Catch of the Day, one of Australia’s largest online retailers, has launched a new site completely dedicated to selling non-perishable groceries as the online space branches out into new territory.
The move comes just months after the company received an $80 million investment from an equity fund backed by James Packer, who has also put money into online department store Deals Direct, which has its own grocery division as well.
“Everyone goes to the supermarket every week. They might not need a new pair of shoes or a laptop, but they need to keep buying groceries,” says Catch of the Day co-founder Gabby Leibovich.
“We’ve been selling items on Catch of the Day for awhile now as a monthly thinking, and we think we’ve spotted a great niche that people have really taken to.”
Leibovich is adamant the site – which will market to the group’s existing mailing list of 1.5 million – will feature top-level, everyday brands such as Coca Cola, Heinz and Duracell, promising discounts of between 30% and 80%. The business will be able to sustain such high discounts by sourcing unwanted products from major sellers.
“It’s been the most successful day of the month in terms of registrations, parcels going out and the number of items being sold. It’s the same with Scoopon – we saw that niche, went for it and built a site.”
“We think we’re going to shake things up in the industry a bit, although we’re not going to take too much business out of the big guys.”
Leibovich says the business will only sell non-perishable goods and keep the massive discounts spread out, only selling one-off deals twice a week.
“In terms of dollar value it’s a drop in the ocean and it’s not going to change their model to accommodate us. But there is an opportunity here, and the great thing about the internet is being able to offer a great opportunity at a lower price than anything else out there.”
However, Leibovich says there is plenty of room in the online space for more grocery offers considering the major two supermarkets don’t have a comprehensive offering.
“In Australia only about 1% of groceries are being sold online, while in Britain and the United States it’s around 5%. There is huge potential for growth here.”
“The space is owned by two major players here and they aren’t interested in discounting this much. They want you to come inside and walk away with a whole heap of different products.”
Part of the $80 million has been dedicated to a new warehouse in Melbourne’s suburbs.
SmartCompany understands Catch of the Day is trialling a number of new product niches that may be launched over the next 12 months.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
