News is out that the Tesco Marketplace is to be relaunched, giving shoppers the ability to shop a range of products from third party sellers alongside their grocery shopping on the Tesco website.
The Grocer broke the news, noting a job offer for a Business Development Manager – Marketplace, to work out of Tesco in Welwyn Garden City. The job offer reveals more details of the Tesco Marketplace, with the role described as:
Marketplace is a key pillar of our strategy to be ‘Easily the Most Convenient’ grocer, offering customers the opportunity to shop a broad range of 3rd party products, alongside their core grocery basket, seamlessly on Tesco.com. To support with building Marketplace, we are in need of a Business Development Manager who will help us translate our strategy into action by recruiting and managing a set of sellers to deliver a compelling range proposition for customers and achieve our GMV target.– Tesco Careers
The job role includes recruiting a compelling set of sellers to sell on the Tesco Marketplace, and prioritising sellers using a data driven approach that aligns with Tesco’s strategy on range offer. As well as working with sellers on merchandising and promotional strategies, the successful Tesco Marketplace Business Development Manager will also “identify product areas for future Marketplace growth based on understanding of commercial performance and customer opportunity”.
What will be interesting is how many lessons have been learned from their previous marketplace initiative. First challenge will be getting sellers to trust them again. We heard from many merchants who had committed to stock orders for Christmas 2018 on the back of anticipated sales on the Tesco marketplace. Estimating some 300-400 merchants selling on Tesco, sales were relatively strong and collectively they were left looking at the loss of multiple hundreds of thousands of pounds worth of turnover. They then struggled to replace the sales on other venues and there was a fair amount of pain felt.
The next lesson for Tesco is not to be overly protectionist. Amazon are the standout retailer led marketplace for allowing direct competition from their third party sellers. Tesco, and others like Halfords, were known for refusing third party sellers listing the same products the retailers already offered and this isn’t a recipe for instant success. Firstly the best part of a marketplace is competition ensuring that the best offer for consumers is available, and secondly as soon as a top selling product starts to be sold direct, the 3rd party seller that previously listed on the marketplace starts to feel aggrieved when they’re blocked from stocking it in the future.
The third lesson is operational – the world has moved on since 2012 and it will be essential for 3rd party retailers to easily integrate their online operations with the new Tesco Marketplace. Multi-channel inventory and order management and shipping tools will be essential to ease adoption of the platform and manage sales on the marketplace.
Regardless of the issues with the previous Tesco Marketplace, which launched relatively quietly in 2012 and closed in 2018, the retailer will doubtless be attractive to 3rd party sellers who are all too aware of their massive customer base and how exposure on the Tesco website will significantly boost their revenues. Watch this space with interest!