Author: Matthew Stern
Source: Retail Wire
U.K. grocer Sainsbury’s has observed Amazon.com’s success with a third-party marketplace and plans to launch one of its own aimed at grocery shoppers.
Sainsbury’s intends to use its web presence to host products and offer services from third-party partners, according to MarketWatch. The marketplace, which is still in the planning stages, would offer options like home delivery of products or pickup through the store network and would recommend potential add-on sales to customers purchasing from third parties. The announcement comes as Sainsbury’s, the second biggest grocer in the U.K., faces both enhanced brick-and-mortar competition and increased interest in online shopping from customers.
Other big-name retailers have begun exploring the online marketplace model to profit off of third-party sellers, as well.
In February, Target announced the launch of an online marketplace called Target+, which offers a curated selection of products from third-party brands solicited specifically to participate, according to CNBC.
Walmart, for its part, has had an online third-party seller marketplace competitive with Amazon since 2009, even before the brick-and-mortar chain began its big push into tech with a spate of e-commerce acquisitions.
There has also been a recent stateside attempt at a grocery-centric third-party marketplace, launched by regional grocer Albertsons in October 2018 as part of its digital enhancement strategy. The online marketplace made 40,000 specialty items from third parties available to online customers at launch.
The effort may have had an impact, as Albertsons reported a 52 percent increase in e-commerce in Q4 of 2018, according to Supermarket News.
A third-party marketplace, however, is not a risk-free proposition. Problems with product quality and bad experiences with fulfillment can reflect poorly on the marketplace — possibly more so than the seller. Third-party marketplaces can also lead to cannibalization of sales on competing products that a marketplace-hosting retailer has available in-house.
In fact, Walmart recently began slowing the expansion of its marketplace. This move came despite posting strong quarterly gains last year due in part to the addition of a large number of SKUs from marketplace sellers.