Peapod Goes After Delivery Customers With Organic Exclusive

Online grocer Peapod is throwing another twist into the online grocery delivery business by letting customers order boxes of fresh organic produce, Drug Store News reported.

The service, which is only available in the Chicago area, offers home delivery of produce that includes beans, beets, broccoli, kale, Swiss chard, collard greens and heirloom tomatoes that come from a Wisconsin organic farm that would normally require a membership for customers to get its vegetables. Peapod customers can also order produce boxes for pickup in locations in the Chicago suburbs.

Peapod is pitching the service as supporting "local farmers and local purveyors of all kinds," but that's a bit of a stretch—the produce source, Harvest Moon Farms, has an office in Chicago, but the farm itself is more than 200 miles away.

That doesn't make the the idea any less clever. At a time when mainline retailers are trying to figure out how to make same-day delivery work, Peapod is figuring out that simply moving food from existing stores to customers' homes probably isn't enough to pull in more customers. Offering something that the stores don't have—and that would cost more for customers to get for themselves separately—gives the delivery service something much less generic than simple delivery.

Peapod isn't alone in looking for ways to break out of that simple-delivery model. Last week Dutch grocer Albert Heijn (which, like Peapod, is an Ahold subsidiary) said it will let customers pick up their online grocery orders at a major airport, presumably on their way home from vacation.

But non-grocery delivery services seem to be stuck on the simple model, and that's a large potential stumbling block. Even in the U.K., where same-day grocery delivery has firmly taken hold, the economics are tough—retailers need a lot of customer orders per trip to make delivery profitable. In the U.S., the problem is made worse by not having enough delivery customers, period. Until more retailers give customers a reason to take notice, their most likely delivery vehicle will remain the family car.

For more:

- See this Drug Store News story

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