In 2019, METRO launched the first B2B online marketplace in Germany that caters specifically to the HoReCa industry. An interview with Philipp Blome, CEO METRO MARKETS.
After just 4 weeks, more than 65,000 articles were available online already. METRO’s online marketplace is a significant contribution to the comprehensive approach of Wholesale 360. With its expanded range of products and services, METRO is gradually growing into a holistic provider of goods and solutions for independent restaurateurs.
Everything restaurateurs need, on 1 platform. From drinking straws to dining sets. METRO Markets makes it possible.
More about the strategic approach Wholesale 360 in the Annual Report 2018/19
The online-marketplace business model is currently the fastest-growing of its kind: operators benefit from fast scalability, while customers enjoy the largest possible product ranges and attractive prices thanks to the direct competition between operators. In the summer of 2018, METRO founded its fully owned subsidiary METRO MARKETS to develop and run the digital B2B platform. MPULSE spoke to Philipp Blome, CEO of METRO MARKETS, about the new business model.
What does the establishment of a B2B online marketplace mean for METRO?
The B2B marketplace is a component of our comprehensive effort to support our customers across all areas of their business. Marketplaces are different to conventional online shops. The people running a marketplace are not just retailers, they are platform operators and, as such, technology businesses.
Why did you choose the marketplace model?
Digitalisation has opened up whole new opportunities for the retail sector. There is no limit to the items you can display online. The traditional e-commerce business, where one retailer showcases their own products in their online shop, is almost obsolete again. At best, it is the standard approach. Instead, marketplaces are becoming more popular: platforms where multiple retailers offer a range of goods. That is why we launched the METRO Marketplace. It is an additional sales channel where METRO offers non-food products from its own product range alongside several hundred partners with more than half a million products (editor's note: as of July 2021).
What is the impact of that concept?
We open our platform to third parties, meaning that we tolerate and encourage competition. In our view, that is the only way of making a platform competitive: by offering a wealth of articles in a transparent manner that allows customers to draw comparisons. And at the same time, METRO is just a retailer like any of the others.
Is it not risky for METRO to open its platform to third parties? What makes you think that your customers will continue to order through the METRO Marketplace after their first order instead of switching to the corresponding retailer itself?
We want our marketplace to offer the simplest possible shopping experience. Returning customers can find and order the products they need effortlessly. When it comes to dealing with our partners, this means that we do not build any features for our own exclusive use: everyone can use everything. The METRO Marketplace is a platform that allows our retail partners to trade with each other.
Digitalisationhas opened up whole new opportunities for the retail sector. There is no limitto the items you can display online.
Allowing customers to buy products through a channel that is run by METRO might give them negative associations with the brand as a result of inadequate third-party products or retailers.
Of course, all platform operators and those thinking of launching a marketplace platform occasionally worry about the potential consequences for their own brand. In my experience, which includes my time with the real.de online marketplace, the consequences tend to be overwhelmingly positive. I think it is worth a try. Of course, we have plenty of control mechanisms in place to ensure that our partners comply with our rules.
Isn’t that easier said than done?
Well, we could spend enormous amounts of time and energy on such preliminary discussions. Of course, some things will go wrong, that is a given with any new launch. But there is no need to be afraid, if and when something goes wrong, we will deal with it. When we worked on real.de, we noticed that the launch of the brand caused a seismic shift in brand perception. People considered it to be a lot more modern than it was perceived before.
At what target group is the new METRO Marketplace aimed?
The platform and its offers are tailored towards the needs of the HoReCa industry: hotels, restaurants and catering services. This makes it a B2B product. One important factor to keep in mind: you do not need a METRO card to shop. Any restaurateur can order goods from our wide range of products through the platform.
So it is not just about moving customers who used to shop at METRO wholesale stores to the online shop.
Not at all. We are not moving customers from the physical stores to the internet, we are offering our existing customers a much larger product range than before. That increases our share of wallet. On top of that, we are addressing new customers. Queries submitted through search engines, for instance, are a highly relevant source of customer journeys. We believe we can optimise this route. We plan to boost the METRO Marketplace to a good, highly visible position among the results of search queries about catering products, for example.
At the same time, METRO is proposing to give the third-party providers who use the platform a slice of the pie.
What matters to us is giving our customers access to the largest possible product range and facilitating positive interactions with the METRO brand. This is about more than sales. It is about offering the best service to our main target group: restaurateurs and business owners. We want to become the main digital port of call for the HoReCa industry. That is our primary vision.
