Dive Brief:
- Retail software firm Mi9 announced it will acquire MyWebGrocer (MWG), a leading digital solutions company for the grocery and consumer packaged goods industry. Terms of the deal were not disclosed.
- Mi9 said in the release that MWG will add e-commerce, order management and click-and-collect capabilities to its lineup of software solutions across various retail channels, including sporting goods and apparel.
- "Our technology and media businesses complement the Mi9 platform and will operate more efficiently with the scale and business process expertise that Mi9 has put in place," Barry Clogan, MWG’s president of retail solutions, said in a statement. "This is a real win-win for our customers and employees."
Dive Insight:
As grocery players continue their push — however reluctantly — into digital, technology companies are finding an opportunity to help grocers with the transition. Most notably, Instacart has built a $7.6 billion business out of bringing retailers’ product assortments online and delivering orders to customers.
To keep pace with the evolving industry, vendors will partner and acquire their way toward better positioning. In some cases, digital grocery players have acquired capabilities like artificial intelligence that sharpens their offering. In others, retail technology providers have bought grocery-focused service providers that give them access to the fast-changing business. Last year, Instacart acquired Unata, a deal that deepened the former's technology and expansion into retail services outside of online order fulfillment
Retailers have also made a few high-profile acquisitions of technology firms and will likely continue to do so. Target acquired Shipt last year for $550 million, while Walmart acquired Parcel and Indian e-grocer Flipkart. Although not positioned as a technology play, Kroger’s acquisition of Home Chef and Albertsons’ Plated pickup have enhanced customer data operations at both companies.
MyWebGrocer has specialized in grocery e-commerce for nearly two decades. Yet it has encountered into its share of hurdles as it has made its way through various owners and investors. Last year, the company faced a lawsuit from former employees over “phantom stock” it had issued, with one former database architect winning a $1.5 million judgment that MyWebGrocer has since appealed. The company laid off 18 employees as part of a restructuring plan last December.
In an interview with Food Dive earlier this year, Barry Clogan, MyWebGrocer’s head of retail solutions and the former head of e-commerce at British grocer Tesco, said the company sees an opportunity to work with small and regional grocers who have previously resisted e-commerce. But they are quickly coming around to the need following Amazon’s purchase of Whole Foods.
"Grocers that are trying to fight this are trying to hold back a tide," he said. "This is how customers are shopping. This is the way they’re behaving."
