Michaels, David’s Bridal Take Cues From Amazon and Launch Marketplaces

Before third-party SaaS platforms like Shopify and BigCommerce existed, claiming an online presence was already a heavy lift for sellers. So was integrating with third-party sellers to get more distribution. It ultimately left the playing field to big box retailers like Walmart and Target and, of course, eCommerce giants like Amazon, which all had the ability to offer ease, convenience and variety to consumers.

Fast forward to 2023, and the retail industry has vastly evolved, with more solutions becoming available to retailers of all sizes and verticals, enabling them to offer a much more diverse variety and well-rounded customer experiences. That accessibility caused a movement.

Now specialty retailers are looking to capitalize on their niche further by becoming platforms themselves and giving third parties distribution by allowing them to sell to their customer base.

Just last month, arts and crafts retailer Michaels launched its third-party marketplace with products from a curated selection of sellers, increasing its product assortment from 250,000 to more than 1 million SKUs.

The specialty retailer also noted that it would accept applications from sellers seeking to enter product categories such as journaling, soap making, candles, arts and craft supplies, toys and yarn. The venture is strategic as it allows shoppers to consider other options while still keeping them onsite.

“The launch of Michaels’ curated marketplace for arts, crafts, and décor is the next phase of our ongoing digital transformation to be the destination for all creatives to get inspired, learn, shop and create,” Michaels Executive Vice President of Marketing and eCommerce Heather Bennett said in a press release. “By more than quadrupling our online assortment across categories including candle and soap making, leather work and more, Michaels will ensure every customer can find what they need to bring their creative dreams to life no matter their craft.”

Bridal retailer David’s Bridal also launched its own third-party marketplace in January, with a different take. Instead of enabling businesses to offer the same types of products it does — wedding dresses, bridesmaids’ gowns, shoes and accessories — David’s Bridal looked to offer a natural extension of its service with the launch of Pearl, a planning platform and vendor marketplace designed to help brides find venues, photographers and caterers, among other services.

“Brides told us they wanted easier planning tools, a more seamless experience from planning to buying the dress, and more ways to earn Diamond points,” David’s Bridal CEO Jim Marcum said in a statement. “Pearl also addresses pain points and gaps in the market couples experience when planning their wedding.”

With a complete consumer experience comes full integration. Pearl by David’s looks to complete the wedding day experience for the consumer, but it also plays into a larger strategy for the company — customer loyalty. The retailer has incorporated Pearl into its loyalty program, a core offering launched during the pandemic, by offering consumers the same incentives they would receive with a regular David’s Bridal purchase.

Floral arrangements company 1-800-FLOWERS is another specialty retailer that has been inspired by the potential of third-party marketplaces. The floral company launched its own solution called the Gifts & More, a platform that offers giftable items from local sellers.

“In addition to our unique floral arrangements, we’ve further expanded our assortment to include a wide variety of distinctive gifts with Gifts & More, our new marketplace. This addition will help us continue to bring new trends to market as we support local independent sellers, providing them with an innovative platform to sell their goods on a national scale. Giving is truly the gift, and we’ll continue to look for opportunities to broaden our product offerings as we seek to solve more of our customers’ gifting needs,” said Abhay Patel, President, 1-800-FLOWERS, at the time of the launch.

A Win for Both Sides

These marketplaces are beneficial to both retailers and third-party sellers. For one, David’s Bridal lets its sellers know that through their marketplace, they “gain access to 92% of brides in the U.S.,” and storefronts can be created in under five minutes. Upon publication of the storefront, interested consumers can start buying from those sellers.

Overall, these moves by David’s Bridal, 1-800-FLOWERS and Michaels follow cues from big players like Walmart and Amazon, which have both claimed a significant presence in the third-party marketplace. In fact, in May 2022, Walmart’s marketplace was noted to have surpassed 150,000 sellers, representing a 66% increase compared to the number registered a year earlier.

Walmart also recently looked to entice third-party marketplace sellers with new incentives that included providing a limited-time offer to new U.S.-based sellers: a commission rate reduction of up to 25% for 90 days when they launch on the marketplace and try several tools and services.

Meanwhile, according to reports, nearly 60% of the units sold on Amazon are from third-party sellers. But recently, the large third-party representation has caused consumers to question Amazon’s tactics and the overload of products some say has made the platform feel cluttered. Others say that it has only made the platform more attractive because its product assortment is so comprehensive.

Taking note, arts and crafts retailer Michaels has launched its program with caution and has taken the opportunity to promote quality with its invite-only program. While the approach may feel limiting to potential sellers, it allows Michaels to maintain brand control by ensuring products sold on the marketplace align with the company mission and offer an experience customers would expect from the retailer. This includes both the quality of the product but also the service. Sellers can also be confident that Michaels has taken brand safety into account.

All in all, if done right, both specialty retailers and sellers can benefit from the solution, with retailers expanding on their focused consumer experience and sellers potentially dealing with less competition in the marketplace and having peace of mind that their products are featured alongside other sellers of the same quality and measure.

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