Why Best Buy Marketplace should be your next sales channel

Welcome and about ChannelEngine

00:02:57 Damian Speck: Let's get things started. I'm Damian, and I'll be your host for today. We have a great session planned with some excellent content around Best Buy. For prospective sellers, or those prepared to get launched, this is for you. We'll hear from Best Buy directly on how to succeed and how to grow, and also from Spreetail about how they successfully launched and scaled on Best Buy via ChannelEngine.

00:03:52 Damian Speck: I am Channel Partnerships Manager for ChannelEngine, based here in New York City, ChannelEngine's US headquarters. My role is to bridge our internal teams, which means tech, sales, and account management, and our external channel partners, which include many major retailers, e-tailers, and e-commerce stores, and of course Best Buy.

00:04:14 Damian Speck: For those of you not familiar with ChannelEngine, we are multichannel management software. What does that really mean? For sales and commercial leaders, it's about brand control. The solution provides real-time inventory synchronization, which is massive if you have a large catalog, so you don't have to deal with the nightmare of overselling. We introduced AI-powered mappings, which help with syncing product data for every local audience. We're not just talking about a couple of channels in the US. This is scaling globally.

00:04:51 Damian Speck: We offer dynamic pricing guardrails to maximize your margins and do it automatically. We also have an extremely extensive pricing engine that you can leverage to win in competitive categories. If you have an existing connection via Shopify, a PIM, or an ERP system like SAP, or SFCC, we can help connect you to 1,300 marketplaces around the world. If you have any questions, please let us know. We'd love to talk to you about how to help set up on Best Buy and more.

00:05:38 Damian Speck: But less about ChannelEngine, let's talk about Best Buy and how we can get you set up. Thanks to the team for joining. We'll do some quick intros and then get started. Let's kick it off with Jonathan. The floor is yours.

Speaker introductions

00:05:55 Jonathan Greer: Good afternoon. Jonathan Greer. I have the pleasure of leading the US marketplace team at Best Buy. We are a new and exciting platform. We've been live for about a year, and we just celebrated our anniversary in the middle of August. I'm excited to talk more about the platform and the opportunity. Before I do that, let me give you a little history on Best Buy.

00:06:19 Jonathan Greer: We're a 60-year-old company. We've got about 1,000 stores in the US and Canada and 80,000 employees. We are really at the intersection of technology. Our mission as a company is to enrich consumers' lives through technology. We are truly the only and largest omnichannel retailer that still participates in consumer electronics, which is an interesting and fun category right now if you think about all the innovation and AI happening in the world. We are right at the intersection of new technology, new trends, and how that gets brought to market.

00:07:04 Jonathan Greer: Our marketplace launched in August. We are well on track, and we've said this publicly, to do over a billion dollars in the first year. We are a curated platform at the seller level, but fairly open at the offer and item level. We spend a lot of time up front vetting our sellers against the categories and trust metrics that matter most to us. But once approved, we don't curate what you can sell, so we are an open platform in that regard. We have Buy Box competition, and we aim to create a level playing field between 1P and 3P, which we can talk more about as well.

00:07:40 Damian Speck: Love that. Millie, you're up.

00:07:44 Millie Anderson: Good morning. I am in the Midwest, so it is still morning here. I'm with Spreetail. We are the number one oversized e-commerce accelerator. We specialize in big and bulky products across home, garage, and outdoor categories. We were the first e-commerce accelerator to surpass $1 billion in annual revenue, and today we are powering more than $1 billion in GMV annually. We help brands scale across 20-plus marketplaces throughout North America and Europe, including Amazon, Walmart, Target, Best Buy, and other big marketplaces.

00:08:24 Millie Anderson: What makes us unique is that we cover the entire e-commerce operation: marketplace strategy, listings, pricing, advertising, inventory, fulfillment, returns, and customer experience. We also have nine fulfillment centers throughout the United States and some in Europe. That gives us the largest seller-fulfilled Prime network, with 85% next-day delivery coverage and 99.8% same-day shipping. Ultimately, we act as an extension of brands, removing the complexity of e-commerce and giving them the infrastructure, technology, and expertise to expand faster, reach more customers, and drive incremental growth wherever customer demand is. That's a little bit about Spreetail.

