Dive Brief:

• A new partnership between e-commerce platform Mercato and New York City allows select independent grocers and local vendors in neighborhoods picked by the mayor’s racial inclusion and equity taskforce to offer online shopping and local delivery, according to a press release.
• Shoppers will be able shop from several stores within each neighborhood included under the program, consolidating what would have been multiple store visits and reducing in-person contact, the announcement stated. 
• The partnership provides independent grocers a new sales channel while also expanding food accessibility, especially among vulnerable communities, Bobby Brannigan, CEO and founder of Mercato, said in the announcement. The city is waiving the set-up fee, usually $1,500, for independent grocers to speed up how quickly they will start offering online ordering and local delivery through the program. 

Dive Insight:

New York City’s pilot program with Mercato underscores a broader effort to ramp up independent grocers’ digital presence.

Online ordering not only would boost sales for the grocers, but also reach more shoppers, especially ones leery about shopping in-person, and help combat surging food insecurity. 

After an initial boom early in the pandemic, online ordering seems to have stabilized as shoppers settle into their “new normal.” Shoppable recipe platform Chicory found in a survey that roughly 60% of respondents used online ordering for groceries in July — a drop from 63% in April, but higher than 53% in January.

This year, several e-commerce platforms have teamed up with food delivery services and intelligence companies to reach independent grocers. E-commerce platform Rosie and DoorDash teamed up on grocery delivery beginning in March. Halla, an artificial intelligence company, linked up with e-commerce platform Local Express on new features aimed at encouraging online shoppers to buy more items, while C&S Wholesale Grocers partnered with Instacart on e-commerce services, including same-day delivery.

Mercato is enlarging its presence as independent grocers look to compete with mass retailers on things like delivery speed and e-commerce experience. Last fall, Mercato launched its delivery membership program with two different plans for shoppers. In June, the company said its new analytics tools will drive sales, boasting an online sales growth guarantee for its merchants. 

Online shopping and on-demand delivery are some of the ways grocers are looking to reach vulnerable shoppers, which many independent grocers serve. 

New York City officials said the Mercato partnership will increase access to fresh and affordable food. “Moreover, these options will help expand choice, including to culturally appropriate foods, so that New Yorkers can choose which foods they want to eat and feed their families,” Anusha Venkataraman, co-chair of the taskforce subcommittee on food access and insecurity and NYC Chief Service Officer, said in the press release.