Electronics retail giant Best Buy is poised to challenge Amazon’s dominance in online shopping with the announcement of a new
third-party marketplace launching in 2025. The initiative aims to expand Best Buy’s digital presence and leverage its established reputation in consumer electronics.
The move comes as online shopping continues to evolve, with e-commerce showing significant growth potential despite its massive expansion during the pandemic years. While Amazon currently commands more than one-third of all online purchases in the United States and has seen its e-commerce business grow by approximately $109 billion since 2020, certain retail sectors still present opportunities for competition.
Electronics purchasing, in particular, remains split between online and brick-and-mortar channels, with estimates suggesting only 30-40% of electronics are bought online. This hybrid shopping pattern persists because many consumers prefer to physically test and evaluate expensive electronics like televisions and headphones before making a purchase.
Best Buy CEO Corie Barry revealed the marketplace strategy during a recent earnings call, explaining that the company plans to build upon its successful Canadian third-party marketplace model. “We believe that as the trusted leader in consumer electronics we have an opportunity to leverage our positioning and assets to build a differentiated digital marketplace platform,” Barry stated,
highlighting plans to offer customers expanded product assortments and new categories.
The marketplace will focus on electronics-related items and
accessories, such as phone cases and wellness products, building upon Best Buy’s core expertise in consumer electronics. This represents the company’s second attempt at establishing a marketplace, following an unsuccessful venture that operated from 2011 to 2016 before shuttering as Amazon’s market presence grew.
Industry analysts see potential in Best Buy’s renewed marketplace strategy, particularly given the retailer’s unique customer base. Megan Potts, founder of Triforce Digital Partners, noted that Best Buy attracts affluent millennial shoppers, representing a valuable demographic that surpasses the typical customer base of competitors like Target, Walmart, and even Amazon.
The timing of Best Buy’s marketplace launch coincides with ongoing shifts in consumer shopping behavior. While the pandemic accelerated online shopping adoption, certain retail segments remain resistant to complete digital transformation. Grocery shopping, for instance, continues to face challenges in the online space due to issues like delivery costs, variable customer satisfaction, and the practical limitations of handling perishable goods.
Large retailers have adapted to these evolving consumer preferences in different ways. Walmart, for example, has successfully leveraged its extensive physical presence – with over 90% of Americans living within 10 miles of a store – to create efficient online fulfillment operations through its retail locations.
Best Buy’s marketplace initiative represents a strategic effort to maintain competitiveness in an increasingly digital retail landscape while capitalizing on its established brand strength in electronics retail. By offering sellers and advertisers a platform to reach qualified customers and build their brands, Best Buy aims to create a distinctive online marketplace that complements its physical retail operations.
The success of this venture could potentially reshape the competitive dynamics of online electronics retail, providing consumers with an alternative to Amazon while allowing Best Buy to expand its digital footprint in a market segment where it already enjoys significant consumer trust and expertise.