The Best Buy customer and marketplace opportunity

00:09:12 Damian Speck: Spreetail, the accelerator. Let's start with the opportunity itself. Best Buy, of course, is well known for consumer electronics. I've been going there for many years. But the marketplace also brings complementary products and categories. Millie, you were talking about a category you've been working with recently, which is kitchen products. So it goes beyond the core categories that most are familiar with.

00:09:42 Damian Speck: Jonathan, let's start with you. What makes Best Buy customers different from customers on other marketplaces, and how do the product mix and average selling price tend to compare in your experience?

00:09:55 Jonathan Greer: First and foremost, we've been around for 60 years and 220 million customers have shopped at Best Buy. We know a ton about our customer. What makes Best Buy a little different from other retailers is that most of our transactions are 100% traceable. If you think about what you're purchasing at Best Buy, you tend to use a credit card, so our access to customer data and information is quite strong.

00:10:21 Jonathan Greer: People shop Best Buy because they trust us. They trust that they'll come into a store and get really good advice. If they're opting for an installation or a service where you're letting people into the home, a lot of people shop Best Buy because of the protection associated with Geek Squad and the confidence to buy. Taking that as a premise, our customers tend to be higher household income, with a fairly even split between male and female.

00:10:53 Jonathan Greer: Our best shoppers are not shopping with us 10 or 15 times a year. Purchase frequency, if you think about upgrading technology, is less frequent, so we see our best shoppers only a few times a year. But our ASPs are much higher than you would typically find on other marketplaces. That said, most of our sellers would tell us that the composition of what they sell with Best Buy looks different from other platforms, most notably what they might sell on that big platform in Seattle or that big platform in Arkansas.

00:11:28 Jonathan Greer: Best Buy's business is built on what we call three lighthouse categories. That's computing, where we have incredibly high market share, large appliances, and home theater, which is largely televisions. Think larger products and more complex supply chains that typically involve an installation. Our strategy for marketplace is to build around that assortment, but there's also a tremendous amount of tech and tech-adjacent categories we're building around, which we'll talk more about later.

00:12:02 Jonathan Greer: That's a good summary of who our customer is: higher ASP, higher household income, and tends to skew a little more male. Best Buy does incredibly well during giftable shopping moments outside of the typical upgrade cycles you would have with your technology.

Seller and category fit

00:12:22 Damian Speck: Let's reinforce this message. Which sellers' products and categories would be the strongest fit for Best Buy?

00:12:29 Jonathan Greer: The way we talk about our assortment strategy is "tech and tech adjacent." Of course, we want to sell more traditional tech, and we want to create competition on all the categories Best Buy is really strong in. That's been a design principle since we launched the marketplace. We are focused on bringing on the right trusted sellers, and in certain categories we might focus primarily on authorized sellers. But there are a lot of tech categories where we are significantly under-assorted.

00:13:00 Jonathan Greer: If you walk around Best Buy stores into our automotive section, you'll see we carry car stereo. But if you look at technology products like jump starters, tire inflators, a larger selection of dash cameras, and radar detectors, they are all wildly under-assorted. We've already seen some of those tech products and categories, which are not core to our assortment, accelerate. We have a huge focus on accessories, in terms of how you accessorize the hardware you're buying.

00:13:30 Jonathan Greer: Then we talk about tech adjacent. We sell large appliances, and we feel we have a right to win more broadly in the kitchen. We think about cookware and kitchen gadgets. Beyond just selling Ninja Creamis and Vitamix blenders, we feel we have a right to win much more broadly in small appliances, kitchen, and cookware. We sell more laptops than anyone in the US, so we feel we have a right to win around bags, peripherals, luggage, and categories like that. We sell tons of gaming consoles, and we want to win and own gaming chairs, office furniture, desks, and things like that.

