Art and craft supply retailer, Michaels, has announced on its website that it will be launching a marketplace for third-party craft supply sellers. The site will be called the Michaels Marketplace. The launch date has not yet been made public.
CEO Ashley Buchanan told the Wall Street Journal in February that a marketplace was in the works. “There’s an opportunity to bring a platform of people together that have similar interests and then also monetize that interest on top of it, but be this creative inspiration outlet and hub that connects all of it between community classes and content and basic componentry to make it,” he said. “That’s kind of the platform we’re creating that we’ll probably roll out the back half of this year.” Michaels did not immediately respond to our request for comment.
It’s possible that the new marketplace is being built with the technology stack created by Zibbet. Back in 2017, Zibbet was acquired by A.C. Moore, a Michaels competitor. The company used Zibbet’s technology to build the short-lived A.C. Moore Marketplace where makers of handmade goods could list their items for sale without incurring any fees. Just a few months after the marketplace launched, however, A.C. Moore exited the craft retail market, closing its 135 locations as well as its online presence. Michaels took over leases for approximately 40 store locations, the lease on an East Coast distribution facility, and purchased some of A.C. Moore’s intellectual property.
Three months ago Zibbet founder, Jonathan Peacock, stated on LinkedIn that Zibbet had been acquired by “one of the largest companies in our industry.” The Zibbet website announcement about the acquisition states, “The future of Zibbet is VERY bright, and we’re confident it is being left in great hands that can take it as far as we dreamed it could go.” Peacock declined our request for comment.
Michaels has struggled to build a robust ecommerce presence, although it saw an increase in online sales during the pandemic when ecommerce as a whole surged. In the third quarter of 2020, ecommerce revenue accounted for about 10% of all of the company’s sales, up from the same quarter in 2019, but it’s facing stiff competition with ecommerce giants Amazon and Wal-Mart, as well as with Etsy where craft supplies are one of the top six categories of products for sale and generated $1.2 million in 2020, up 102% from the prior year. Michaels seems to be looking to benefit more from this velocity.
After shutting down the wholesale craft supply division, Darice, in June of 2020, the company launched Michaels Pro in the third quarter of 2020 to appeal to the professional crafter by offering bulk discounts. In an earnings report, Buchanan shared that average basket sales for Pro customers were twice that of the average customer, a promising sign that working with craft businesses could increase top-line revenue. A third-party marketplace for craft supply sellers could position the company’s ecommerce site as a destination for a wider assortment of supplies than is available in stores.
Michaels might have good timing with this announcement. Etsy’s recent rollout of the Star Seller program, which awards a special badge to sellers with 95% five-star reviews, 24-hour response times, and on-time shipping, has evoked anxiety from many sellers who feel micromanaged and held to an impossible standard. The fees on Etsy can add up, too. Etsy charges a .20 listing fee, 5% transaction fee and 5% fee on shipping charges. According to the Michaels site, the Michaels Marketplace will be free for sellers to use. (Oddly, in the application to sign up for more information, many other marketplaces where sellers might have a presence are listed including eBay and Amazon, but not Etsy.)
The Michaels Marketplace landing page specifies that the site will be for high-volume sellers of components, tools, and craft materials. How “high volume” is being defined has not yet been spelled out. The Marketplace is also looking to work with third-party solution providers including payment processors, order management, pricing, shipping and fulfillment, item setup, and more. It’s possible that the company is still building out these systems, and is seeking vendor proposals.
As of now, there’s no launch date for the Michaels Marketplace, but those interested in learning more can sign up for email notifications.