the digital figures signed by co-creator Kevin Eastman. Exclusive lithographs from the TV icon and artist Bob Ross will also be available at launch. New products are set to drop at regular intervals, Walmart said.
A Shredder action figure. (Courtesy photo)
For Walmart, this is an extension into a new form of commerce as it looks toward the future of retail, which has long been built around physical goods. Coupled with last week’s announcement that it is building a large experience in Roblox, it’s clear the world’s largest retailer wants to have a presence wherever goods are being bought and sold. The throughline here is that digital collectibles can usher in an evolution of shopping.
“At Walmart, we are always finding new ways to bring innovation and one-of-a-kind offerings to our customers,” said Laura Rush, SVP of electronics, toys and seasonal at Walmart US, in a statement. “NECA’s unique collectibles and inventive AutoT platform offer a new type of shopping experience to shoppers, ensuring that Walmart is bringing the best in tech and entertainment to customers nationwide.”
This may be a test not only of the tools and shopping functions, but also where value is shown. Will a person find value in a digital work that can be linked to its creator in the same they would a physical work that has touched the artist's hands? In other words, can Bob Ross' resurgence courtesy of memes and YouTube translate to people wanting to own a piece of his work?
NFTs on Instagram. (Photo via Meta)
Given that art is involved, it's also worth considering what will happen when the gallery wall is removed. The ability to display and share collectibles in common spaces may also be valuable. One avenue arrived last week. Meta opened up the capability for users to share digital collectibles that they have purchased or bought on Facebook and Instagram to everyone. These collectibles can also be shared between the two platforms. Making good on an announcement it made in May, Meta said users can now connect a digital wallet and display NFTs from those wallets on the platform, The NFTs will have a shimmer effect, and public information like a description of the NFT can be displayed. The work can be attributed to both the creator and collector.
As Ianone referenced, these are nascent launches. They may not be the versions that last, but they are important steps toward pushing this form of collectibles into wide release. Provide the tools, figure out what people find valuable and new markets can take root.
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