00:14:10 Jonathan Greer: If you come into our marketplace through the Mirakl platform, you'll see which categories are open for sellers to set items up through our taxonomy. Logically, where we're seeing the most success is on the natural adjacencies to our core business.

00:14:27 Damian Speck: You see so many different electronics products, maybe very niche, that will fit Best Buy. It could be home office, it could be beauty electronics. You see a lot of these popping up. For any seller that's interested, it's not just laptops and TVs, it's really about expanding your reach.

Why Spreetail added Best Buy

00:14:46 Damian Speck: From Spreetail's perspective, why did Best Buy make sense as an additional sales channel, and how does the average selling price compare to other marketplaces?

00:15:00 Millie Anderson: When we were looking at Best Buy, we were very focused on electronics categories. But when we started adding our entire assortment, we saw our home and garden and vehicles and parts categories really take off on Best Buy. The non-electronics categories make up the large majority of what we ship, with electronics actually a small slice of the pie.

00:15:25 Millie Anderson: What's been the most noticeable is the average order value. Best Buy customers are spending meaningfully more per order than on other marketplaces, in the neighborhood of double what we see on Amazon. On Amazon we were usually around $117 over the last trailing 11 months, and on Best Buy we're seeing an average order value of $229. So we're seeing larger purchases on Best Buy, which ties into what Jonathan was saying. We see a lot of different categories taking off.

00:16:02 Damian Speck: That's really telling. You'd think it's going to be just electronics, but home and garden is crushing it. That's really interesting to hear.

1P and 3P, seller evaluation criteria

00:16:13 Damian Speck: Jonathan, back to you. For a brand, authorized reseller, or distributor evaluating Best Buy, what should they consider before applying? Most importantly, how do Best Buy's 1P (first party) and 3P businesses work together, and where can there be physical store opportunity for marketplace sellers? That is not the norm, and I can tell you firsthand that not a lot of marketplaces have that.

00:16:49 Jonathan Greer: Our philosophy is that we work quite closely with the 1P team because we all serve the same customer, and we're trying to give them more reasons to shop at Best Buy beyond traditional categories. There's a lot of work being done to create a level playing field across the platform. Obviously, our business grew up in stores, and we created an e-commerce business that has taken off significantly in the last 15 years, most notably during the pandemic. In any given quarter, 35 to 40% of our business is through e-commerce channels, so the digital mix is quite high and consumers are very comfortable shopping.

00:17:32 Jonathan Greer: We see the stores and our 1P business as a competitive advantage that we would love to give sellers access to. Nothing brings us more joy than when a seller has success on the marketplace, the buying team sees early signals, and they decide to bring that item into the 1P .com assortment, the store assortment, or some combination. We've already had multiple examples where that has happened.

00:17:55 Jonathan Greer: We've also learned about categories we previously exited that have since come back in terms of customer demand and are being brought back into stores. Music and movies is one of those. For anyone who's been a Best Buy shopper for a long time, you might remember we used to have a whole big department in our physical stores. People are still buying that stuff, particularly vinyl, so you'll start to see more shop-in-shops pop up in our ecosystem. It's based on signals we're seeing in the marketplace. Anywhere we see a lot of unit velocity, the category teams are relooking at those categories.

00:18:33 Jonathan Greer: First and foremost, our platform is built on trust. Said transparently, we don't have tolerance for sellers who are not going to do the right thing for customers, and we don't see our customers frequently enough to get a lot of chances to make mistakes. What we look for is a proven track record on marketplaces. We spend a lot of time looking at seller reviews and customer reviews of the product, and understanding whether you're the brand owner or the reseller and whether you're authorized, because we really want to understand who you are as a seller.

00:19:03 Jonathan Greer: Transparently, we've got about 1,500 active sellers on the platform. Our goal is not to get to hundreds of thousands of sellers. We believe our strategy can win with thousands of sellers versus hundreds of thousands, and that's the type of platform and partnership we're creating.

