Warc Blog

Peapod hits online grocery sweet spot

8 April 2014
KISSIMMEE, FL: Online grocery shoppers exhibit many similarities to their counterparts in physical stores when it comes to the number and type of products they buy, a leading executive has revealed.

Tim Dorgan, vice president/managing director at online grocery service at Peapod, told delegates at the IRI Summit 2014 that the size of an average basket purchased on its site contained 55 to 60 items.

"If you looked at a typical Peapod basket, you wouldn't be shocked by anything you saw," he said. (For more, including demographic details about early adopters in this space, read Warc's exclusive report: Understanding the online grocery shopper.)

Over an entire year, members of Peapod's clientele usually acquire between 250 and 300 separate products – a figure which is "fairly similar to what we would see in brick-and-mortar" outlets, too.

"Perishables as a percent of our basket are roughly the same as you would see in a store," Dorgan added, by way of illustration.

There are, however, some differences resulting from the fact that "e-grocery" shoppers are often young, and more affluent than the norm.

"We are overdeveloped on organics, and I think that's due to the nature of our audience," Dorgan said.

In spite of this, the site's core user is not immune to the appeal of a bargain – meaning promotional tactics that are traditionally effective offline can be translated into this space.

"What do Peapod shoppers react to? Ten for ten, five for five, buy one get one free. It's the things that we've been seeing in grocery forever and ever, and those work in ecommerce," said Dorgan.

As such, the sweet spot for grocery ecommerce involves mixing the "timeless and timely". Providing the right assortment, quality customer service and relevant merchandising tools are all in the former group, for example.

By contrast, the "timely" aspects of the formula incorporate multiplatform accessibility, being able to shop anytime and anywhere, building advanced fulfilment and logistics services and – increasingly – customisation.

"It has got to be a blend of those two," Dorgan informed the IRI delegates.

Data sourced from Warc

 
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