How Albertsons Aims to Conquer Digital Grocery

The past few years have primed grocers to explore new opportunities that can better meet changing shopper habits. Albertsons is planning to draw on customers’ newfound comfort with ordering online, combined with their interest in unique flavors and options, with a new online marketplace.

Albertsons shared a preview of its plans and strategy during a session at the recent 2022 Retail Innovation Conference & Expo.

“The one area Amazon hasn’t conquered, and that nobody has conquered online, is grocery,” said Jasmin Krdzalic, Albertsons’ Senior Director of Marketplaces. “What’s bought more often than grocery? Nothing.

“Food is omnipresent in our lives, and yet not all the food that I care about is available in one place. [So how does Albertsons become] a one-stop shop for all our customers’ food needs and become a food authority? A marketplace may be the way to get there.”

This isn’t Albertsons’ first foray into marketplaces. The company launched Albertsons Marketplace in 2018 with a focus on natural, organic, ethnic, and alternative products from third-party manufacturers. The effort didn’t succeed and was quietly shuttered years later, but the grocer is ready to try again with more expertise and in an environment where customers are more comfortable with buying food online.

The renewed effort will retain the old marketplace’s emphasis on trending and underserved categories like ethnic foods and specialty products, according to Krdzalic. Albertsons will continuously validate this selection with a combination of market research and its own internal data that can identify any gaps in the inventory.

This curated approach will suffuse the entire operation, not just in terms of products sold but in how those items are presented to shoppers.

However, the challenge of venturing into an uncharted space is that it’s hard to quickly determine what works and what doesn’t. Krdzalic plans to overcome this issue by focusing on getting the right product assortment and page layout to keep shoppers interested — even if they aren’t immediately buying.

“The metrics that I’m going to be paying close attention to include the amount of time spent right in the marketplace in search and discovery,” said Krdzalic. “I know that’s not a converting metric and it doesn’t directly drive revenue, but we’re in year zero, when the most important thing is that a consumer is actually interested in what you have.

“If engagement is low, then every other metrics will suffer. If it’s happening, but they’re not converting, it’s a lot easier path to fix that than if I have some conversion but people are in and out of the site really fast.”

The secret to generating engagement is by recreating the in-store experience in the marketplace. That’s easier said than done, according to Krdzalic. A cheese aisle in an Albertsons is clearly a cheese aisle full of both private label and third-party cheeses, but how do you replicate that online? Krdzalic believes the aforementioned curation of both the product selection and the site experience will bridge that gap.

“I think that the value of a marketplace is hidden in the curation,” said Krdzalic. “Throwing it all together in a hodgepodge may get a little bit of success and some traffic, but you need to offer curation and an opportunity for consumers to easily go through the journey of building a basket. That’s where I think we can succeed.”