Target announces partnership with Shopify to expand its 3P Marketplace.

In a move intended to expand its 3rd party marketplace offerings, Target has announced plans to partner with Shopify.

Some Background

While Target is the 4th largest online retailer in the U.S., with over $19 Billion in annual sales, it’s 3rd party seller marketplace has been lagging behind competitors Amazon and Walmart. Target introduced their 3rd party marketplace, Target+, around 5 years ago, yet it only has around 1,200 sellers on the platform.

A large part of the problem is that Target does not make it easy for sellers to join their marketplace. There is a long application process to join Target+, and unlike Walmart and Amazon’s 3p Marketplaces, approval to sell on Target+ is far from assured.

The reason for Target’s limiting 3P Sellers was strategic. They wanted to maintain quality control over the products and prevent market saturation (do you really need to offer 5,000 different toasters?). Additionally, Targets focus post Covid was on their retail stores, announcing a slew of store openings and remodeling in 2021.

Fast forward to 2024 and Target earnings missed its mark, prompting them to re-evaluate their online strategy. Targets announced partnership with Shopify seems like a winning strategy; allowing Target to tap into their existing customer base with expanded 3p Marketplace offerings.

What does this mean for sellers?

While selling on Target+ will still require approval, those who have a Shopify website can now apply to sell on Target, directly through Shopify, bypassing the lengthy paperwork. Target is also “throwing in a carrot”, by announcing that unique, promising brands, will be selected to sell in Target Stores. Additionally, if you are approved to sell in Target, you will have the ability to manage and sync your Target+ listings through Shopify.

At O2 Consulting we have long advocated an “all of the above approach”. As long as the proper systems and personnel are in place, there is no reason to limit the number of platforms where you products are available. Amazon’s increasingly challenging environment for sellers, makes diversifying your marketplaces more important than ever.

Which sellers stand to gain the most from the Target / Shopify Partnership?

While all brands can benefit, I don’t anticipate an expansion of Target+ posing a challenge to Amazon’s eCommerce Supremacy. I also don’t expect Target to have more seller friendly policies than Amazon. In fact, like Walmart, i would expect them to copy Amazon’s policies.

Unless the FTC forces a change in Amazon’s practices, I wouldn’t expect that to change.

Some companies may benefit more than others. Unlike Amazon and Walmart, Target’s reputation is firmly middle market. It has also established itself as a home for trendy, inexpensive fashion. I would expect brands that fit into those categories to get an extra boost from selling on Target+.

If you are looking for an edge in eCommerce Marketing and Strategy, reach out to O2 Consulting for a free, no obligation consultation.