How Grocery Supermarkets Can Achieve Independence from Third-Party E-Commerce Platforms

E-commerce is steadily becoming a more important channel for grocery retailers. Though grocery was slower than most other verticals to join the digital commerce revolution, the pandemic catalyzed a wave of transformation and adoption.

Today, e-commerce accounts for about 11.2% of U.S. grocery sales, and is projected to grow to 13.6% in the coming years.

But even as the digital shelf cements itself as an essential sales channel, many grocery supermarket brands retain a key weakness: they’re dependent on third parties to manage their e-commerce infrastructure and operations. Third parties in this case means companies that independently host an e-commerce storefront on behalf of the grocery retailer.

This dependence introduces complications and costs that erode ROI and reduce the retailer’s control over its e-commerce strategy. Fortunately, a powerful reservoir of data and content is available to quickly move to independence.

Why E-Commerce Independence Matters

Instead of building and managing their own e-commerce stores, many retailers in the grocery space have opted to put their online sales operations in the hands of third-party platforms, including the likes of Instacart, Freshop, Shopify, and many others.

There are legitimate business reasons to do this, but it also comes with some costly downsides:

Fees and subscriptions: These platforms typically charge not only monthly or annual subscription fees but may also charge a flat or proportionate fee for every sale. Given that grocery retail margins are already among the thinnest of any major retail segment, hovering between just one and three percent, this is a painful loss and makes it difficult to make e-commerce consistently profitable.

Data: Putting your e-commerce in the hands of someone else means you miss out on a wealth of data. Though most of these third-party platforms offer some level of analytics and tracking, they can never keep up with the behavioral tracking and insights available from an owned site.

Customer experience: Using a third-party platform means you lose some control over the user experience as they explore, shop, and check out. There’s less flexibility to tailor site layout, page content, and product representation, and it’s harder to connect the store to other engagement initiatives such as loyalty programs.

The Easy Path to Owned E-Commerce: Inspiration from a Real Grocer

There are many reasons grocery chains have turned to third party e-commerce platforms.

One large challenge is the enormous barrier to entry to stock a digital store not just with products, but with the right information about those products. Grocery product data is complex, and critically important—in addition to product names, images, brands, sizes, and quantities there’s also vital nutritional information, allergen warnings, and health and lifestyle claims expected from consumers and regulators.

Cub, a major regional grocery retailer based in Minnesota, faced this challenge and for many years relied on Instacart to power its e-commerce. They found the task of sourcing enough upfront data from its hundreds of different CPG suppliers to have a complete online store that offered a great customer experience too complex and costly—until they were offered a better solution.

“Prior to launching Cub.com we were partnered exclusively with Instacart,” said Chad Bersie, Director of eCommerce for Cub. “We wanted to control the Cub branded experience online as well as in-store and to do this we need to be able to provide a robust customer experience at the digital shelf. In order to do this we needed a partner like Syndigo to provide the robust content they curate.”

Cub tapped into Syndigo’s Marketplace, the largest and most comprehensive on-demand library of validated data and content for CPG products available anywhere. Marketplace contains essential data from thousands of leading brands available for a variety of purposes—including stocking the digital shelves of a brand new e-commerce store.

With Marketplace, Cub was able to populate its PDPs with quality product content for over 100,000 SKUs and gain full control over its own digital marketplace without dependence on a third party.

Syndigo provided a fast way to quickly gather the content we needed to launch our website and had people resources available to help us get off the ground.

Chad Bersie

Director of eCommerce, Cub Foods

See How They Did It

Instead of a long and costly process of sourcing essential data, Cub got what they needed to get started with the flip of a switch. Now they get to reap the rewards: better margins, more control over the customer experience, and direct access to all the data provided by Cub.com.