Newer options for online delivery

December 24, 2013

By partnering with known resources, supermarkets could offer delivery with few headaches.

Supermarkets could soon have multiple ways to compete in online delivery without having to invest in their own trucks, staffs or costly infrastructure.  If Google Shopping Express proves viable in the San Francisco-San Jose area - and if others such as Instacart and Relay Foods gain consumer followings (in addition to Peapod and FreshDirect) - Amazon won’t have an open path for its rollout of Amazon Fresh.

Indeed, our own article last week detailed some service problems at Amazon Fresh – which serve to remind the industry this won’t be an easy discipline to master.  The Lempert Report has detailed Amazon Fresh in other recent storiesWe acknowledge Amazon’s lead in technology, methodology and the ability to leverage consumer purchases in numerous types of merchandise categories.  

Yet this process is just beginning, and new entrants could bring new competitive advantages.  Already, Google expanded its test by the Bay, which includes Whole Foods Market.  Near Washington, D.C., reports The Washington Post, Relay Foods has 35 pickup locations, Safeway also has a pickup option, and Giant Food has converted a former gas station into a drive-thru food store for online ordering.  At the Giant pickup site, a staffer places customer orders directly into their car trunks.  It is another choice beyond Peapod home delivery.

Other partnership choices could open up for supermarkets in trading areas throughout the country to make use of backhauling capacity in vehicles.  Supermarkets could structure programs to deliver online purchases of bulky dry grocery and paper goods people don’t want to carry, and maybe cut down on shelf displays at the same time. For example: 

  • Verizon Wireless has started a same-day delivery pilot in Philadelphia – after first establishing the service in New York City, San Francisco, Pittsburgh and Dallas.  For a $19.99 fee, customers who order devices and accessories online by 10 a.m. Monday through Friday can have them delivered by 7 p.m.
  • Magazine rack jobbers who set up displays in stores often go back empty – they could be the most efficient choice.  Another option could be daily newspaper delivery trucks, which make their rounds early and are often empty the rest of the day.

A Boston Consulting Group study cites affluent millennials as a primary target for same-day delivery. The Lempert Report’s twist expands the appeal to older customers who may find bulky goods simply inconvenient or physically challenging to transport.