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Macy’s was once called America’s department store. Today it is better known as Amazon roadkill.

Now Macy’s is fighting back. On Wednesday, the famous chain announced that it was launching an e-commerce marketplace allowing third-party sellers to list their products. Better late than never – maybe.

Future Ready

The retailer’s online shopping game was more outdated than last year’s fall fashion catalog. Prior to Wednesday, Macy’s digital footprint mirrored its physical stores and warehouses, which meant online shoppers were limited to what they could already find in their local mall. Its new platform will allow independent sellers and brands to register on Macy’s site, selling and shipping products on their own. Macy’s will still retain the products that will eventually be listed, but its catalog is likely to expand significantly to the tune of 400 new brands. It will retain a share of sales to third parties, but will not have to manage the warehouse and delivery logistics.

Although other brick-and-mortar and big-box department stores underwent a similar transformation long ago, Macy’s is betting the revamp will breathe new life into the 164-year-old department store in decline:

  • Target launched Target+, its third-party marketplace, in 2019, while Bed Bath & Beyond unveiled its own version in 2021. Walmart got into third-party play in 2009, and in 2020 launched a fulfillment service third party for competitor of Amazon’s Fulfilled by Amazon offer.
  • Macy’s first announced plans to enter the space in November last year and predicted it could generate $10 billion in sales by 2023 (the company made about $24 billion in sales in total in 2021).

Another brick in the Wal: Walmart’s fulfillment services saw a 500% increase in gross merchandise volume in 2021, its second year, the company announced in February. Then, in August, the retail giant relaxed most of its third-party seller approval requirements to pave the way for almost anything to sell on its platform, much like Amazon. Still, Walmart only has about 7% of the national e-commerce market share, compared to almost 40% held by Amazon, according to estimates by research firm eMarketer. We suspect Jeff Bezos isn’t shaking in his space boots.