Dive Brief:

• Grocery e-commerce providers Stor.ai, based in Tel Avi, Israel, and Mercatus Technologies, based in Toronto, Canada, have merged, according to an emailed press release. Terms of the deal were not disclosed 
• Relationshop, which bought Stor.ai at the start of last year, said the acquisition will create a “connected commerce ecosystem” offering a unified, personalized and convenient first-party digital shopping experience.
• The newly combined company, which will be called Mercatus, will operate as a wholly owned subsidiary of Relationshop and be helmed by Galen Walters, founder and CEO of Relationshop.

Dive Insight:

The Stor.ai-Mercatus merger is coming at a time when independent and regional retailers are looking for ways to offer e-commerce to their customers as they compete against larger grocers — and Relationshop is looking to provide technology solutions to boost the smaller grocers. 

The announcement cited recent research from Brick Meets Click and sponsored by Mercatus that found mass retailers dominated as the primary choice for in-store or online grocery shopping — a flip from May when the same percentage (42%) of surveyed households said they used supermarkets as their main store.

Separate research from Brick Meets Click and Mercatus found that regional grocers’ same-store online sales were down 13.5% during the third quarter compared to the same period last year and only three of 25 surveyed banners reporting positive year-over-year e-commerce sales growth during the quarter. 

When Relationshop bought Stor.ai last January, Walters said that the merger would help it offer an end-to-end e-commerce platform to support retailers in taking on larger competitors like Amazon and Instacart. 

In June, Mercatus, which counts Weis Markets, Brookshire’s Grocery Company and Smart & Final among its top regional grocery partners, launched the “next generation” of Mercatus Mobile, an app and e-commerce platform for grocery retailers and shoppers, to help boost mobile conversions, improve order frequency and retain online consumers.

By combining Mercatus’ enterprise e-commerce platform with Relationshop’s expertise in unifying first-party data and powering personalized digital engagement, the merger aims to offer shopper engagement, personalization and loyalty solutions for retailers of all sizes in North America, Europe and the Middle East, per the announcement.    

The new company’s client base now reaches more than 1,800 regional grocery chain stores in the U.S. and more than 400 independent grocery stores globally, including ones in the United Kingdom, France and Canada. In Israel, the company represents 90% of grocers in the country who manage their own first-party e-commerce platforms, according to the announcement. 

Sylvain Perrier, previously president and CEO of Mercatus, is serving as the president of North America and global chief operating officer of the new subsidiary, according to the announcement. 

“This merger increases our capability to deliver unprecedented value to our clients by combining our proven technology and eCommerce expertise with the innovative shopper engagement and personalization solutions from Relationshop,” Perrier said in a statement. 

As the CEO of the new subsidiary, Walters brings five decades of grocery retail experience including advertising experience at Safeway.

“The senior leadership team at Mercatus, backed by our board, is wholeheartedly devoted to advancing the connected commerce requirements of grocery retailers,” Walters said in a statement. “Grocery retailers need flexible, automated solutions capable of addressing the competitive threat posed by national chains and the loss of control that comes from relying on third-party delivery providers.”