Target-Shopify partnership: How small businesses can benefit

Target (TGT) is partnering with e-commerce platform Shopify (SHOP) to onboard Shopify sellers into the Target+ marketplace for third-party products. Yahoo Finance's Madison Mills joins Brad Smith on Wealth! to discuss how this "invite-only" model will benefit small businesses from this strategy.

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This post was written by Luke Carberry Mogan.

Transcription de la vidéo

Turning now to some news on the retail front.

Target and Shopify forming a partnership target will host some of Shopify's merchants and sell their products on Target plus the company's third party digital marketplace here with more on what this means for small businesses.

We've got Yahoo finances catalysts co host Madison Mills, Maddie.

Hey Brad, thanks so much for having me on this.

So I I think you explained it really well to me as we were talking before your show started and you were getting set up and helping me with this story.

This is potentially a play for some of the Instagram snap sellers to be able to have access to Target Plus and some specific sellers will also have access to in store selling as well.

So that is a big boon for potentially some of those really high value sellers to be able to get in store, foot traffic for themselves in terms of merchant places.

But this is clearly kind of a play against e commerce, big wigs in the room.

Of course, I'm referencing an Amazon and I pulled up some data on this in the period ending March 30th, 60% of items sold on Amazon came from independent businesses.

That's over half.

Now, how does Amazon benefit from this?

Will they get a commission off of each sale from these merchants?

They also get a revenue because a lot of the time the sellers will pay a premium for advertising on the platform to be able to get in front of more shoppers.

So that is also a potential revenue stream for target.

Now target doubled the number of sellers on their site in the past year.

This is going to an invite only model.

So when we're talking about the impact of small businesses, this isn't just a kind of pay for play.

Everybody who wants to can get on here.

It's going to be very specific.

That is because Target is hoping to kind of build trust with customers, not just allow anyone in there, they still have a very specific product offering that they want to maintain in the eyes of their customers.

But I thought it was really interesting that some of these small businesses will be able to be in stores.

I wonder how that will impact the in store for Target and how they're going to potentially be able to use that to diversify and perhaps get in even new customers who are interested in seeing some of these smaller, more unique businesses cater to very specific shopping needs for customers moving forward here.

Brad.

Yeah, absolutely.

And I mean, just the way that the companies kind of came together and really announced this.

I thought it was interesting in that now for Shopify, which as we were discussing has really leaned on some of the creation of the digital mall if you will through meta platforms, subsidiaries IE and Instagram or even a Snapchat in these core partnerships that would allow more shop and allow more merchants who had already created profiles and touch points with so many of the active users on social media sites.

Now having a core partner in one of the biggest brick and mortar retailers in the US here.

I think that's a significant move for them.

We'll see where it continues to move shares, but no doubt for small business owners out there and some small business retailers uh this a potential opportunity for them to get in front of even more eyeballs out there.

Yeah, it's a great point, Brad and really quickly that reminded me to pull up globally.

Shoppers will spend over $280 billion this year on stores managed with Shopify software.

That is a huge, huge number here.

That's actually more than double target's projected sales for the year.

So reminder that Shopify a big guy in the room here.