Peapod
Tina Phillips
Rasmussen College

Peapod

Peapod, LLC is an online grocery delivery service. Peapod was founded by Andrew and Thomas Parkinson in 1989 as a lifestyle solution for busy families. In 1990, Peapod partnered with Jewel Food Stores to fulfill orders. In the beginning, Andrew, Thomas and their families did the shopping and packing and made deliveries with their own cars. (“Our company”)
They joined the internet in 1996 when they created and launched their own website, www.peapod.com, they also made the Inc. 500 list of fastest growing privately held US companies. Peapod was associated with Jewel until 1999 when it opened a facility in Niles, Illinois, and started picking orders from there. Using their own picking center helped them control inventory and product quality. (“Our company”)
In 2000, Peapod became a wholly-owned subsidiary of Royal Ahold, the international food provider based in The Netherlands, and pursued exclusive relationships with Ahold USA grocers, Stop & Shop and Giant Foods. Peapod was grown slowly and wisely by leveraging partnerships with other established companies. In mid-2001, when competitors like Webvan were going out of business, Royal Ahold purchased the remaining outstanding shares of Peapod, making Peapod the leader in the online grocery space. Since Peapod joined forces with Ahold they now serve more than 355,000 customers each year. (“Our company”)
Peapod operates under a centralized distribution model with two formats: warehouses and warerooms (room where goods are kept or displayed for sale). Both provide next-day delivery, but warerooms, which are dedicated areas attached to Ahold USA stores, are primarily used in new markets so as to leverage the stores’ infrastructures. Unlike Safeway and Albertson’s, who operate under an “in-store pick” model, centralized distribution allows Peapod to design a shopping space that supports efficiency and accuracy in order fulfillment. Peapod also holds more control over inventory and logistics under this model. (“Our company”)
Peapod provides over 8,000 products in a range of categories: produce; meat and seafood; deli items; prepared foods; natural and organic foods; Kosher foods; office and school supplies; seasonal items; video products; pet items; health and beauty aids; wine, beer and spirits (in specific markets); and private labels from Stop & Shop and Giant. The items are selected in the warehouse’s by Peapod personal shoppers Working in one of the company’s two state-of-the-art freestanding warehouses (in Chicago and Washington DC) or in any of 22 smaller warerooms (in the Stop & Shop markets), Peapod personal shoppers are trained to select quality meats and seafood and to improve the ritual of hand-picking, squeezing and smelling perishables. (“Our company”) Peapod started out with DOS programming software, dial-up modems and floppy disks when Thomas and Andrew Parkinson created Peapod.com and was based out of the family garage. Today they have a mobile app, iCloud storage and easy-click checkout. (“Peapod celebrates 25 years as America's leading online grocer,” 2014) Peapod organizes products and the customer’s purchase history to simplify the shopping experience. Helpful features include weekly specials, new items, express shop, shopping lists, sort features, NutriFilter, aisle browsing, item search, coupons, recipes, and more. (“Our company”)
Peapod has also evolved to include QR-Code driven mobile shopping walls, and grocery pick-up – using Chicagoland as its testing ground. Peapod announced that it would launch more than 100 virtual grocery stores at commuter rail stations in Boston, Connecticut, New York, New Jersey, Philadelphia, Washington, D.C. and Chicago. In a virtual grocery store, pictures of products are posted on a large public LCD display with QR codes underneath. Shoppers use their smartphones to scan the QR codes of the items they want. The products in their virtual shopping carts are delivered right to the customers’ homes at their selected delivery time. No need to waste time on the Internet or, worst case, actually go to a physical store. (Laudon & Laudon, 2013)
Shoppers at Peapod.com can view both their online ordering history and their offline purchases at nearby stores during the previous four months. Its Web site also features a shopping list that displays items in the order they can be found at the customer’s local store. Customers have the option of ordering online and picking it up at the store, or printing the shopping list and taking it to the store. The average online order is about $168, much larger than in traditional grocery stores. For these traditional supermarket chains, the value being offered to customers is convenience and time savings at prices only marginally higher than self-shopping. (Laudon & Laudon, 2013)

References
Our company. (n.d.). Retrieved from http://www.peapod.com/site/companyPages/our-company-overview.jsp
Laudon, K., & Laudon, J. (2013). E-commerce challenges. The story of online groceries.
Peapod celebrates 25 years as America's leading online grocer. (10/01/2014). Business Wire.