Myer to launch online marketplace
Revealed publicly at its highly anticipated strategy day on Wednesday, the department store will onboard a strictly curated range of lifestyle and home brands as part of a beta-trial called Myer Market before looking to subsequently move into adjacent categories such as apparel.
It has partnered with platform vendor Marketplacer, which was responsible for cycling marketplace Bikeexchange, to facilitate the creation of the channel, due to launch when Myer is satisfied with the range on offer.
Sellers have already started to come on board, with a campaign kicking off today to drastically increase the number of partners before launch, alongside the public announcement of the platform.
Myer Market will exist separately to its existing e-commerce website myer.com.au as a complementary customer service that will be fulfilled by the vendors on the platform.
Speaking to Inside Retail Weekly about the marketplace, Myer’s chief digital and data officer Mark Cripsey said that Myer isn’t looking to be the biggest marketplace, but will provide customers with a differentiated offer that leverages its curation expertise, loyalty program assets and physical store network.
“We’re not trying to be the biggest marketplace in Australia, we want to bring the best of the best of sellers,” he said.
Asked whether Myer intends to compete directly with Amazon, Cripsey said he believes there is room for a variety of players in the market.
“Several marketplaces can happily co-exist, so long as they’ve got a different purpose and a different role,” he explained. “Our knowledge of the Australian customer, our brand and our expertise with product really allows us to have a point of difference that’s not replicable.”
In opening a marketplace, Myer joins the likes of Ebay (which it currently sells through), Catch Group, Kogan, Mysale Group and Ozsale – all of whom have benefitted from rapid adoption of B2C online marketplaces in recent years.
Myer will seek to set itself apart by leveraging its Myer One loyalty program to provide partners and customers with its points-based rewards program, while utilising its store network to facilitate the logistical requirements associated with product returns on behalf of sellers.
Cripsey said the department store will be selecting partners “very carefully” to ensure they are able to stack-up to product quality, service and fulfilment requirements.
Myer also hopes an expansion into marketplace will enable it to extend its range more broadly across the breadth of the business, while also looking to use the channel to increase sales within its private label business.
“Our intent is to go into adjacent categories to where we usually trade. Who knows? It could be a great opportunity for us to become more aware of certain supplier strengths, which could lead to other conversations within Myer,” Cripsey explained.
Myer Market is understood to be technically already operational through Marketplacer’s platform, which is touted to have more than 20 million annual users, 100,000 sellers and 340,000 products across a portfolio of 15 separate websites.
Cripsey would not go into the specifics of Myer’s partnership with Marketplacer CEO Jason Wyatt, but said it represents more than just a deal for a technology platform.
“Partnering allows us to reduce the amount of capital investment and man hours required to bring new things to market,” he said. “We’re not just buying a technology platform here. We recognise that running a marketplace online is a type of IP that we don’t, by definition, have experience with today.”
Myer’s test-and-learn toe dip into the world of marketplace comes as the company looks to refine its New Myer strategy amid slower than expected progress on its turnaround.
Myer’s bottom-line profit dropped 80 per cent in FY17, while average top line sales grew only 0.1 per cent, with CEO Richard Umbers conceding in August that it is “clearly taking longer” to achieve the core goals of the New Myer strategy than was originally anticipated.
Digital, however, has been a bright spot for the business under the stewardship of Cripsey, alongside sustained investment since 2015, having grown by 41 per cent in FY17 to $177 million in revenue.
The addition of the marketplace could stand to add millions to that figure if successful, with industry competitor Catch Group this week saying it is generating $1 million in sales per week through its own platform, which it launched in June.
Sales drop confirmed
Myer has reported a 2.8 per cent fall in first quarter sales to $699 million at its highly anticipated strategy day.
Comparable store sales in the 13 weeks to October 28 were down 2.1 per cent but Myer, which has been closing some of its department stores in an effort to cut costs, says sales per square metre rose 3.6 per cent.
Myer chief executive Richard Umbers said the retailer was now focused on what he indicated was a more meaningful second quarter.
“Sales during Q1 FY2018 reflect the continuation of challenging retail conditions characterised by heightened competition and subdued consumer sentiment,” Mr Umbers said on Wednesday.
“Myer remains focused on the upcoming and more significant trading periods of spring racing and Christmas.”
Myer released the figures in a brief trading update to the Australian Securities Exchange along with a briefing to update investors on its strategy.
Its largest shareholder – Solomon Lew’s Premier Investments – had repeatedly and publicly urged Myer to release its first quarter sales figures in the interest of transparency.
Umbers said online sales grew by 67.8 per cent on the previous corresponding period.
“Today we signalled a heightened focus on the growth of our very successful omnichannel business as well as experiential retail to create inspiring destinations,” said Umbers.
“We also highlighted the importance of our Myer one program and the increasing use of customer data to personalise our offer, both in terms of range and services in store and through marketing activity.
“All of Myer’s metrics in digital and online and moving strongly in the right direction. Sales, profitability, click and collect take up, website traffic and conversion are all increasing. Cost of fulfillment and fulfillment times are falling. Building on the strength of the business is a key focus going forward.”
Myer also announced the acceleration of new retail concepts to be introduced across its store network including six new food partners, five upgraded food offers and 12 locations for new beauty and grooming services.