Daily Dose of iQ: Best Buy Canada Launches 'Marketplace' to Compete with Amazon

May 07, 2015 — Allan Pulga

On Tuesday, we blogged about how Macy's and Nordstrom are using their physical store footprint to one-up Amazon in online order fulfillment.

But their strategy is just for their own inventory. Best Buy Canada also announced Tuesday that it would allow third-party vendors to fulfill orders on its website, though a feature called "Marketplace." Best Buy will also allow these vendors to use its physical stores as delivery and return locations. Marketplace is slated for launch later this year.

This is along the same lines of Amazon fulfilling orders through Staples and RadioShack locations in the past -- a practice that the latter retailers curbed for obvious reasons.

Best Buy Canada is looking to cash in on increased foot traffic, as well as a fee it charges Marketplace vendors.

But Best Buy's approach makes sense in that it will drive increased foot traffic to its stores and hopefully result in more impulse buys. Best Buy, of course, will have to vet who is selling via Marketplace, to ensure they aren't being undersold on items they already sell.

"The news comes as Best Buy grapples with major sea changes in the business as consumers rapidly migrate to buying their digital and computer products online," wrote the Financial Post's Hollie Shaw (May 6). "In March, Best Buy Canada closed all of its 131 Future Shop stores and reopened 65 of them the following week under the Best Buy banner."

Shaw noted that Best Buy will charge vendors a fee, likely per transaction, to use Marketplace.

"(Best Buy Canada) is also investing $200 million to shore up its stores and Web division, and launching a 'delivery promise' e-commerce tool allowing online customers to gauge an expected arrival date for a potential item at BestBuy.ca while they browse, before purchases are made. The Marketplace items will use Best Buy’s shipping and delivery rates," she wrote.

Topics: Retail Operations, Wireless Trends, Mobile Industry, e-Commerce

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