​​Superdrug sees a healthy future with launch of digital marketplace

UK and Ireland high street health and beauty products retailer Superdrug has set up a new e-marketplace for potentially hundreds of new vendor partners.

Fully integrated with its main website, Superdrug.com, the move is allowing the firm to start offering an extended range that includes many examples of new homegrown, female-founded, sustainable, and inclusive brands.

At launch, this included cruelty-free ethical skincare and a women’s razor brand.

These products were previously unavailable either in its 780 physical stores or online, confirms its Marketing and eCommerce Director, Matt Walburn.

The idea is to promote diversity by supporting entrepreneurs and small businesses in the health and beauty market - and a lot more besides.

That’s because the inclusion of a third party marketplace is being driven by several commercial drivers, he added.

This includes the ability to extend the range of what Superdrug buyers can get in a risk-free way, while broadening and strengthening the overall offering.

Doing so will enable the brand to compete better with other online purchasing options, such as Amazon - but critically its main competitor, Boots. 

He said:

Customers are looking to access information and content but also the products outside of the physical world. We always want to move with the market and with the customer to offer them propositions that allow them to shop with us in the ways they enjoy. 

We believe we already do that very well, but a marketplace was exciting for us because it meant we could move into new categories. There, you don’t want to necessarily buy stock, put it in the warehouse and take up valuable space and then find perhaps customers don't respond like you expect them to. So, a marketplace is a really great way of testing out which products are going to resonate with Superdrug customers.

And while Amazon has done a good job, it’s a very generic online environment - customers understand it but is it really adding value to an area like health and beauty which needs a lot of information and inspiration for customers? That's what we're able to provide through our marketplace, so we're hoping to claw back some performance versus Amazon because of doing this.

Last but not least, we now have a marketplace up and running well ahead of Boots.

The new marketplace - which went live in November 2022 - has already started to meet all these criteria, he said.

For example, prior to go-live Superdrug.com had 16,000 SKUs: this has now been expanded by 7000 more products via the marketplace, with 13,000 orders already made off it.

A key factor in the success of the new service is its successful integration with the company’s main ecommerce platform, SAP.

Tight connection with the firm’s IT back end was always seen as critical to the vision of the marketplace from the start, Walburn confirmed.

An equally important consideration in the decision to launch the marketplace was a strong business case for the company’s owners, Hong Kong-based health and beauty giant A.S. Watson.

Walburn said:

Globally, across the organization, we’re very thorough as to what projects we invest in.

I wouldn't say we are risk-averse, but we're certainly sensible. It took considerable investment from an IT perspective to get signed off, but we just felt it offered so much in the long term to move into this direction.

‘As the SKU count and the product count go up’

In mid-2022, Walburn and his team got the green light from Hong Kong to go ahead.

To make important Black Friday and Christmas trading periods, they then needed a rapid development option IT-wise.

Walburn felt he found the right partner to deploy the project in the shape of enterprise marketplace software provider Mirakl’s Marketplace solution.

This was implemented with aid from both the vendor and KPS, an SAP Gold ecommerce partner headquartered in London. 

In terms of next steps, Walburn plans to use third party help on the marketplace to double Superdrug.com’s product availability to 32,000 before the end of the year.

That will make shopping much more compelling on the platform, he believes:

As a result of getting the investment from our owners we had to commit to what the sales are going to be. But as the SKU count and the product count go up, we know sales will follow the same path.

‘Access to the marketplace via the Superdrug app’

Part of that growth, he said, will be fueled by more onboarding of non-UK partners on the marketplace.

This should be easier, he said, given the functionality that his new marketplace can offer potential partners:

Sellers expect a certain level of interface in terms of what they can do. The good news is this platform provides them the ability to manage their range, get the information they want, upload their images easily, and so on. It's really important that we can go to a seller and say, Do you want to sell on Superdrug? and that we have the right technical setup they're used to working with.

Yes, they sell through Amazon and eBay and do good business there, but they know it's never good to have all your eggs in one basket. Now we can offer an alternative, and we’ve been really, really pleased with the reception--it hasn't been a problem getting sellers online.

Other plans, he said, include extending access to the marketplace to the Superdrug app beyond just the mobile and desktop version of the site—but all this work will continue to align with the company’s core approach to business.

He said:

We’re a mainstay of the UK High Street with 60 years track record of trying to offer the best in beauty brands, everyday personal care, and essential health products in an enticing store environment and online with great service.

We don't believe customers should compromise on service, our prices are always keen, and we have a very strong value proposition at our heart. 

An e-marketplace is the next step in our digital transformation program for doing that.