Kroger, the largest US grocery store operator, said Monday that it is expanding its two-year Kroger Ship program by integrating it with a new outside vendor market. The company specified when it will launch the platform, allowing the grocer to expand its product selection by 50,000 items.
The move seeks to take advantage of Kroger’s 92% increase in digital sales in the first fiscal quarter and make the company, a relatively late arrival to the online grocery wars, more competitive with Amazon, Target, Costco and Walmart, all of which also saw its online grocery sales explode during the coronavirus pandemic.
The massive selections of general merchandise from those chains give them a huge advantage over Kroger’s online assortment, a weak point the market aims to mitigate. According to a research note from Deutsche Bank, Kroger’s online momentum had accelerated further from the first weeks of the current quarter.
The partnership with Mirakl will allow Kroger to offer “more relevant products” by expanding its e-commerce operations to include third-party sellers of non-grocery products, Jody Kalmbach, vice president of product experience for the Kroger group, said in a statement. Initially, the market will offer more than 50,000 additional items in multiple categories, including natural and organic foods, international, specialty items, household items and toys, the statement said. Kroger says it plans to launch the market this fall.
Kroger says the market is a continuation of its ongoing investments in e-commerce technology under its Restock Kroger strategic plan, which began two and a half years ago. It also comes at a time when the COVID-19 crisis is driving huge growth in e-commerce grocery sales.
Kroger did not reveal the exact locations, but says he plans to reveal them soon. The newly proposed facility joins six similar robotic fulfillment centers now planned or under construction.
Harris Diamand, vice president of customer experience at 1WorldSync, an online product content provider for Kroger, says the marketplace “will be able to fill some of Kroger’s gaps” by making it easier for shoppers to quickly find the foods they want, while also collecting other daily essentials like household items and children’s toys.
“Kroger’s new partnership with Mirakl will give it a boost to remain competitive in the market during the pandemic time, Right now, it’s less of a battle between brick-and-mortar chains like Meijer or Publix, and more focused on catching up with Amazon and Walmart, as their broad product offering makes it easier for consumers to get everything in one go. destination, especially as customers continue to avoid physical storefronts. “
Online marketplaces allow retailers to offer inventory without having to buy it in bulk, minimizing the risk of getting stuck with unsold products that need markdowns. Third-party merchants typically pay a commission on each sale, and mature marketplaces such as Amazon and eBay also sell advertising to merchants looking to stand out, providing an additional source of income to the market.
Additional products will include things like household items and toys, an attempt to bring it a little closer to its rivals Walmart and Amazon in particular, whose product assortments comprise tens of millions of items. Another benefit of a third-party marketplace, which the grocer is working with the technology company Mirakl to build, is that Kroger can offer customers a wider variety of products, many of them non-food, without having to buy inventory, which reduces changes. If you have to carry unsold merchandise, you may have to discount.
