Target taps Shopify to juice its Amazon-like platform
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Target is teaming up with Shopify to expand the retail giant's third-party marketplace platform to better compete with Walmart, Amazon and other retailers.
Why it matters: Target's third-party marketplace, dubbed Target Plus, sells 2 million products from 1,200 brands.
- That's a fraction compared to Walmart and Amazon, which reportedly have 135,000 and 2 million sellers, respectively.
Driving the news: Smaller brands and businesses that use Shopify's ecommerce software to manage their online sales can now apply to sell their products through Target's website and in its stores, the retailer announced Monday.
- While Shopify already works with Amazon and Walmart in a similar way, its deal with Target is the first to include physical store distribution.
The big picture: Traditional retailers including Macy's, Kroger and others have been steadily building their third-party marketplaces over the past few years.
- The platforms can help retailers attract sales traffic from a larger assortment of goods at higher margins, because they often don't hold inventory.
- Smaller shops and brands, on the other hand, can get in front of exponentially larger customer bases through third-party marketplaces and benefit from being associated with known retailers.
My thought bubble: More customer traffic also leads to more customer data, which larger retailers can also use to sell search ads on its sites.