00:19:27 Jonathan Greer: Our sellers need to be able to do their own fulfillment, or be comfortable working with partners like Spreetail, who have incredibly built-out supply chains and logistics and can offer really fast, competitive shipping. We are consistently evaluating whether we need to build fulfillment. Obviously, we know our competitors have FBA or WFS, and we know the value prop that adds. We will continue to invest in our shipping products and shipping templates, but as of today we do not offer fulfillment.

00:19:58 Jonathan Greer: You've also got to be a category fit. We're not trying to sell vitamins, and probably not food categories and things like that. We do sell coffee because it's very adjacent to the coffee and espresso machines we sell, another example of category adjacency. Those are the large criteria. You apply, you go through a traditional trust and safety vetting, our team evaluates it, and then you're invited to apply. I know we're going to talk more about what onboarding looks like, but that's largely what we're looking at.

Application and onboarding

00:20:31 Damian Speck: Once the seller sees the opportunity, it's time to take action, from application all the way through go-live. Jonathan, what does Best Buy look for in a prospective marketplace seller? You mentioned category fit and logistics. Is there anything else you can add?

00:20:52 Jonathan Greer: It's really a combination of all those factors, but we're not reviewing applications through a machine. We're a fairly high-touch platform, and our team goes through each one. It's a combination of prior history, reputation, and experience on other platforms. There's category fit. And then, do you have the basics around fulfillment infrastructure?

00:21:19 Damian Speck: What can an approved seller expect from Best Buy's onboarding process, from acceptance all the way through going live?

00:21:30 Jonathan Greer: We want to have a relationship with our sellers. I feel strongly that that's a point of differentiation and something we can bring, particularly because our intention is never to have hundreds of thousands of sellers, but to work with a really trusted, curated list of partners. We have a dedicated US onboarding team that works directly with sellers on all steps, and our goal is to meet the seller where they are. Some sellers are very familiar with joining Mirakl marketplaces. They are already in the Mirakl Connect infrastructure, or they're familiar with the APIs. We've had sellers get set up in less than a week.

00:22:08 Jonathan Greer: Because we run a unified catalog, if you're a reseller who wants to list offers against what's already in our catalog, you're not necessarily setting up net new products, and you can get set up extremely quickly. Our team works with you on all the basics. You go through know your customer and checks through Payoneer. You go through item setup and item approval, and set up your shipping templates, your returns processes, and how you're going to handle customer service. There's a checklist of things, and then your store is identified as ready to be open. We do one more trust and safety check and we open your store. Once your store is open, if you've loaded inventory against your active offers, you can start taking orders and you're off to the races.

00:22:53 Jonathan Greer: We've seen sellers come on board in less than a week, and we've seen sellers come on board in 90 to 120 days. We do want to work with partners who are ready to go. We've got a finite number of resources, and every seller is at a different stage of maturity or expansion plan. We are looking for partners who are ready to go so we can make the most of the resources we have.

00:23:15 Damian Speck: I've seen some marketplaces have a one to three month delay with onboarding, whether it's a pipeline issue, not enough staff, who knows. It's good to know the Best Buy team is ready to take on applications and get you live as soon as possible.

Spreetail's launch of nearly 10,000 SKUs

00:23:33 Damian Speck: Millie, going back to you. You've experienced this process. What did it look like on your side, and what helped Spreetail prepare for onboarding and launch almost 10,000 SKUs? You're not a small operation by any means.

00:23:49 Millie Anderson: From the seller side, the process was very straightforward, like Jonathan described. Having experience with Mirakl integrations definitely helps a lot. Launching a catalog across multiple marketplaces a couple of times helps you know the tips and tricks of what to look at when launching on different marketplaces.

