Why the Grocery Sector is Poised to Join the Platform Revolution

October 17, 2018

The global grocery market is on the cusp of transformation. It’s predicted to double in value from  $150 billion in 2017 to $334 billion by 2022. And whilst it remains the largest retail category in the US, it’s also the least penetrated.

Online grocery sales comprise just 2.9% of total global grocery retail sales in 2017 - and while Forrester estimate 57% of global consumers shopped online in 2017, only 12% bought groceries online. There is a huge opportunity to capture market share. Both online and offline retailers are locked in a battle to capture the loyalty of these high frequency shoppers and establish themselves as the go-to grocery destination.

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In fact most large grocery retailers are moving away from selling only a small number of core categories and instead are embracing high-margin categories that complement their offering such as fashion and electronics. Making it easier for shoppers to find what they need in a single destination.

Amidst this climate of change, it’s timely news this week that Albertsons is the latest retailer to embrace a marketplace approach to better service their customers.

“Our digital team is focused on removing the limits on how people shop for food. Today, people are trying to squeeze the best out of each day in their busy lives. While some customers want an extended selection or unique specialty products, there are other customers who simply prefer to have bulky items like pet food shipped straight to their front doors,” explained Jon Fahrner, head of marketplace for Albertsons.

Albertsons currently operate stores across 35 states in North America under twenty well-known banners, including Albertsons, Safeway, Vons, Jewel-Osco, Shaw’s, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen and Carrs, as well as meal kit company Plated.

In a Press Release they share the story behind the strategy, which will help Albertsons keep atop product trends and hot new items. Data gleaned from the marketplace can be used to help identify changing consumer interests, shopping needs by region and emerging food and wellness trends.

Their best-in-class marketplace will deliver an easy digital onboarding experience for third-party sellers and a new platform giving fast access to the grocer's large customer base.

Benefits it provides include:

  • Product visibility and national exposure on a large digital platform for invited and carefully selected marketplace vendors
  • Proprietary data that will help Albertsons evaluate what products to stock in stores while also giving vendors insights into what regions to consider for building distribution

It’s clear Albertsons are re-shaping their growth strategy focused on better serving their customers at a time when the grocery industry is under the spotlight.

We believe the rise of the platform model will be a key topic at Groceryshop (a three day event from the creators of Shoptalk) in Las Vegas at the end of the month. The event aims to ‘address shared challenges and opportunities relating to the evolution of how consumers shop for products ranging from food and beverage to health, beauty, personal care, household and pet supplies.’ In fact Albertsons will be sharing their inspiring journey with the audience in three unique speaking slots:

Monday 29th October, 5pm, Track 2

Karl Varsanyi, GVP of Digital Product Management, Albertsons Companies


Tuesday 30th October, 9:15am, Track 2

Vivek Kalpande, GVP Loyalty, Personalization & Analytics, Albertsons Companies


Tuesday 30th October, 2:15pm, Keynote

General Session Keynote

Narayan Iyengar, SVP, Digital & eCommerce, Albertsons Companies


And we’re excited to be learning and sharing best practice (at booth #429) with the brands and retailers re-defining the grocery shopping experience.

… the message is loud and clear. Grocery retailers need to adapt to the demands of the modern shopper and examine the most effective strategy to better service the market. A marketplace platform is the only model that offers true scale and flexibility, it’s time to embrace the revolution.

Meet us at the event

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