Loblaw Launches New Online Marketplace

In a bid to compete with Amazon and Walmart, Loblaw will use third-party vendors to populate its growing e-commerce marketplace.

Thanks for subscribing!

Need to Know

  • Loblaw has announced they will begin rolling out an online marketplace featuring a wide variety of products from new vendors the grocery giant has never before worked with.
  • The new initiative is powered by PFTech, a company Loblaw acquired in early 2019.
  • Despite 2019 Q3’s year-over-year revenue growth of 2.3% (amounting to $336 million), Loblaw still needs to innovate in order to continue competing with large U.S. companies such as Amazon and Walmart.
  • Loblaw is part of the Weston Group, along with Shoppers Drug Mart, No Frills, and others. Together, they are the largest retailer in Canada.

Analysis

Loblaw’s bid to expand its online marketplace comes at a time when the largest retailers in the world are striving to offer one-stop shopping experiences. By adding new vendors in toys, baby items, kitchen, pets, and other specialty areas, Loblaw can fulfill consumer needs without greatly increasing overhead. Loblaw chief customer officer Garry Senecal says the new marketplace is “simplifying the searching and shopping experience.”

The new products are offered via PC Express, Loblaw’s proprietary e-commerce and click-and-collect service. These new products can be ordered and picked up in-store, or also be delivered to the doorsteps of customers. The biggest advantage Loblaw holds over Amazon and Walmart is that customers can take advantage of Loblaw’s PC points loyalty program when they purchase new vendor items. 

As more items become available on Lobalw’s marketplace, it may incentivize consumers to choose Loblaws for other purchases. Many grocery chains in Canada are competing right now to win a share of the fast-growing grocery delivery business, and if Loblaw can drive consumers online to purchase new goods from new vendors, they’re more likely to stick around and order grocery items as well. Some of the newly included vendors available in the marketplace include Umbra and Lennox Furniture Inc.

The more products available to Loblaw’s consumers, the longer they stick around in the ecosystem. A robust rewards system will keep shoppers loyal while a diverse selection of goods and quick delivery will keep them happy. Third-party marketplaces are proven winners, as more than half of Amazon’s current sales come from these types of vendors. 

Merchants are also looking to make their products more widely available, which is good news for Loblaw and its customers—according to a recent study, 36% of Amazon sellers are considering expanding to Walmart’s online marketplace this year, up from 29% expressing interest last year. As more large retailers open up their vendor ecosystem, increases like these will only continue. 

Thanks for subscribing!

Thanks for subscribing!