Ahold Delhaize tapping into Peapod Digital Labs for e-commerce expansion
https://www.grocerydive.com/news/ahold-delhaize-dive-awards/566197/
For a company like Ahold Delhaize that's been in the grocery delivery business for three decades, refreshing its core strategy is key to building the e-commerce experience customers want.
That's why the company is tapping into Peapod Digital Labs, the stand-alone e-commerce unit that launched last year and drives its U.S. digital business, to deliver more cohesive omnichannel efforts and create a more seamless e-commerce experience.
The ultimate goal is to expand the capabilities of its already strong brick-and-mortar brands, JJ Fleeman, president of Peapod Digital Labs, told Grocery Dive.
For a company like Ahold Delhaize that's been in the grocery delivery business for three decades, refreshing its core strategy is key to building the e-commerce experience customers want.
That's why the company is tapping into Peapod Digital Labs, the stand-alone e-commerce unit that launched last year and drives its U.S. digital business, to deliver more cohesive omnichannel efforts and create a more seamless e-commerce experience.
The ultimate goal is to expand the capabilities of its already strong brick-and-mortar brands, JJ Fleeman, president of Peapod Digital Labs, told Grocery Dive.
“Ahold Delhaize offers an interesting case in e-commerce. On one hand, they kind of are the veterans in online grocery, I mean Peapod has existed for 30 years, but what is interesting is that until recently we hadn’t really seen them leverage that as an advantage at all of their banners, and now that’s what we see them trying to do more and more of.”
Ahold Delhaize's biggest effort in recent months has been the introduction of click-and-collect to more stores and more banners. In January, the company launched Giant Direct, powered by Peapod, at Giant Food Stores. The launch included a dedicated 38,000-square-foot e-commerce hub in Lancaster, Pennsylvania, to manage deliveries and offer pickup for shoppers. Giant Direct has since rolled out to 115 locations and should be available to 90% of the banner’s shoppers by year’s end.
Summertime saw a flurry of activity, with Stop & Shop launching same-day store pickup at 20 stores and Food Lion introducing Food Lion To-Go at select stores. (It has since expanded to more than 50.) Giant Food kicked off Giant Pickup in July, and plans to offer it in 100 stores by the end of the year.
Rather than operating under Peapod, however, each banner's click-and-collect is being branded individually. Fleeman said converting the Peapod brand to the brick-and-mortar brand is important to customers, though Peapod will still be the behind-the-scenes operation engine.
“It just really creates that seamless experience that we saw with the research that customers were really not just wanting, but expecting from us. That’s one of the key reasons that we made a number of these changes.”
Ahold Delhaize is on track to reach 600 click-and-collect locations in 2019, with a goal of reaching 65% of customers with either same-day delivery or grocery pickup, Fleeman said.
"We are one of the largest food delivery businesses on the East Coast of the United States through our legacy Peapod business," Fleeman said. "In order to deliver the omnichannel strategy that we wanted to, we felt like click-and-collect was something we needed to expand," he said.
While the progress is notable, the introduction of store pickup across banners came well after many other retailers. But Fleeman said he doesn't think Ahold Delhaize has fallen behind. Rather, the company built on its existing delivery infrastructure to offer an integrated omnichannel experience for its customers.
“It was a strategic choice at the time and I don’t think it disadvantaged us in any way because if you look at the size of our [e-commerce] business, we’re still one of the leaders in that space.”
In addition to click-and-collect, Ahold Delhaize has plans to expand delivery options. Most recently, it announced the rebrand of Giant Delivers and said it is testing same-day delivery in downtown Washington, D.C.
Now, Fleeman said the company is looking to bolster its delivery capabilities with more same-day tests, the details of which will be shared in the future.
"What we've been doing is taking a look at how we can transform the delivery business from next-day to same-day,” he said, though next-day is still a critical part of the company’s strategy, he said.
“Ahold Delhaize is also looking at different fulfillment options, according , such as the micro-fulfillment facility being tested at Stop & Shop. Micro-fulfillment allows the company to be more effective and offer faster, more efficient delivery and click-and-collect.”
Peapod Digital Labs is also working on a proprietary e-commerce and digital platform that will offer unique functionality for the company, Fleeman said, which is expected to launch in the coming months.
Gundelach said it's clear Ahold Delhaize has stepped up its game in the last year.
"I think in the last, let's call it 12 to 18 months, we've seen them step on the gas a bit, whether that be the rollout of click-and-collect or using the Peapod assets that they've had," she said.
