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[13 comments]

Will Peapod Drive Sales With Its Mobile Grocery Store?

July 8, 2013

Peapod, a division of Ahold USA, is rolling out a promotional campaign featuring digital billboards on the sides of delivery trucks where consumers can shop for groceries using their smartphones. The tour will reach ballparks, concert venues, local rec centers, and coffee shops in five major cities along the East Coast, as well as Chicago.

The tour follows up on the internet grocer's debut of such scan-and-shop billboards last fall at more than 100 commuter rail stations across its 24 U.S. markets. Much like the train stations, users scan a QR code to download the PeapodMobile app to their smartphones and then scan other QR codes to shop for a select number of items. Participating brands include Barilla, Coca-Cola, Kimberly-Clark, Procter & Gamble and Reckitt Benckiser.

If the order is not complete, users can continue making selections online. Home deliveries can be scheduled for the next day or whenever specified.

Besides the truck, the tour also features a Chevy Spark "cart-car" outfitted with elevated handlebars at the rear that resemble a grocery shopping cart.

"When we piloted the virtual stores last fall, we found that the advertising stopped people — it engaged them, and we saw mobile app downloads as a result," Peapod COO Mike Brennan said in a statement. "This go-round, we're exploring new, hyper-local platforms to communicate our convenience message of 'Shop Anywhere, Anytime with Peapod.'"

The trucks will travel to Chicago, Philadelphia, Baltimore, Washington, Boston and New York, including reaching many professional baseball parks. Other planned stops include Café Benvenuto in midtown Manhattan, the Boston Pops 4th of July Fireworks Spectacular and Bon Jovi, One Direction and Justin Timberlake concerts in Chicago. Popular tourist attractions and well-traveled thoroughfares will also be included.

The campaign also features coffee-cup sleeves with scannable product at 7-Elevens and other local delis. And "human billboards" will hand out 10,000 t-shirts via radio partnerships across participating cities.

FreshDirect, which competes with Peapod in the New York Metro market, plays up its dedication to freshness and convenience in its campaigns. In launching into its second market, Philadelphia, last October, an eight-page direct mailer, entitled, "Turn grocery shopping into a ZEN-like experience," railed against the long lines and poor quality of items at local supermarkets, according to Direct Marketing News. Similar to its launch in New York City, it also offered a blowout trial offer: $50 off each of two initial orders of $125 or more.

FINANCIALS:     [OTCMKTS:AHONY]

Discussion Questions:

How effective do you think Peapod's tour will be in encouraging trial of online grocery service? What other approaches may be required to entice consumers to try online grocery?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How effective do you think Peapod's tour will be in encouraging trial of its online grocery service?

Comments:

Oh ... I don't know ... I love to order groceries when I go to a Tigers game, but maybe that's just me.

Look, it will get them great publicity and that publicity may encourage trial of online grocery shopping, but of course, the real trick is to get trial AND repeat and that takes more than a publicity stunt.

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Ryan Mathews, Founder, ceo, Black Monk Consulting

The scan-to-buy approach has its advantages, but those are best used where shoppers are also a captive audience, such as on a commute or in a doctor's office. That's why the approach was successful in the railway station in Asia and the Metro North stations in Connecticut.

Using the sides of trucks is neat, but ultimately won't get the traction of large groups of people held as time captives.

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Liz Crawford, VP, Strategy & Insights, Match Drive

In my opinion, online grocery isn't working, except in vertical populated areas. We have Peapod in rural Wisconsin, however, their pricing is simply not competitive with Walmart, Target, Aldi, Trader Joe's and Woodmans. In fact, pricing is excessively high. As seen in the picture in this article, they promote expensive name-brand items.

The reality is, most of us do not have to experience long lines and poor quality at supermarkets, unless perhaps you are shopping at an Ahold store. If they want to entice customers to try online grocery, price match the major competitors, promote private label, drop any kind of delivery charge, and guarantee a same day delivery.

David Livingston, Principal, DJL Research

Peapod seems to have planned its tour very well, reaching not only busy city-dwelling commuters, but also younger active people who'd rather be out-and-about versus at the grocery store. This tour also fits the Ahold corporate strategy to increase their presence and ability to serve shoppers anytime, anywhere.

The secret to success will ultimately come down to continued use of the app version, a one-time trial and a downloaded app that never gets any regular use.

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Anne Howe, Senior Vice President, Shopper Solutions, part of Acosta Mosaic Group

I can't see where this is going to get anything more than hype and curiousity seekers. Like Ryan, I can't see where I am going to a ball game and ordering groceries. This is one of those times where I can't make it out of the box.

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Ed Rosenbaum, CEO, The Customer Service Rainmaker, Rainmaker Solutions

Where is the compelling reason for customers to want to pay more to order off the side of a truck? Anyone?

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Bob Phibbs, President/CEO, The Retail Doctor

While this may provide exposure, the real proof will be in the pudding—the initial trial use of Peapod, delight in the service provided, and ongoing use following. Good PR followed by a negative experience won't result in any long-term business!

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Brian Numainville, Principal, The Retail Feedback Group

Maybe some of the other commentators missed the part about this being a promotional campaign. It is eye catching and can be moved from location to location like a food truck or super mobile pop-up store. I give it an A for creativity and think it will provide exposure and downloads of their app, which presumably are the goals.

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Al McClain, CEO, Founder, RetailWire.com

The success of this technology as people are going to or from work makes sense. Using waiting time to accomplish a necessary chore is a valuable alternative. In this situation, people are standing and waiting, often going to or from home. What are other similar situations? Attending a sports event? When are people wandering around looking for something to do or thinking about what groceries they need to fix dinner or breakfast?

In those situations there is an opportunity. Other situations provide the novelty to educate consumers about the tool, but may not have much value beyond informing consumers about the tool.

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Camille P. Schuster, Ph.D., President, Global Collaborations, Inc.

I believe the reason why QR code adoption has been sluggish in North America is due to the lack of on-site training. In Europe and throughout Asia, they have a dedicated staff showing users how to use QR codes and download a QR code reader to their mobile phone.

If this campaign helps educate Joe Q Public about QR code and mobile shopping, I give it a thumbs up for the bigger picture.

Ed Dunn, Founder, (Stealth Operation)

I response to Al's concern, I don't think we naysayers "missed the part about this being a promotional campaign" as much as we're just not very impressed by it. I don't know how many trucks will be rolling around, but unless it's in the thousands, the odds are overwhelming that the only place most people will see one will be in a news story; and the (relatively) few who DO see one aren't likely to be impressed by the small selection of products highlighted; I give them a "C+" for creativity and an "incomplete" for execution.

'notcom'

I think it is a great plan. It would be very good for people that also have a long commute to know the option is available.

'maggiev'

Peapod's tour may be effective, since city-dwellers are slightly more likely to want to purchase delivery groceries. You can reach them in concentrated venues with a highly targeted message and drive trial.

However, consumer adoption of online grocery shopping has lagged behind other categories. To succeed, Peapod and the competition must continue to prove out the value to consumers who are not in the early adopter psychographic. These consumers are waiting for early adopters to tell them that the service is ready and the online grocers must package up that feedback and make it the cornerstone of their marketing to succeed.

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Mark Price, Managing Partner, LiftPoint Consulting, Inc.

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