Lessons from BAUHAUS: Why are my marketplace listings not converting?

There has been a marked acceleration in the number of marketplaces launching in recent times, with Argos being the latest to go live.

But what happens when you’ve investigated a new channel, made the investment to launch, got your products live (which let’s be honest, can be a bit of a battle), and then you sit back and the sales don’t live up to your expectations?

It was refreshing to see Johannes Wechsler, SVP E-Commerce & Digital (Chief Digital Officer) at BAUHAUS address just this issue in a LinkedIn post.

TL;DR Firstly you need the platform, then you need the products customers are actually looking for that are missing from your existing assortment, and then you need to optimise to ensure that partner products are surfaced and that they’re not disadvantaged with different payment offerings or services to your core range.

There are lessons to be learned for all retailers and brands running their own marketplace. But if you’re a marketplace seller and you’re not seeing the sales that you expected, read on to discover the lessons from BAUHAUS and that should give you the questions you should be asking any underperforming platform that you trade on.

BAUHAUS are one of the leading home improvement retailers in Germany and operate in multiple European countries. Their stated aim was to significantly expand their assortment beyond its physical stores and existing online offering.

The new marketplace was to introduce thousands of additional products from carefully selected third-party sellers, delivering greater value to existing customers while also attracting new customers seeking a broader and more diverse range of products.

It’s a year ago that they received their first marketplace order and with 100 sellers adding almost 100,000 new products, Johannes says that the quality is right where it needs to be, with product reviews, on-time delivery, and return rates comparable to BAUHAUS’ own assortment.

But, while marketplace products represented a big part of BAUHAUS’ assortment, they were getting a very low share of product page views. This wasn’t a sales issue; it was a visibility issue. Johannes reports that his insight has led to important changes: BAUHAUS are reworking their search algorithms to ensure promising new products can climb the ranks.

They have analysed what works and what doesn’t, allowing them to build a whitespot strategy to consciously fill gaps in their assortment – like bringing in specialised brands, price points, or product types our customers were looking for.

BAUHAUS are investing in a better, unified customer experience, for example by expanding the payment options for marketplace products.

Ask anyone that’s launched a marketplace and they’ll tell you that it’s incredibly hard work, but it’s not enough for a platform to launch, it’s the next phase of optimisation and driving sales for their seller partners that determines if the marketplace is judged a success or a failure in the longer term.