Kroger Expands Third-Party Marketplace Via Ship

Need to Know

• Kroger will offer 50,000 new items through a marketplace powered by Mirakl this fall.
• The grocery giant is poised to compete with Walmart and Amazon with its e-commerce expansion.
• New items to be sold by Kroger include toys, housewares, organic food, and specialty items.
• Kroger’s digital sales grew 92% in Q2 2020.

Analysis

As online grocers continue to expand their offerings to cater to an increasingly e-commerce-focussed customer base, U.S. grocery chain Kroger is upping the ante, announcing plans to launch a massive marketplace this fall.

The third-party seller marketplace, which will be powered by e-commerce developer Mirakl, will host an additional 50,000 items for Kroger, including toys, housewares, and specialty food items, all of which will be provided by Kroger’s existing brand partners.

“Our customers are increasingly turning to our e-commerce solutions provided at Kroger.com for their grocery and household essential needs,” Jody Kalmbach, Kroger’s group vice president of product experience, said in a statement announcing the new marketplace.

“To better serve our customers, we’re continuing to invest in technology that enables us to expand our digital services to deliver anything, anytime, anywhere. Leveraging Mirakl’s best-in-class marketplace solution, we are broadening Kroger’s ship-to-home capabilities by offering more relevant products for our customers through exciting new partnerships with reputable third-party sellers.”

The new marketplace, which will launch this fall, will help Kroger to continue its substantial digital commerce growth: the company reported a 92% spike in sales in the second quarter of 2020, as COVID-19 led consumers towards online shopping in an unprecedented way. It also positions Kroger as a competitor to online retail giants such as Amazon and Walmart. While Kroger’s scale of product offerings will obviously be substantially smaller compared to those two companies, the Mirakl integration will allow Kroger to stand out for those seeking alternative online shopping experiences.

Kroger is not the first grocery company to try third-party selling. In Canada, grocery giant Loblaw announced plans to launch an online marketplace in November 2019, powered by PFTech. Like Kroger, the marketplace allows Loblaw to sell items such as housewares from third party brand partners. Walmart also launched a marketplace, partnering with Shopify on the initiative, which has doubled in size since July 2019. Best Buy, too, has adopted the third-party strategy, branching out into housewares and other items early last year.

Third-party marketplaces have, indeed, proven an effective way for retailers to expand their customer base. Mirakl is a good pick for Kroger: the company has been selected by numerous retailers, including Best Buy and Walmart Mexico, throughout the pandemic to help safeguard against the losses accrued from bricks-and-mortar store closures. “We think the marketplace is the only thing that can save retailers,” Mirakl co-founder and CEO Adam Nussenbaum says. “If they stop being relevant online, they will progressively lose relevance among shoppers as a whole. Marketplaces are a great weapon in the fight for survival.”