Successful Growth of an eFood Marketplace – 3 Questions for Bassel Soukar, Head of Marketplace REWE Digital GmbH
In 2014, the REWE Group – one of Europe’s largest grocery businesses – made a major investment into eCommerce by founding REWE digital – a wholly owned subsidiary that was to consolidate all of its strategic online activities. The company sought expertise in the field and found commercetools, a commerce platform that had a library of APIs and was built using microservices. commercetools had a strong technical team that was continually developing new commerce services. REWE digital quickly realized the advantages offered by commercetools.
REWE digital and commercetools have now been working together successfully for five years. This is a good time to take a look at their mutual success and the lessons they have learned. We spoke with the marketing, eCommerce and technology departments at REWE digital. The first of our guests is Bassel Soukar, Head of Marketplace at REWE digital.
REWE is a trailblazer when it comes to marketplaces for food retail; and the REWE Paketservice (package/parcel service) has already been online for two years. What has been your experience?
And where are you heading from here?
In our online marketplace, we offer exclusive products from our partners in the food, kitchen and homeware sectors. Today we offer about 150,000 products from almost 65 partners online. We started with just five partners at the beginning of 2018. Our product range is being consistently expanded thematically and seasonally, for example by offering traditional costumes before and during the Oktoberfest season.
Where does the REWE Lieferservice (delivery service) end and the REWE Paketservice service begin?
Do they overlap or compete?
Turnover is no longer the sole indicator of our success. The food industry is in the midst of a profound and widespread transformation, and the sustainability of our future business model is becoming increasingly important.
REWE maintains an excellent network of supermarkets, along with the delivery via our Lieferservice (delivery service) for fresh food in 75 cities and their surrounding areas, not to mention the Partner Marketplace for food, kitchen and household products. In addition to its own private label brands, REWE ships products and special offers from partners and others using our Paketservice. These channels do not compete with each other, but rather connect related service areas. The Paketservice, available nationwide, extends our product range. The aim is to dovetail the channels in the best possible way, for example, by connecting the online marketplace with the customer’s local REWE store. We are continuously working on concepts for making supermarket customers aware of online products.
How do you select partners and what are your biggest challenges?
Our standards are high when it comes to selecting partners. Not only do we provide close support to our partners, also product quality is our top priority. Based on a criteria list, we determine whether potential partners are eCommerce newbies or active on other platforms. We try to select as few partners as possible for each product range segment, whom we then approach personally.
Our biggest challenge is the technical onboarding. Smaller retailers are often not technically capable of transmitting their product data in a well-structured format. It becomes much easier when they have appropriate inventory management tools in place. Of course, we would prefer to use an API connection to retrieve product information, but currently many partners deliver them by uploading a CSV file. It is not only the quality of the partners that matters, but also their technical competence in handling modern tools. To overcome this challenge, we provide support through our own technical onboarding team.
While we turn in our next article of this series the attention to REWE digital’s marketplace and the joint online expertise with commercetools, we put this collaboration in the third part of our series into a technology perspective.
More about REWE digital paving the way for the digitalisation of the REWE Group can be found on their website.