Tesco Launches New Online Marketplace - Retail Media News

Tesco has launched an online marketplace, significantly expanding its product range by integrating approximately 9,000 third-party products across various categories, including garden, DIY, homeware, toys, and pet care. These products are available alongside Tesco's groceries on Tesco.com and the Tesco app, making Tesco a comprehensive one-stop shop for customers. The marketplace features around 17 vetted sellers, including well-known brands like Tefal, Silentnight, Tommee Tippee, and Charles Bentley.

Meeting Customer Demand

The decision to launch the marketplace was driven by customer demand for products not previously available at Tesco. Peter Filcek, Tesco’s marketplace director, explained that the move was prompted by frequent customer searches for items Tesco didn’t carry, such as suitcases. "We were looking at customer searches on our websites and found things that we just don’t carry in Tesco [stores] or online," Filcek told The Grocer. This insight led Tesco to expand its range to meet customer needs without mobilizing its retail supply chain, allowing the company to respond swiftly to customer preferences.

How the Marketplace Works

Customers can now shop for third-party products alongside their groceries on Tesco’s platforms. These items are fulfilled directly by the suppliers, not Tesco. Shoppers pay for third-party items separately, with their own delivery fees. However, Anytime Delivery Saver customers or orders over £50 from the same seller qualify for free standard delivery. Additionally, shoppers can earn Clubcard points on all purchases, with items clearly labeled as coming from third-party sellers.

The marketplace features vetted sellers to ensure they meet Tesco’s robust requirements and standards. Sellers are monitored continuously based on delivery speed, returns, and delivery success rates, with plans to soon incorporate customer ratings and reviews.

Strategic Growth and Expansion

Filcek emphasized the potential for rapid growth, aiming to increase the range and supplier base quickly but sustainably. "We want to go big enough that we are a destination... But not so big that [shoppers] end up tripping over irrelevant stuff and it becomes a problem," he said. The goal is to ensure quality and compliance, avoiding any rush that could compromise customer satisfaction.

Learning from the Past

This isn't Tesco’s first attempt at a marketplace model. In 2012, Tesco Direct included third-party sellers but ceased operations in 2018 due to unprofitability. Filcek highlighted that Tesco Direct was a separate website fulfilled by Tesco, whereas the new marketplace is integrated into Tesco's main online shopping experience and fulfilled by the sellers. This integration aims to provide a seamless shopping experience and a more scalable business model.

Competing in the Marketplace Arena

Other retailers like Walmart, Kroger, Auchan, Carrefour, Ahold Delhaize, and Boots have also launched marketplace models. When asked whether Tesco.com is now competing with Amazon, Filcek pointed out the differences. "What we’re doing at Tesco is really focusing on what we believe Tesco shoppers want... Our launch is nowhere near Amazon’s scale. We’re really trying to make sure we hit those marks on performance, on quality, on trust."

-

Tesco's new online marketplace represents a strategic move to broaden its product range and meet customer demands more effectively. By integrating third-party products seamlessly with its grocery offerings, Tesco aims to provide a convenient, trustworthy, and comprehensive shopping experience. As the marketplace grows, Tesco remains committed to maintaining high standards of quality and customer satisfaction, setting itself apart in the competitive retail landscape.