Dive Brief:
- Peapod has rolled out a suite of new pricing promotions aimed at improving its value image in an increasingly competitive online grocery market, according to a news release. This includes lower everyday prices on thousands of products, including natural and organic items, dairy and fresh produce.
- Peapod, a division of Dutch grocer Ahold Delhaize, also is encouraging large orders with savings on bulk purchases and commonly bundled items. The new "Buy More Save More" program will offer savings when shoppers order multiple products within select categories, while its "Bundles of Savings" promotion will give discounts on commonly grouped items like salad fixings and spaghetti-making ingredients.
- To encourage orders during slower days of the week, Peapod has introduced a discounted version of its PodPass delivery subscription called PodPass Midweek. The pass costs $55 — less than half the price of a regular subscription — and offers free delivery for a year on Tuesday, Wednesday and Thursday.
Dive Insight:
Peapod needs to stay competitive with Walmart and Amazon, which are both rapidly expanding their home delivery services and offering competitive pricing. Amazon Prime members can now get free two-hour delivery from Whole Foods stores in seven cities, while Walmart plans to offer delivery in 100 cities by the end of this year.
Other retailers, including Kroger, Albertsons' various banners and scores of regional players, also are taking their offerings online, making it even harder for Peapod to stand out. Many grocery chains have joined with Instacart, which is focused this year on improving its online experience, chief business officer Nilam Ganenthiran recently told Food Dive.
Despite Peapod’s decades of experience in e-grocery, it’s struggling to make inroads in the two dozen markets where it operates. Executives with Ahold Delhaize, which owns Peapod, revealed last year that the service’s growth has slowed because of intensifying competition.
As Peapod’s chief marketing officer Carrie Bienkowski told Food Dive last year, online grocery has become “the Wild West.”
With that in mind, Ahold Delhaize and Peapod aren’t going down without a fight. In addition to the just-announced price cuts, Peapod also has introduced voice and text ordering, new meal kits and a menu planning integration with The Dinner Daily.
Peapod’s current model can’t compete with the likes of Amazon and Instacart on fast delivery, so it’s zeroing in on the stock-up trips that are its bread and butter. These extensive new price promotions should snare new customers and build baskets with existing ones, but will likely struggle to match the mainstream awareness that Amazon and Walmart are gaining. Peapod will need to heavily promote its new savings, and continue offering new reasons to shop as the battle for online grocery dollars rages on.
