Dive Brief:
- Albertsons has launched its digital marketplace that offers over 40,000 specialty products to consumers across the country, according to a company release. Offerings include specialty spices and condiments, coffee, health and beauty products as well as other non-food products. By the end of the year, Albertsons plans to have 100,000 products up on the site.
- The brands are what differentiate Marketplace from other online retailers, the company says. It features artisan seller Spicemode, which sells simmer sauces and spice blends, all of which are hand-made and all-natural. The products were inspired by homemade meals the founder's mother prepared when she was young. The brand can be found at many retailers but has achieved national scale with Albertsons' Digital Marketplace.
- Suppliers ship their products directly to consumers, while Albertsons oversees the operation and ensures a high level of customer service. Shipping practices vary by seller, but typically follow standard rates and take between two and five days to reach shoppers.
Dive Insight:
Albertsons' Marketplace is curated to give consumers the opportunity to shop the brands they know and love like Annie’s, Newman’s Own and Justin’s as well as the opportunity to discover new brands like Cardini’s, Pereg, Bouchee’s, Nature’s Path, and Mamma Chia. Along with free shipping and specially designed shopping options based on ingredients, the site features supplier stories aimed at promoting discovery while bringing consumers closer to these brands.
The website promotes the experience by featuring marketplace picks and catchily-titled categories like “banana rama” which features all products with banana, and “buzz buzz buzz” which has all products that include caffeine.
The site allows the traditional supermarket to reach consumers that may not have a store nearby, those who often search for new products at Whole Foods or smaller retailers and those who crave the convenience of delivery through Amazon or Thrive Market. But perhaps most importantly, the site will provide insights in fast-growing specialty categories that Albertsons can use in its stores. This could also be an opportunity for small suppliers, which could earn shelf space if their product proves popular with online shoppers.
The marketplace gives Albertsons the opportunity to go against Amazon and other online sellers by providing an “endless aisle” of products while also offering the same small-scale brands commonly associated with Whole Foods — but that are on increasingly on the outs with the natural and organic grocer. Kroger, which has its an online portal where local suppliers can apply to company buyers, also recently launched an online marketplace, Kroger Ship.
But will the site be able to compete with other top players? Pricing products competitively could be a challenge. A three pack of 16-ounce jars of HomePlate peanut butter — prominently featured on Albertsons' Marketplace — goes for $19.95, but is available for just $14.95 on Amazon. It will also be important for Albertsons to promote the new site effectively through in-store and digital advertising — and not just to loyal customers.
On the plus side, online demand seems poised to lift all ships. Although online grocery makes up a small slice of total sales right now, it’s expected to $100 billion by 2025, according to the Food Marketing Institute and Nielsen.
Albertson’s goal isn’t to beat out Amazon, Narayan Iyengar, senior vice president of digital and e-commerce at Albertsons told attendees at Shoptalk earlier this year, when the new marketplace was first announced. The grocer is trying to add to its strengths and convenience options, just like most grocers, with unique food offerings, in-store meal kits and various other promotions.
