Commentary

Kroger Ship Adding More Than 50K Third-Party Foods, Wares

In a partnership with French ecommerce tech company Mirakl, Kroger is expanding its Kroger Ship platform this fall to include more than 50,000 products from third-party vendors. The categories include natural and organic foods, housewares, toys, international food and specialty items.

“Items will ship directly from Kroger’s network of third-party sellers directly to customers’ homes with a user-friendly experience integrated into Kroger Ship, Kroger’s ship-to-home eCommerce experience,” Maya Pattison, Mirakl’s vice president corporate marketing, writes in a blog post about the announcement.

“An extension of the Ship service into a broader ecommerce marketplace would turn up the competitive heat on big retailers like Amazon, Walmart, Target and Costco Wholesale, given Kroger’s data, analytics and media muscle and its national scale,” Russell Redman writes for Supermarket News.

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“Kroger’s aim to stretch its online retail wings is evidenced by its efforts to build its own e-commerce infrastructure. In May 2018, Kroger unveiled a partnership with U.K.-based online grocer Ocado to build 20 automated customer fulfillment centers (CFCs) in the United States over three years,” Redman adds.

Kroger, based in Cincinnati, is America's largest grocery retailer, with annual sales of more than $121.1 billion. It maintains nearly 2,800 stores in 35 states under two dozen banners.  

Mirakl, which was founded in 2012 and is based in Paris, “works with retailers such as Office Depot and Urban Outfitters in the U.S., Best Buy in Canada and Carrefour in Brazil,” Redman adds. It has offices in Paris, London, Munich and Boston.

“Online marketplaces let retailers offer inventory without having to buy it wholesale, minimizing the risk of getting stuck with unsold products needing markdowns. Third-party merchants typically pay a commission on each sale, and mature marketplaces like Amazon and EBay also sell advertising to merchants looking to stand out, providing an additional revenue source,” Jonathan Roeder points out  for Bloomberg Technology.

“Users of Kroger's online shopping venue will also enjoy membership perks like earning loyalty rewards or fuel points, which encourage repeat business. This program is not membership-based in the same sense that Amazon Prime is, nor like the one Walmart is reportedly planning to launch. But it has the potential to siphon off some current and prospective users of those services; some consumers may opt to shop with a retailer with a local presence as well as an online presence that also offers cost-effective gasoline fill-ups,” The Motley Fool’s James Brumley  observes.

Last month, Kroger “reportedly built out a 350,000-square-foot distribution center in Frederick, Md., for its grocery delivery expansion. Kroger also teamed up with automated warehouse tech company Ocado Solutions for online order fulfillment that will supply communities in Baltimore, Philadelphia and Washington, D.C., since it does not have brick-and-mortar retail locations in those areas,” Jeanette Settembre writes for FOXBusiness.

Walmart, meanwhile, “is partnering with Instacart to offer same-day delivery starting in a few U.S. markets, making it the latest major grocery chain to team up with Instacart in its fight against Amazon and Whole Foods. The partnership is currently in a pilot phase in four markets across California and in Oklahoma,” Jessica Bursztynsky writes  for CNBC Markets.

“Instacart already works with major grocery chains like Albertsons, Aldi, Costco, Kroger, and Target, as well as smaller chain stores like Wegmans and pharmacies like CVS. The platform also has an existing partnership with Walmart-owned Sam’s Club that will remain intact,” Nick Statt writes  for The Verge.

As will, presumably, its momentum.

“Walmart, Retail Dive’s 2019 Retailer of the Year, has risen above its rivals during the COVID-19 pandemic, at least so far,” Retail Dive’sDaphne Howland writes.

“Sales in the first quarter soared: Total revenue was up 8.6%, or nearly $11 billion, to reach $134.6 billion, U.S. comparable sales were up 10% and U.S. e-commerce rose a whopping 74%. The retail giant has spent the last few years gobbling up e-commerce pure-plays from Jet to Modcloth (winding down the former, selling off the latter and mum about most of the others), and has told Retail Dive that was an effort to appeal to new customers. But it has been the pandemic, rather than those attempts, that seems to have attracted consumers that may not have previously thought to shop there,” Howland adds.

Silver linings are found in strange places these days.

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