Dive Brief:

• Albertsons is currently overhauling the design and functionality of its e-commerce platform, according to The Wall Street Journal. The company is also moving its e-commerce systems to cloud platforms like Microsoft’s Azure.
• To help with the changes, Albertsons has hired technology leads with experience outside the grocery industry — including with struggling retail chains. These individuals, according to Narayan Iyengar, the company’s senior vice president of digital marketing and e-commerce, bring “experience in industries that have undergone dramatic transformation due to digital — people who have been through battles and learned from it.” 
• About half of Albertsons’ customers in its 35-state footprint can order groceries online. The company plans to expand ordering to the other half soon, though it provided no time table.

Dive Insight:

Not to be outdone by Amazon, Walmart or Kroger, Albertsons is building out its own e-commerce platform, further solidifying its status as a major player in the grocery industry.

The company —which has gone from 200 stores and $4 billion in sales to more than 2,300 stores and $60 billion in annual sales in the past five years through key acquisitions — is working on expanding service and streamlining the design of its website and mobile app to be “cleaner and simpler” for shoppers, Albertsons CIO and executive vice president Anuj Dhanda told The Journal. 

Key to Albertsons’ ambitions here is top-level tech talent from outside the grocery industry. This includes Group Vice President of Digital Product Management Karl Varsanyi, a former vice president with Macy’s who worked on the company’s omnichannel operations; and Group Vice President of IT Digital and Marketing/Merchandising Ramiya Iyer, formerly head of e-commerce at Levi’s. Even though the companies they came from have struggled, they had robust e-commerce platforms. Albertsons’ head of digital marketing and e-commerce, Narayan Iyengar, who previously worked for Disney, hopes the team and others can bring advanced thinking to a grocery industry that has lagged in the online space.

This approach holds great promise for a retailer known primarily for its efficiency and aggressive expansion. However, it also highlights the difficulties large companies can have spreading e-commerce capabilities across their banners. As The Journal points out, Vons shoppers in Northern California can order groceries online, but Albertsons customers in North Dakota can’t. With industry consolidation accelerating, grocers must tackle increased investments, branding and other complexities involved in offering a unified online shopping experience.

E-commerce's inherent challenges have led many chains to outsource to Instacart, Shipt and Amazon Prime Now. But Albertsons, like Kroger and Walmart, has the resources to scale its own online ordering and delivery service, and sees the benefits to owning the customer experience and branding.

Following a failed bid for Whole Foods and a reportedly failed bid for Sprouts Farmers Market, the company is hungry for profitable growth, and e-commerce could very well deliver in the latter half of this year and beyond.