How a Retailer Grew Revenue and Profit Margins With its Own Online Marketplace

January 3, 2017

On every retailer’s to-do list in 2017 is surely a series of technology initiatives meant to improve efficiency, maximize opportunity, and ultimately grow revenue.

If launching your own Marketplace is not on that list, it’s time to strongly consider catching up to companies like Amazon and French electronics retailer Darty, whose prioritization of Marketplace where third-party sellers sell products alongside Darty’s own, has been a major driver of revenue and profit margin growth.

The Darty team noticed that online shoppers were gravitating towards sites with marketplaces like Amazon and Fnac.  Instead of conceding to Amazon, Darty decided to launch its own Marketplace and did so within a matter of months.

Darty’s executive-sponsored initiative to launch and operate its own highly successful Marketplace is detailed in full in this Forrester report (complimentary access provided by Mirakl).

How Darty minimized risk

Darty wisely avoided internal disruption and confusion among its buying organization by targeting nonoverlapping categories for launch.

They also ensured that adequate resources were dedicated to the success of the program with a steering committee and full-time team managing vendor/seller engagement, and shopper experience.

Read more about how a Marketplace improves the customer experience.

Finally, the team looked externally to Mirakl to provide the Marketplace platform, which dramatically increased its speed to market and drastically lowered the cost of the initiative, allowing Darty to see incremental revenue much more quickly.

Benefits of the Marketplace model

Darty’s Marketplace has generated better results in search (SEO improvements) because of the larger product catalog and new categories of goods available to shoppers. The company estimates that 20% of visits to Darty are now coming as a result of Marketplace items, due to increased visibility in search engines.

After seeing the success of goods in some of these new categories, Darty buyers have started to incorporate lucrative and promising brands from the Marketplace into their own online merchandise mix. The Marketplace allowed this retailer to test new products and brands at very low risk.

What’s more, Darty is able to generate 3X the profit margin on goods sold through the Marketplace (including any costs for Marketplace administration) than what it generates from products that it owns.

Industry analysts at Forrester Research have advocated for the use of online Marketplaces for years, saying “Multichannel retailers that are looking to compete effectively with aggressive pure-play counterparts that often offer cutthroat pricing or shipping programs will find that the marketplace model is a compelling opportunity; marketplaces provide broader assortments with lucrative margins and are less onerous to deploy than in the past.”

The firm also found that 90% of consumers said they were satisfied with their purchase from a Marketplace. And more than 90% said that they would shop with the same Marketplace again when purchasing a similar product.  The Marketplace model makes sense - plain and simple - and it's not just for large companies like Amazon.  It provides results for retailers, brands, and manufacturers of all sizes.

Read why Forrester believes every retailer must seize the Marketplace opportunity.

Barry Murphy

Written by Barry Murphy

Barry Murphy is the Director of Content and Product Marketing at Mirakl. In this role, Barry leads the alignment of Mirakl's offerings to market needs for the next generation of online commerce. Barry previously ran product marketing organizations for X1 and Mimosa Systems (now part of HPE). Barry also had a highly successful stint as Principal Analyst at Forrester Research. Barry received a B.S. from the State University of New York at Binghamton and an M.B.A from the University of Notre Dame.