Woolworths to extend its e-commerce offering with a 'marketplace'

Woolworths is shaping to launch a ‘marketplace’ on its main website that will be underpinned by platform-as-a-service technology from Melbourne startup Marketplacer.

The retailer said late Thursday that its venture capital arm W23 had invested a “multi-million dollar” sum into the startup, and would also use the technology itself.

Marketplacer’s technology enables retailers to augment their existing e-commerce presence, for example, by allowing dropshipping.

Dropshipping is a fulfilment model whereby Woolworths would not hold stock of a product but would rely on a third-party to ship the product directly to a customer.

Woolworths said in a statement that it intends to launch such a marketplace offering called ‘Everyday Market’ on Woolworths.com.au “to improve the depth and breadth of its everyday needs range for customers in the near future.”

“As more of our customers start their shopping journey digitally and buy groceries online, we know their expectations will only continue to rise,” director of new business Faye Ilhan said.

“Together with Marketplacer, we’re building a marketplace for Woolworths.com.au, which will help extend our range of everyday needs products for online customers.

“As well as offering more choice to the millions of customers who visit our website each week, our marketplace will provide existing and new suppliers with fresh opportunities to partner with us to grow their business.

“This will be a highly curated marketplace focused on range extension in our core everyday needs categories and we look forward to exploring opportunities with supply partners.”

The retailer said it would initially pilot “an extended everyday needs range with BIG W later this year” on its main Woolworths website.

“This will help Woolworths gauge customer demand for an expanded range, while allowing it to test delivery logistics with another retailer in the group,” it said.

Marketplacer, which is based in South Melbourne, was unsurprisingly pleased at signing on Woolworths both as a customer and an investor.

“This deeply collaborative partnership will see our team and technology drive a monumental digital transformation moment for the brand, while also supporting our own ability to expand, simplifying growth for businesses the world over,” co-founder and executive chairman James Wyatt said.

W23 was established by Woolworths Group in 2019. Its investments to date include Sherpa, Eucalyptus, Spoon Guru and Longtail UX.