Woolworths is expanding its online marketplace Australia-wide this week, as the grocery giant seeks to expand its online presence.
Everyday Market, which launched a pilot program on the NSW Central Coast in July, allows the retailer to hugely expand its product range and earn revenue from other sellers without adding additional stock to its bricks-and-mortar stores.
It comes as Woolworths posts record e-commerce sales and shifts its business model to focus on its online platforms.
The retailer’s e-commerce sales rose 58% to $5.6 billion in 2021, with online food and grocery sales skyrocketing 75% to $3.5 billion.
Everyday Market, a virtual marketplace that enables third party sellers such as homewares, health and beauty, pet and clothing suppliers to sell through the Woolworths.com.au site, is part of that strategy.
By offering customers a wider range of products — and without Woolworths having to physically hold the stock, it is able to clip the ticket on transactions by third parties as well as attract even more customers to Woolworths’ website and apps.
Lance Eerhard, general manager for Everyday Market, told The Australian Financial Review that its “ultimate ambition” was to double the entire Woolworths range by the end of this year.
“The team is turning on new products from existing partners every day and new partners will start to come on later this week,” Eerhard said.
Brad Banducci, Woolworth’s chief executive, has said he wants to generate new revenue streams by building a retail ecosystem and opening up the retailer’s supply chain, data analytics, media and rewards programs to third parties to accelerate growth.
The retailer this week signed up new sellers to join its first partner, discount department store chain Big W, which offers a curated range of products including small appliances, cookware, kitchenware and books on the marketplace.
Woolworths clips the ticket on every transaction and facilitates payment processing, while third party sellers handle logistics and last-mile deliveries.
The rollout of Everyday Market follows a boom in online marketplaces during the pandemic, which has in turn driven more companies to set up marketplaces to attract new customers.
In 2020, online marketplaces represented 62% of all online sales and grew at twice the rate of overall e-commerce.
In June Woolworths rival Coles announced it was accelerating its digital transformation plans and would spend $2.5 billion over the next two years on improving its digital offering.
The supermarket said it would seek to improve its online shopping, as well as data and automation across its warehouses, in an effort to streamline its logistics.
And Amazon is currently building an automated warehouse in Western Sydney, set to be the largest in the Southern hemisphere, to support its growth in Australia.
The online marketplace is supported by Australian e-commerce start-up Marketplacer, which also provides platforms for companies including Myer, Metcash, Bike Exchange and SurfStitch.
Independent research has suggested the retailer could double its market share to more than $500 billion by expanding into areas outside food and everyday needs and leveraging its systems and expertise.
To support the expansion, Woolworths will launch a national print, television and digital television advertising program for Everyday Market and promote new products and sellers through its existing customer database.