Online shopping king Amazon.com (NASDAQ:AMZN) and the fast-growing e-commerce arm of Walmart (NYSE:WMT) will soon face competition from a surprising source. Grocery chain Kroger (NYSE:KR), which currently sells a relatively modest number of consumer goods online that can be shipped to customers' homes, is diving deeper into the third-party marketplace business.
On Tuesday, Kroger announced its Kroger Ship platform will add an additional 50,000 items to its selection by this fall. Third-party vendors will populate the shopping platform and handle fulfillment in the same manner that Amazon and Walmart's third-party sellers do.
Kroger's expanded assortment could prove at least somewhat disruptive to Amazon's dominance and Walmart's growing share of the United States' online shopping market. In addition to certain grocery items and consumables, Kroger Ship will introduce goods including toys, housewares, and some Kroger exclusives.
Users of Kroger's online shopping venue will also enjoy membership perks like earning loyalty rewards or fuel points, which encourage repeat business. This program is not membership-based in the same sense that Amazon Prime is, nor like the one Walmart is reportedly planning to launch. But it has the potential to siphon off some current and prospective users of those services; some consumers may opt to shop with a retailer with a local presence as well as an online presence that also offers cost-effective gasoline fill-ups.
Less obvious to consumers will be the power of the data that Kroger is able to collect about consumers using their shopping history and shipping address. Amazon is arguably one of the digital world's most effective platforms in terms of leveraging information. Rivals like Walmart and now Kroger, however, are catching up.