00:24:10 Millie Anderson: What really helped with launching the 10,000 SKUs on Best Buy, which we were able to do in about a week to a week and a half, was using ChannelEngine's AI-powered mapping and knowing what to anticipate when it comes to attributes. ChannelEngine has a mapping AI tool that we used to map our attributes, which was super helpful when we imported those attributes into ChannelEngine. The AI mapping tool then helps us figure out which attribute goes to which mapping for Best Buy. That cut back a lot of hours of setting up our catalog for Best Buy, and it helped us not need as many resources. This was mostly managed by me and maybe three other people helping fill out some missing attributes.

00:24:57 Millie Anderson: ChannelEngine definitely helped us launch on Best Buy, and we were able to do it very efficiently. I truly appreciate all the support they've given us and showing us all their tools.

00:25:11 Damian Speck: Definitely appreciate that. To chime in, Jonathan, your team reaches out whenever there's an issue. There's always outreach from the Best Buy team saying, "Hey, can you help the seller? Can you jump in real quick?" Not all marketplace teams do this level of interaction. They may stay silent and then the seller has to figure things out. That's a testament to the Best Buy team being willing to proactively make sure the seller can succeed.

00:25:38 Damian Speck: Thanks, Millie. Our solution does help cut time to go live. We see this time and again. For sellers with 10,000, 20,000, or 50,000 SKUs, launching a new channel is daunting. It's the feeling of "I've got to do it again." If you know how to use AI and leverage it, you can move faster. That's monumental.

Listing quality, product content, and reviews

00:26:02 Damian Speck: Moving on to building a strong presence after launch. It's one thing to say we're live and present on a marketplace. It's another thing to actually have a strong presence and do well. Launch is only the beginning. Jonathan, what programs or tools can sellers use to improve their listings on Best Buy, maybe focusing on product attributes or review syndication?

00:26:29 Jonathan Greer: We're moving fast in this space. It's changing a ton as brands and retailers all learn about AEO, GEO, and how traffic is coming from different sources with all these new LLMs. But it all starts with really good foundational product data. When we launched the marketplace, we took a hard look at our 1P content requirements and asked what's truly required versus what's optional. If I owned the brand, I would try to fill out every optional attribute possible, because rich, clean product data, particularly nuanced specs in certain categories, becomes incredibly important. So step one is really clean attributes.

00:27:18 Jonathan Greer: The other thing on our product detail pages is the product description and product bullets. We have a certain structure for how that works, and I would really spend time on it, because that content is now getting pulled into different ways we use AI to summarize content.

00:27:35 Jonathan Greer: With reviews, we have two connection options for sellers today. If you're with Bazaarvoice, we have a program with them for both review generation and syndication. And about a month ago we launched a partnership with Wholescale, which also has syndication and review generation capabilities. Our goal is to extend to additional partners down the road. We also have a reviews accelerator program, a low-cost product offered through our Best Buy Ads retail media team, which allows sellers to incentivize customers to leave reviews. It's based on a post-purchase experience, and it's a fairly low-cost way to generate some quick reviews if you're also able to generate some sales.

00:28:21 Jonathan Greer: We're making investments in two areas, and we'll be in a position to share more in the next couple of weeks. One is video: the ability to upload video in addition to great images and assets on your PDP, at no cost to the seller. The other is what we call manufacturer content, which most people in the industry know as A+ content. We're in the final stages of setting up options through a third party to syndicate manufacturer content, with the goal of owning that solution over time. We have so much to build right now that we're balancing what to build versus what to partner on. But we know all of these are critical to good PDP hygiene.

00:29:07 Jonathan Greer: For those who shop Best Buy, we also have our own internal agent on the site called Ask Blue. Ask Blue looks at all the things I just mentioned as a primary way to compare and give customers solutions and options to their questions. I cannot emphasize enough that the foundation of really good PDP content is key to winning at Best Buy.

