In the age of e-commerce behemoths like Amazon, Instacart and UberEATS, who often seems to get left behind is your smaller, independent, usually family-owned, neighborhood grocery store. The one that has been around for years, knows the community, and has fresh produce -- but not the resources to increase its visibility in an expensive and crowded online ordering and advertising space.
Now, Mercato, a New York-based company, is bringing these neighborhood grocery stores and their product inventories online -- and the company has recently expanded into Chicago.
Targeting stores with between 1,000 to 10,000 products, Mercato hopes to simplify the merchant onboarding process as much as possible. It has created a centralized product catalogue with about 120,000 items which merchants simply have to browse and select as part of their offerings while setting up their profiles. Merchants are free to customize each offering as much as they wish to, and have full control over pricing options, stock levels, and lead time.
Mercato also offers a delivery exchange option, integrating with grocery stores’ existing delivery options or offering delivery via Uber and Postmates. The store can specify and customize delivery times on a daily basis, depending on in-store orders which can change day-to-day.
The platform is selective in deciding which stores to onboard. Mercato ensures that only the highest quality stores are online, using a Yelp integration API as well as their own internal rating and review system wherein customers are sent a survey to fill out immediately after an order is delivered. New stores are identified via customer requests and referrals.
There is no cost for merchants to get onboard or for customers to browse -- Mercato charges a 9% commission on every transaction, along with a 3% credit card transaction fee. “This is significantly less than UberEATS or Grubhub which can sometimes charge up to 35%,” said Mercato CEO Bobby Brannigan in an interview.
The interface is intuitive on the customer side, too. Buyers simply visit the website, enter their zip code, see which stores in their neighborhood are delivering that day, decide if the time slot and cost works for them, and order on the platform. Customers are also able to live-track the delivery as it happens.
Launched in the fall of 2015 in Brooklyn, and in Chicago at the beginning of this year, Mercato has already onboarded 150 stores to the platform, including 10 in Chicago (additionally, a few out of the 150 even offer national shipping). Their goal is to add a hundred stores in the Chicago area within the next six months.
Brannigan grew up working at his family run butcher shop, which has been in existence in Brooklyn for over 40 years. Coming from a family of entrepreneurs, it was natural for him to also pursue an independent path.
“In college I founded a textbook rental company and grew it to about $100 million in sales over 13 years, eventually selling it to SimpleTuition, Inc. in 2012. I was deciding what to do next, and after discussions with my father, I realized the opportunity to help independent stores showcase their inventory online,” Brannigan said.
He got to work building the technology (along with some former colleagues from his previous venture), and onboarded his father’s store as the first one to join the platform.
Brannigan saw big opportunity to expand in Chicago, with the large number of neighborhood stores, especially catering to different ethnicities. Local favorites such as Dirk’s Fish & Seafood, Wixter Market, Hyde Park Produce, Paulina Market and La Fournette are all already available for same-day delivery, and Mercato is partnering with Harvestime foods and South Asian staple Patel Brothers very soon. Having raised $2 million to date, they are looking for their Series A round in the next few months, with plans to expand in more cities.
