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Albertsons to offer online marketplace for small brands

Grocer Albertsons Cos. Inc. will expand the range of items it sells online later this year, allowing food makers to ship some new products directly to customers who order them.

The marketplace will be up and running in mid-2018, the company said March 20, and will be able to serve both new brands from major manufacturers as well as products from emerging players. Albertsons, meanwhile, will be able to collect data on sales of individual products — information the company can use to make decisions about which products will move to shelves at its physical stores, Senior Vice President of Digital Marketing and e-commerce Narayan Iyengar told S&P Global Market Intelligence in an interview at Shoptalk 2018 in Las Vegas.

"There is this long tail of items and [stock keeping units] that is available out there, but we cannot carry them on our shelves," he said, adding that the marketplace will allow customers to order items with second-day shipping.

The data that Albertsons collects through the platform will be location-focused, too. While part of the goal is to see how popular new products are with customers, Iyengar said, the company will also be able to see specific zip codes where products performed well.

That information, in turn, could be used to make stocking decisions at individual supermarkets, he said.

Albertsons' move is the latest aimed at bolstering the company's digital offerings. In January, the Boise, Idaho-based retailer launched Albertsons Performance Media, a tool that provides food and consumer goods manufacturers with information on how digital ads that customers see online affect their buying habits in a physical store. The program makes connections between what customers see online and what they buy using loyalty programs at each of Albertsons' regional banners, which include Safeway and Acme.

Other grocers also have embarked on digital transformation programs in recent months. In October 2017, Kroger Co. launched changes under its "Restock Kroger" program, including one initiative aimed at changing which products individual stores stock based on local purchase data.

In February, Albertsons bid to buy pharmacy chain Rite Aid Corp. If the proposed deal receives approval from federal regulators, it will also make Albertsons a publicly traded company.