Best Buy Goes Broader - Third-Party Marketplace Debut | Fast Five Shorts

Speaker A: 00:00:00

Best Buy officially launched its third party marketplace, according to cnbc, again starting last Tuesday.

Speaker A: 00:00:06

Shoppers who go to Best Buy's website and app will see products and brands that weren't available there before, including more tech related accessories like custom video game controllers and some non tech items including seasonal decor and sports collectibles.

Speaker A: 00:00:21

At launch, Best Buy's marketplace will have about 500 sellers.

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The company reportedly vetted applicants and whittled them down to the ones who can provide a high quality customer experience.

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And the sellers much must match Best Buy's return policy.

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All right, question, Ben, we're going to go to you first.

Speaker A: 00:00:39

What does Best Buy have to do right, to make this marketplace successful?

Speaker B: 00:00:45

Oh, great, great question.

Speaker B: 00:00:47

It's.

Speaker B: 00:00:48

I think, I think I like this for two reasons.

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Why is advertising and I'll come back to.

Speaker B: 00:00:55

But the other is sort of stepping back and thinking about what Best Buy is doing or could do with its merchandising strategy.

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So back in April it launched its creator storefront program and that was working with influencers to curate products that they could drive commission of.

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So I went back and had a look and in the Q1 results they talked about having already having 60 of those storefronts set up and working with over 400 influencers.

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So that's moving and look forward to kind of more, more news on how that is scaling financially.

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But if you add the marketplace in, what you potentially got is kind of a model where you've got the influencer as the merchant, the Best Buy team as the merchant or the marketplace, which is you're in this aisle and you are the merchant and it's kind of almost like create your own adventure.

Speaker B: 00:01:48

And that, that could be a load of fun because if your Best Buy you could lean into who do you want to shop with?

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You can make more of their team, make more of their merchants.

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The Blue Jackets have already got this reputation for customer service.

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So you build that up and then you say, oh, actually we've got this incredible marketplace where you can go, people who love their technology, who love their gaming, who love their can go find a niche product or can go find the latest launches that they can bring to market quicker than trying to bring them into the full Best Buy infrastructure.

Speaker B: 00:02:22

So it gives them pace, it gives them speed.

Speaker B: 00:02:25

So what I love to see to make this successful is that love to see how they could bring this idea of these three different routes of merchandising and curation onto the website.

Speaker B: 00:02:36

At the moment, curators aren't even on.

Speaker B: 00:02:38

You have to find them through the curator.

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And it's quite hard just navigating the website to know what is marketplace versus what is their stock.

Speaker B: 00:02:46

So call it out, make a plus of it.

Speaker B: 00:02:49

And if you do that, okay, you've then got an opportunity to drive some ad revenue because you can build new brand partnerships.

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And if you think about core retail media is all about paying for sponsored search.

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But if you great job as a merchant and curated your product beautifully, you don't need brands to paint the search because the great stuff will come up.

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That's why you need a marketplace where you flood it with sellers who won't sell anything unless you actually pay.

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So they've created a model for exciting merchandising and a model to drive ad revenue as well.

Speaker B: 00:03:22

If they're brave enough to not just list everything on one website and say go for it.

Speaker A: 00:03:28

Right, right.

Speaker A: 00:03:29

Well, and Chris, you and I saw at the Walmart sellers conference this week just how important tools like helping the sellers with, you know, advertising and making sure that they can get to the right consumers and tools like support services and things like that to make sure that they can quickly onboard products like all of those, that toolkit that they're able to provide their sellers is what's helping them get as many sellers as they have.

Speaker A: 00:03:54

But, but Chris, what do you think they need to be successful?

Speaker C: 00:03:58

Yeah, I got a couple thoughts on this one.

Speaker C: 00:03:59

You know, and I think there's actually a constituency that, that, that Ben has an address here that could benefit from this in the Best Buy organization and that's Geek Squad.

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I think the marketplace creates an incredible upsell opportunity for the Geek Squad because you know, you can carry higher price things that you're going to want in a very highly consulted sale when you're in the, in someone's house.

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And I had the best geek Geek Squad experience of my life this weekend and I was talking about it on our trip like shout out to TJ Shea of Geek Squad because I hope the Best Buy executives are listening because this guy needs accommodation.

Speaker C: 00:04:35

He was so top notch.

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And I could immediately as he was doing things with the app, sending me, texting me things, different things I could purchase, I could immediately see where this goes with Marketplace.

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And so that was really, really powerful.

Speaker C: 00:04:47

So I love that.

Speaker C: 00:04:48

But on the other hand, there's another thing I would say they need to be successful.

Speaker C: 00:04:52

And that is it's, it's, they can't go too slow.

Speaker C: 00:04:56

500 vendors seems really, really slow to me and I don't want them to make the same mistakes targets made I talked about the top 4% growth not enough.

Speaker C: 00:05:05

And that's coming from the lack of growth in marketplace.

Speaker C: 00:05:07

And the big thing that I've learned over the years with marketplaces and you can't overthink it, you got to draft your criteria, you got to get moving.

Speaker C: 00:05:14

You got to refine it as you go and then you learn more.

Speaker C: 00:05:16

And when you think about it from the perspective of Walmart who we just spent a lot of time with a half a billion SKUs.

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So if you aren't at least at an exponential amount more than 500 by next year, like 5,000, 10,000, my, my hunch is that you're probably going too slow.

Speaker C: 00:05:33

But, but who knows?

Speaker C: 00:05:34

Maybe I'm wrong.

Speaker C: 00:05:35

Best Buy executives come and tell me, but I think, I think I'm a little worried you're going too slow to start.

Speaker C: 00:05:39

You can go faster.

Speaker C: 00:05:40

You just got to keep the criteria tight in terms of what you're going to allow in and then evaluate your performance from there.