00:29:30 Damian Speck: I think that's not just Best Buy, it's an overall message to sellers. Listing quality is huge. Think of yourself as a consumer. You go to a product page and you don't know if it's the same product you're looking at somewhere else. If it doesn't have all the information you're looking for, you cast it out. In our solution, Millie, you know this, we have a traffic light system, orange, green, and red, to show whether you're good to go in terms of the minimum attributes, and then you have all the optional attributes in front of you. Your e-commerce team can fill out, like Jonathan said, as many of those attributes as possible. It creates confidence in the seller, and from the marketplace perspective it helps reduce returns. It's not just about going live, it's about having a strong presence and listing quality.

00:30:19 Damian Speck: Millie, which processes or programs have helped Spreetail improve listing quality and performance at Best Buy?

00:30:26 Millie Anderson: I'll piggyback off what Jonathan said. We are very excited for video and A+ content coming down the pipeline, because we love seeing that on our marketplaces and our brands love seeing it. Something else we leverage is product reviews. We use Bazaarvoice to syndicate reviews, but reading through the feedback from your customers and implementing it on your product page is huge. Maybe something is not being communicated clearly enough on the listing, and you need to go back and clarify so customers are not confused. That's been a key piece on Best Buy: reading through what customers are saying and optimizing the product page so they know exactly what they're buying and that it's the right fit for what they're looking for.

00:31:13 Damian Speck: That's a great tip. The fact that you're actively looking for those nuggets and adjusting accordingly is great.

Fulfillment and delivery promise

00:31:22 Damian Speck: Moving on to fulfillment and delivery times, which is a huge piece as well. I remember reading a research paper about the biggest factors in a consumer coming back to a marketplace. It wasn't about the actual delivery time, like getting the product in a day or two. I forget the percentage, but it came down to consistency in delivery. That was one of the main factors in consumers coming back to a destination to purchase: confidence that they can rely on the date. It's a huge one to pay attention to.

00:31:53 Damian Speck: For seasoned sellers this may be familiar, but for others it's something new. Jonathan, how does Best Buy translate fulfillment settings within Mirakl, which we partner with, into the delivery promise a customer actually sees, and what should sellers understand when configuring those settings?

00:32:10 Jonathan Greer: With the launch of our marketplace, we translate the shipping settings from Mirakl into an actual date on the customer PDP. So you're setting an actual date, not a range, for the customer's expectation. For any seller on the platform or thinking about joining, it's important to understand how our shipping product works and how we translate Mirakl settings into actual get-it-by dates, because you're ultimately measured on whether you hit that date, whether you're early or whether you're late. Like you said, Damian, I look at early and late defects. We want to be accurate, particularly when delivering $1,000 products that require a signature, and there are other dimensions when you're selling consumer electronics that reinforce the need to be accurate.

00:32:57 Jonathan Greer: Additionally, as I mentioned, we have a competitive Buy Box, and shipping speed and shipping accuracy are a component of what feeds it. I won't get much more into that, but like any competitive Buy Box, it's a combination of a lot of things: price, competitive speed, and the seller quality and experience they provide. We would have no problem rewarding 3P sellers over our 1P inventory if they have a better quality promise or faster fulfillment.

00:33:27 Jonathan Greer: I see a question: is there an integration with Amazon Multi-Channel Fulfillment? Yes. Mirakl has a direct connector you can leverage, or you can integrate multiple ways, but the short answer is yes. We see a fair number of our sellers leverage Multi-Channel Fulfillment for both speed and for sharing inventory, versus taking on a new channel with your own supply of inventory.

00:33:57 Damian Speck: Thanks for the question, Sean. That was a good one. Millie, based on what Jonathan was saying and your experience, what have you learned about balancing realistic, on-target fulfillment times with competitive customer-facing promises?

00:34:13 Millie Anderson: When we launched Best Buy, we were very reserved about what our promised times were going to be, so we could make sure we weren't missing any metrics. We were a little bit under. I remember when we had our top-to-top and I went out and met with Jonathan, they showed us our metrics and said, "You're delivering way sooner than you should be. You need to update your times." Thanks to the good partnership, right there in the meeting we were able to adjust our shipping templates to show faster times for our customers. It shows that by partnering with Best Buy and using their shipping templates, you can get the best shipping timeframe for customers.

