Uncle Joe Radio

Scot Wingo posts a great run-down in his Amazon Strategies blog of Walmart opening up a limited-run marketplace. Like Wingo, I see a greater online landscape of major retailers offering marketplace extensions to their sites in the future.

The reason a big company like Walmart would even consider exposing their customers to another vendor’s goods is this: no matter how big you are, there’s always more stuff that your customers might want that you just can’t afford to have sitting on shelves somewhere. Even in the online world where those shelves are actually pallet racks in some enormous warehouse, there’s a point that it just isn’t cost-effective to carry stock on the off-chance that someone, somewhere, might buy one some day.

It’s all about selection…

All those “once in a while” occasional and add-on purchases to the usual, main demand items represent what’s known as “the long tail” of merchandising. Even Walmart, as big and abundant as it seems to be, doesn’t carry Cindy’s tie dye clothing.  It doesn’t carry the whole line of Ken Mills’ hiking and work boots. If a Walmart could figure out a way to get Cindy or Ken in front of their customers (to keep them happy when they look for and find tie dye or boots), they increase the size of that “long tail”.

This isn’t a new idea.  At the turn of the 20th Century, Sears, Roebuck & Co. revolutionized commerce by offering a mail-order catalog across the expanse of America that would see it become the largest retailer in history by the 1950s.  Sears was the Walmart of its era, offering a selection of goods that no other retailer could match, with a convenience and price unheard of at the time.  And like eBay or Amazon today, Sears was often drop-shipping those orders directly from the manufacturers or distributors of those products when it didn’t have those items in its own warehouses!  Walmart is looking at the same play on the Internet. 

…and customer satisfaction

Wingo also notes what the big joints want to avoid is customer disappointment when looking for something and not finding it there.  This means customers have to shop elsewhere for what they want — and no retailer wants to see that.  If it happens often enough, he muses, the customers will just start shopping over at the place that does have what they want.   On the Internet, where the ability to find anything and directly compare prices and selection is getting easier by the day, big retailers have got to be reliable destinations that fulfill a customer’s  wants.

It’s one of the better pieces Wingo’s put together.  I encourage you to visit and learn more.  I’m sure you’ll see more companies jumping into the marketplaces pool in the future.

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eCommerce by Uncle Joe Adamson