Peapod Makes Mass Transit Connection with Commuters

Discussion
Feb 10, 2012

It worked in Seoul, so why not in Philly?

A RetailWire story back in July reported on Tesco’s virtual store set up on a board at train stations in South Korea where consumers could use their smartphones to scan QR codes on grocery items and order them for delivery later that day. When readers were asked if a similar system would be a success here in the U.S., 64 percent responded that it would be somewhat to very successful.

Now, comes word that Peapod has indeed set up a similar system on transit station ad boards owned by Titan in Philadelphia. Titan is the largest transit advertising company operating in North America.

According to a Peapod press release, "Users simply scan the QR code listed in the ad to get the Peapod app, use the barcode icon to start scanning the items on the ads and once in the app, browse thousands of items — just as they would in the brick and mortar grocery store. Peapod is also running a special promotion. Users are encouraged use ‘PHILLYRAIL’ as a promo code for $20 off their first order and 60 days of free delivery."

Discussion Questions: Now that Peapod has jumped in, do you expect to see big growth in transit station programs for online grocery services in major metro areas around the U.S.? Is Peapod the most likely to succeed with this approach or do you see others currently in online grocery (or not) that would benefit from virtual store technology using QR codes?

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10 Comments on "Peapod Makes Mass Transit Connection with Commuters"

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Paula Rosenblum
BrainTrust

I must say, I never thought train stations would become a selling channel before TV, but it oddly makes all the sense in the world.

Anytime you have people with idle time on their hands, a smart phone, and a big stretch of wall, marketing and selling can happen. I do wonder about people getting so enthralled they miss their trains — but heck yeah — better to leave the house 1/2 hour early to shop on the platform than go to the store. Especially if the product is available for pick-up on your way home that evening.

Max Goldberg
BrainTrust

It’s a good idea, but will it include produce, meat and seafood? Without these categories, consumers will still need to visit the local grocer. With these items, the proof will be in the quality of the perishables.

Rick Boretsky
Guest
Rick Boretsky
5 years 4 months ago

Awesome use of technology. It seems to be working in South Korea, no reason it cannot work in North America too.

Liz Crawford
BrainTrust

I love it. The commuter is the perfect captive audience — suburban, working adults with smartphones. While the absolute number of shoppers may be finite, the concept is a good one because it trains shoppers to use the app as a retail channel.

Mark Heckman
BrainTrust

I first heard of this concept about a year ago in South Korea, (as George Anderson indicates in this discussion article), where public transit was widely used among the executive class, and thought it to be an outstanding idea. When there is a good match of audience and need state, advertising works!

But despite consumer surveys that predict critical mass acceptance, home delivery is still a luxury item for many and totally off the radar screen for most middle income Americans. However, this service can be attractive to those that “time” is a more scarce commodity than cash. Accordingly, if the transit audience represents a good fit and connects to the cash rich, “time starved,” there will likely be a good return on this type of interactive advertising placement. If not, it will more likely become be an expensive repository for graffiti.

Roger Saunders
BrainTrust

As the age-old aphorism pointed out, “Imitation is the sincerest form of flattery.” Peapod appears to be effectively modeling the successful Tesco strategy that was pioneered in South Korea.

Peapod has made use of outdoor advertising over the years, so transit advertising fits into their experience. With nearly half of all cell phones being smartphones, the device in the U.S. is in the hands of the consumer, who if they are in a commuter role, is dealing with an element of “time poverty.”

Top reasons that consumers shop particular grocers, based on the BIGinsight Monthly Consumer Survey are price, selection, location, quality, one-stop shopping, and service, in that order.

Location and service are covered for these commuters in larger urban areas. Exeuction of quality, price, selection, and one-stop convenience will have to be addressed. That comes in the execution. This program should have a group of consumers eager for testing — there is opportunity here, provided Peapod can address these varied points.

Roy White
BrainTrust

If nothing else, it will provide commuters with something to do while undergoing the interminable wait for a crowded train. But on a more serious note, this is a nice application of technology that makes available to a large number of busy, time-challenged people to do at least part of their grocery shopping in a very easy way. QR codes are opening a lot of options for consumers and this appears to be one of the more useful.

Lee Peterson
BrainTrust

I would just like to see online grocery get going, period. We had Peapod here for a of couple years and it was the best thing imaginable: staples at your doorstep. It left us with only the interesting food shopping left to do!

Once the delivery mode is figured out, this idea and anything like it (airports, parking lots, in-car screens) would take off. Please hurry.

Craig Sundstrom
Guest

“It worked in Seoul, so why not in Philly?”

One obvious reason is that the demographics are vastly different: in Seoul, I imagine, every strata of the (huge) population uses the mass transit system(s), whereas in Philly the numbers are smaller in both quantity and quality (certainly for the two subway lines, probably less so for SEPTA’s regional rail lines). But I wish them well.

Ken Lonyai
BrainTrust

It’s definitely a first step in the right direction, likely to catch on, but as adoption moves beyond novelty, some of the inherent technical issues will need to be overcome to not fail.

QR codes are simply a crutch and ultimately a mediocre technology. While first movers gain certain advantages, the companies that are smarter about technology will prevail as the concept matures.

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