00:34:53 Jonathan Greer: That's a broad problem, and I think it's a problem in general for seller-fulfilled, where sellers are trying to balance quality and performance metrics with speed. That's why a lot of people leverage partners like Spreetail, or use Amazon FBA, Walmart WFS, or Multi-Channel Fulfillment. Here's the reality: on average, our sellers promise 7 to 7.5 days and deliver in closer to 4.5. Each one of those days is worth a number of basis points in conversion improvement, so you can do the math quickly. We see a material difference when sellers shave off the first couple of days, versus going from four to three or three to two. A customer has some tolerance when buying higher-risk consumer electronics to not necessarily expect it tomorrow, though they would like it tomorrow, but they don't want to wait 7 to 10 days.

00:35:54 Millie Anderson: I'll chime in to say that in a case study we did, when we improved shipping by a day, we saw a 5% GMV lift in sales on average. If you reduce your speed by three days, you're going to see about a 15% GMV lift in that conversion.

00:36:14 Damian Speck: Massive. That's definitely something to pay attention to. It goes back to what you were saying, Jonathan, about supporting sellers and having that relationship. Granted, not every seller is going to get that level of attention, but not every marketplace engages with its sellers to make sure things are going well. There are so many marketplaces where it's just "you're live, good luck." When we talk with sellers about expansion plans, these are the things we take into consideration when we consult on why something could be your next channel, and it's not just about the GMV potential, it's about the support from the channel.

00:36:58 Damian Speck: Keep in mind that with ChannelEngine, we support various fulfillment options, including WFS and MCF. Amazon is a big one. Not everyone uses it, but we keep it synced in real time. That matters especially with shipping times, to make sure everything is lining up, especially if you're managing a lot of channels. Going back to what I said initially, overselling and canceled orders are going to be a big ding, right, Jonathan? Sellers who are constantly having to cancel orders because things are not working well.

00:37:31 Jonathan Greer: We don't like high cancellation rates, particularly when they're seller-initiated.

00:37:37 Damian Speck: You got it. That's pretty much every single marketplace.

Traffic, discoverability, promotions, and advertising

00:37:40 Damian Speck: The last topic to cover before we wrap up, and this is perfect timing, well ahead of the 60-minute mark, is traffic and discoverability. It's not just about being live, it's about getting sales and succeeding on the channel. No one wants to be on channels just to be on channels. It's about winning. Jonathan, once listings are live, what can sellers do to increase traffic and discoverability? Maybe tell us about promotional events, strikethrough pricing, or anything else that fits.

00:38:12 Jonathan Greer: It all starts with really good pricing, and our search algorithms look at pricing inputs. They want to show diversity of pricing. Sellers are able to create strikethroughs, and without getting into all the details, we have very specific logic on how our comp values are set. You can then set promotions against that comp value, also known in the industry as the MSRP or the historical selling price. Showing value to the customer tends to improve discoverability and conversion.

00:38:44 Jonathan Greer: Since day one, marketplace has been testing and experimenting with promotional events and promotional containers. Today, if you visit Deal of the Day, which is a daily deal that changes, 50% of the allocations in that program are 3P. Marketplace now also has access to all of our events. We are running a Techtober event this week, a response to the fall Prime event as we lead into the holiday season. Today we only open those promotional events to about one third of our sellers, but the goal next year is to make everything completely self-serve, so you'll be able to fully participate in events. As long as items meet the criteria, it should be less about if and more about how, and about the seller taking the initiative.

00:39:39 Jonathan Greer: Lastly, we've had a retail media commerce network for a long time. We have built capabilities for sellers and will continue to invest in them. Today there's a sponsored product offering. We will go live this year with self-serve on-site display, and the goal is to create additional products and ways for sellers to invest in driving traffic. Depending on your marketing objective, there is both paid search and other marketing products available through Best Buy Ads. It goes through a traditional sponsored product keyword auction, all built through our Best Buy Ads platform, which is a separate signup. Once you become a seller, you can sign up for Best Buy Ads, go through that setup process, and then start creating campaigns.

