The grocery marketplace revolution has arrived in Brazil. Yesterday, Grupo Pão de Açucar (GPA), Latin America’s largest food retailer, announced the launch of a grocery marketplace powered by Mirakl and SAP Commerce. GPA has set its marketplace ambitions high, with plans to increase its online assortment by a remarkable 26x in 2021, adding 400,000 items over the next year to create an endless aisle of grocery and general merchandise for GPA customers.
The launch couldn’t have been timed better. The online grocery market has exploded this year, driven by a wave of COVID-19 restrictions in the spring and summer. In the first half of 2020, online grocery sales grew by 100% year-over-year, with active online users increasing by 200%, according to Adobe Analytics. Across the globe, online grocery penetration has accelerated by three, four, or even five years compared to pre-COVID 19 projections.
And while the surge is unquestionably tied to the COVID-19 pandemic, the popularity of online grocery is here to stay. Bain estimates that anywhere from 35% to 45% of the global COVID-related online grocery surge will be permanent, stating, “Strategically, it’s like someone pressing the fast-forward button on the industry by several years.”
The marketplace model is fast becoming the model for growth in online grocery. By extending the aisle with third party sellers online, grocers are able to offer more (and more relevant) products, giving customers the experience that they expect with fewer out-of-stocks and convenient ship-to-home capabilities.
Marketplaces also resolve important financial questions for grocers. By building a competitive marketplace environment where sellers compete on the best price, grocers are able to withstand price competition. And crucially in an industry with challenging margins, the model is profitable, giving grocers a strategy to enhance customer experience with no inventory risk and fewer logistics to worry about.
GPA isn’t the only market leader recognizing the key role that the marketplace model will play in online grocery. In August, the United States’ largest grocery chain The Kroger Co., announced plans to launch a Mirakl-powered Marketplace as part of their Kroger Ship eCommerce experience. Their marketplace will complement Kroger’s in-store, delivery, and pickup offerings by offering 50,000 additional products in multiple categories, including natural and organic, houseware, home, toys, international food, and specialty items.
“Kroger has a very clear strategy about having a seamless experience for our customers so they can get what they want, how they want it,” Jody Kalmbach, Group Vice President of Product Experience at The Kroger Co., said. “To do that, we knew we needed to create one digital experience that has all of the assortment choices that are available to our customer, and they can decide how they want to access it.”
In France, Carrefour launched an online grocery marketplace of its own this summer, with ambitions to onboard 100+ sellers and 100,000+ products by the end of 2020. “With this food & beverage marketplace, which is the first to provide such an ambitious offer, our goal is to become the leading eCommerce site for our clients. This marks a new stage in the transformation of our omnichannel solutions,” explained Elodie Perthuisot, Executive Director of eCommerce and Marketing for Carrefour France.
The model is already proving its value, not just for Carrefour but for the entire grocery ecosystem. This month, as non-essential businesses closed due to new COVID-19 restrictions, the grocer invited affected businesses to sell on the marketplace at no cost, giving them much-needed access to a streamlined digital sales channel and Carrefour’s broad customer base.
Each of these leading grocers may serve different markets, but they’re joined by their recognition of the essential value of the marketplace model. It offers much more than an extended aisle online – it’s a flexible, scalable, profitable foundation for growth. And while GPA, The Kroger Co., and Carrefour France are among the first to recognize the value of the marketplace model, they certainly won’t be the last. As online grocery sales take off, grocers can’t afford to wait.