Albertsons Cos. has partnered with Instacart to launch O Organics Market, a virtual grocery store. The service will have nearly 3,800 organic, natural and other better-for-you foods, beverages and grocery items available for delivery.
O Organics Market will initially launch in San Francisco and Washington, D.C., with plans to expand to additional cities in the future. Brands carried include Albertsons’ O Organics and Open Nature private labels, as well as national organic and natural products.
Private label brands are an important sales driver for grocery retailers — sales of O Organics alone exceed $1 billion annually. Albertsons is planning to introduce 500 or more new products to the line in 2018, including produce, dairy, meats, deli, snacks and baby items.
The market also expands Albertsons’ presence in grocery e-Commerce, which is fiercely competitive. Walmart recently added same-day delivery in New York City through Jet.com, and has plans to reach 40% of all U.S. households with its standard delivery service by the end of 2018. Kroger is investing in automated vehicles in a partnership with tech startup Nuro.
Albertsons started testing a different digital marketplace for food and wellness products in March that allowed shoppers to purchase grocery items from participating vendors. The retailer has been making rapid strides in “building digital capabilities that serve our customers,” said Narayan Iyengar, SVP of Digital Marketing and E-Commerce at Albertsons in a statement.
"Albertsons’ new virtual O Organics Market is further evidence of the growing trend of grocers using digital to reach and engage with like-minded shoppers,” said Sylvain Perrier, president and CEO of Mercatus in a statement. “While it’s not exactly the holy grail — personalization — it is a greater degree of segmentation based on lifestyle preferences and a step closer to truly catering to customer needs, pleasures and values in the fast growing natural and organic category.”