00:40:39 Damian Speck: You mentioned it's not going to be for every seller and there are some nuances. I would assume sellers who are live on Best Buy can contact their account manager, if there is one, to see if they're eligible. Would that be accurate?

00:40:52 Jonathan Greer: Any seller is eligible for the Retail Media Network. As part of onboarding, they should be getting instructions from my team on how to register. Promotional events and these deal containers are invite-only today, but the goal next year is to open them up much more as self-serve. We've been testing them this year and the results have been really good. We know sellers like to promote, from what we see in the industry, so our goal is to make that as self-serve as possible over the next year.

00:41:25 Damian Speck: Millie, how has Spreetail approached promotions and advertising on Best Buy, and what have you learned so far from activating these different levers for sales?

00:41:38 Millie Anderson: We've done a few partnerships and promotions with Best Buy, and we've participated in Deal of the Day. For promotions, we look at the impressions of the product, the click-through rate, and which products have lower conversion. Those are the key products we want to run on promotion, because they're getting a lot of eyes and a lot of interaction but have a lower conversion rate. That's what we've found to be the sweet spot for driving a successful deal. If you pair that with advertising behind it, you get it in front of a lot more people and into their algorithms, so we always put a little advertising spin behind it.

Key takeaways

00:42:21 Damian Speck: As we begin to wrap up, let's get some takeaways. I'd like to ask each of you for a practical takeaway: what is the most important thing for a brand or distributor to know about selling on Best Buy? Jonathan, let's kick off with you.

00:42:40 Jonathan Greer: We are a newer platform, but we have full company support and are making significant investments to improve the seller tools, capabilities, and data that sellers expect on mature marketplaces. The biggest takeaway I would leave is that we have high confidence Best Buy is an incremental channel. It's not going to make sense for every seller, but we've seen time and time again that the partners who are successful, and I think Spreetail is one of those, do incredibly well in categories you might not necessarily think of for Best Buy, like swimming pools and patio furniture. Believe it or not, we own Yardbird and we sell patio furniture. For the right sellers who have adjacencies in categories, we're confident the platform will be incremental.

00:43:33 Damian Speck: I tell this to brands all the time when they have a doubt about a channel: take the call, take the meeting if it's available, ask questions, and hear what they have to say. It's no different with Best Buy. Just because you're thinking "it's not laptops, it's not TVs, Best Buy is not going to be a fit for me." If you are a brand with growth, scale, and demand, it could be a channel for you. Definitely take the conversation. As Jonathan said, you'd be surprised by the potential for Best Buy. Millie, what would you say?

00:44:06 Millie Anderson: My key takeaway is that technology can help you get on a marketplace faster and expand faster, but the key piece that still matters most is having a catalog foundation. You need your basic catalog in place, with your most required attributes for the channel, and you need to make sure your catalog is clean and has the right content. When you have that in place, you can be successful launching on any marketplace, like Best Buy, like we were with ChannelEngine. That's how we were able to launch 10,000 SKUs: by having a clean catalog to launch with. That's the key piece to scaling on any other platform and using ChannelEngine as well. The AI mapping tools have been a huge help. We love all the AI mapping tools ChannelEngine has released. That's my key takeaway.

Q&A and wrap-up

00:44:56 Damian Speck: Love to hear it. On Q&A, I don't see any questions, but please enter them now if you have any. Sean has been contributing. Thanks for those questions, Sean.

00:45:15 Damian Speck: With that, we'll wrap up. That's all we have for today. Jonathan, Millie, thanks so much for joining and for sharing this wealth of information. We're excited to get more sellers onto Best Buy. If you have any questions about ChannelEngine, please reach out. We'd love to talk to you and see how we can help. Until next time, take care.

00:45:38 Millie Anderson: Thank you.

00:45:40 Damian Speck: Cheers.