Dive Brief:
- Peapod Digital Labs, the e-commerce arm of Ahold Delhaize USA, has announced a pilot with Deliv to provide same-day grocery delivery for Giant Food Stores customers in Willow Grove, Penn., according to a company press release.
- With Deliv’s last-mile logistics capabilities, Peapod will be able to offer one-hour delivery windows to customers in the test market and order turnaround of four hours or longer. Peapod plans to introduce same-day delivery service in the coming months to other markets served by both Giant Food Stores and other Ahold Delhaize banners.
- “Through Peapod Digital Labs’ relationship with Deliv, we will assist the brands as they continue to conquer the last mile, and rapidly scale same day delivery to the benefit of millions of local brand shoppers by 2020," said JJ Fleeman, president of Peapod Digital Labs and chief eCommerce officer of Ahold Delhaize USA, in a statement. "Deliv is an example of many partners we will work with to deliver this benefit to customers.”
Dive Insight:
The addition of a same-day delivery pilot project with Deliv shows just how serious Ahold Delhaize is about adding more e-commerce options for its retail brands, and how important its Peapod arm is in making that happen. Less than a week ago, the banner announced that it was opening Giant Direct, Powered by Peapod — a 38,000 square foot e-commerce pickup and fulfillment center in Pennsylvania that will bring grocery delivery and click and collect to more customers.
While any grocery delivery is valuable to customers in today's market, the pressure is on for companies to speed up the process and fulfill orders as quickly as possible. A recent analysis from CommonSense Robotics found that same-day grocery delivery grew by 500% in 2018, and another survey from Capgemini Research Institute said 55% of respondents reported that two-hour delivery would increase their brand loyalty. If one grocery store can’t offer same-day delivery, another one will – and many grocers are trying to stay competitive with larger retailers that are rapidly expanding delivery capabilities including Kroger, Target and Walmart.
Ahold Delhaize is well aware of its competition and has made its ambitions very clear to the public, with plans to double online sales by 2021. Through Peapod, Ahold Delhaize plans to streamline e-commerce fulfillment and grocery delivery operations for each of its U.S. banners.
Deliv has an established presence in 35 markets across the U.S., providing last-mile delivery for groceries and several other products. Its logistics are already in place, and it has established partnerships with other grocery providers such as Walmart and major retailers including Kohl’s and Best Buy. The company also recently secured a $40 million round of funding, signifying it has the financial backing to scale.
It is a tall task for grocers to deploy same-day grocery delivery to customers on a large scale, which is why many grocers have linked up with end-to-end providers Instacart and Shipt. As demand grows, however, retailers will likely want more control over data and the customer experience. A hybrid model that combines retailer resources with third-party capabilities is a model that Walmart, for one, has tapped into. As noted in the press release, Peapod plans to add additional partners for last-mile fulfillment as grocery delivery expands.
To dub the project a victory, Peapod will need to see quick response and positive reaction to its new same-day delivery service. Based on its immediate plans to expand in the months ahead, the company must have data, or at least the anecdotal customer demand, that says this is going to be a successful endeavor.
