Albertsons launches an online marketplace for small CPG brands
Albertsons is looking to give small consumer packaged goods brands a boost. The company, which owns Safeway, Von’s and a variety of other banners in addition to its namesake supermarket chain, announced the launch of a digital marketplace where smaller companies can sell and ship their food and over-the-counter wellness products directly to consumers.
“If you’re a small player with a very good product or a big consumer packaged goods company with a small unit, you will struggle to get the attention of some of our larger banners,” Narayan Iyengar, senior vice president of digital marketing and e-commerce at Albertsons, told CNBC.
When an order is placed on Albertsons’ marketplace, the company processes the payment and deducts a commission before depositing the rest into the vendor’s account. The vendor then dropships the ordered items directly to the customer. Sellers manage customer service through Albertsons’ platform.
The data from transactions on the marketplace is expected to benefit both vendors and Albertsons. Suppliers can use it to gain customer insights and, if performance warrants, make the case for shelf space in the company’s various grocery chains. Albertsons will also gain insights into the shopping behavior of its customers.
The marketplace announcement comes weeks after Albertsons announced a definitive merger agreement with Rite Aid. With the addition of the drugstore chain, Albertsons, which is privately owned by a group led by Cerberus Capital Management, will operate around 4,900 locations with 4,350 pharmacies and 320 in-store clinics across 38 states when the deal is complete.
Earlier this year, the company debuted Albertsons Performance Media, a platform developed to give CPG brands a way to connect digital ad performance with sales activity.
- Digital Marketplace – Albertsons Companies
- Albertsons to launch digital marketplace for smaller brands – CNBC
- Albertsons and Rite Aid combine to create food, health and wellness giant – RetailWire
- Albertsons buys its way into the meal kit business with Plated acquisition – RetailWire
DISCUSSION QUESTIONS: What value do you see in Albertsons’ digital marketplace for vendors and the grocery retailer? What do you see as the biggest challenges the parties will face in operating and participating in the marketplace?