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KONINKLIJKE AHOLD : Apps, online ordering, delivery services gather steam in grocery

07/23/2014 | 11:18am US/Eastern


These days, the hottest new thing food retailers offer customers may not be a product.

That's because shoppers are demonstrating interest in services ranging from mobile apps to online ordering and delivery.

Middlesex Township-based Giant Food Stores LLC, for instance, partnered with Peapod on its Giant Pick Up service in four stores in November 2013. Giant is a division of Ahold USA, which is a subsidiary of Netherlandsbased grocer Royal Ahold; Peapod is a wholly owned subsidiary of Royal Ahold.

Giant Pick Up is now in about a dozen locations and, Giant spokesman Chris Brand says, "We're hoping that we'll have something to announce soon beyond what we're already offering in Central PA."

In the Pick Up model, customers order online or through the Peapod mobile app, then schedule a time to pick up their groceries at a participating location. Orders are assembled at what Brand calls a wareroom, which is stocked with the most popular products, then driven to the pickup locations in Peapod trucks.

Peapod calls itself America's leading Internet grocer and is perhaps best known for a service it does not yet offer in Central Pennsylvania: Home delivery.

Started in 1989, Peapod has delivered more than 26 million orders and, according to spokeswoman Peg Merzbacher, had a double-digit growth rate over the past few years. In the past 18 months, she says, Peapod has opened wareroom facilities in four states, including Pennsylvania.

"In an age where our customers are busier than ever, we know we have to constantly find ways to make grocery shopping easier," Merzbacher says. "We serve busy professionals, parents, the elderly, businesses, college students, people in urban areas without cars - really anyone who has trouble getting to the store or finding time to shop."

The startup

In April, Benjamin Anderson and Ray Dixon launched Groceries on the Go, a delivery service offered in partnership with Stauffers of Kissel Hill and Kegels Produce. Now serving parts of Lancaster, York and Dauphin counties, they take orders online or by phone.

The concept is relatively unfamiliar to area residents, Anderson says, but people are looking for value and convenience and are accustomed to making non-grocery purchases online. Upon hearing how the system works, he says, people have been receptive, and the six-employee company has been seeing steady growth. In its first two months, the company's website had more than 3,000 visitors.

The apps

Back at Giant, Brand mentions another offering that hasn't hit Central Pennsylvania yet: Scan It mobile, an app that performs the same function of the existing physical version that lets

Giant also got some buzz when it was added to Ibotta, a free mobile app that allows user to earn cash by purchasing featured products at select retailers. Another recent Ibotta addition of local note is Sunbury, Northumberland Countybased Weis Markets Inc.

The burgeoning variety of offerings is part of a deliberate strategy, Brand says, adding that Giant's rewards program works throughout the whole system.

"What we're trying to do is provide a shopwhen-you-want environment, shop how you want, where you want," Brand says. "We look at it as an opportunity for touchpoints for customers in all demographics, all ages. Wherever you are at in your life, there's a place for Giant to fit in.

Derek Gaskins and Gabe Olives, chief customer officer and director of fuels, respectively, at Manchester Township-based Rutter's Farm Stores, say the mobile movement is evident across the retail world, from groceries to convenience stores to restaurants.

"The smartphone era that we live in is what's driving it," says Gaskins. "There's a desire to have things customized and personalized and tailored, and the mobile phone has delivered that better than anything before it."

"We were the first convenience retailer to offer a mobile app, and that was in 2009," Olives says.

Consumer demand and Rutter's success notwithstanding, Gaskins says, the journey to a business model that fully integrates mobile apps will be a long one for the retail industry. But, he says, it's not really optional. Amazon and other merchants without brick-and-mortar locations have proven their viability and "are forcing retailers down that path."


(c) 2014 Journal Publications Inc.

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