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Progressive Grocer wrapped up its first Connected Consumer Summit Sept. 10, 2014, confirming the need for an event dedicated to bringing together grocery retailers, CPG marketers and technology companies. The exclusive, invitation-only event featured four keynote presentations, boardroom briefings presented by technology companies, and one-on-one meetings.
The goal of the Connected Consumer Summit was to focus on the topics and issues that will help retailers and CPG companies collaborate more effectively to drive increased store traffic and increased basket size by leveraging digital marketing and media programs.
Peapod ups technical ante with 'Peapod Propulsion Labs'
The program kicked off on Tuesday, Sept. 9, 2014, with a presentation by John Burchard, SVP and CIO/CAO of Peapod, an Ahold company. Burchard gave a refreshingly candid view of the Peapod online grocery business, including the recent unveiling of the company’s new 350,000-square-foot automated warehouse in Jersey City, N.J., which greatly extends the internet retailer's ability to serve the New York City/New Jersey market.
Peapod launched pick-up stations, or PUPs/Peapod Pick-Ups, in 2013, providing a different layer of convenience for shoppers. The company has recently starting charging $2.95 for the service, which had been offered for free. Peapod operates in Chicago, Milwaukee, Indianapolis, Connecticut, Massachusetts, Rhode Island, Southern New Hampshire, New York, New Jersey, Maryland, Virginia, Washington, D.C., and Philadelphia. Peapod has been a tad more conservative than planned on extending PUPs, but only because, says Burchard, click and collect isn’t for everyone, and the company wants to make sure there’s enough support for sustainability where it's available. Like many others in the industry, Burchard cited the aggressive expansion of the now defunct Webvan as a lesson in why it pays to be a little cautious with expansion. Peapod is profitable in its more mature markets, and is working to get emerging markets to profit before pushing additional expansion.
Peapod's greatest expense is its fleet of 600 trucks, which carry about 20 orders per the twice-daily eight-hour shifts. The company uses UPS Roadnet Technologies’ SmartMile logistics for route planning and transportation management, much as airlines work to ensure each plane is full. The company promotes either a six-hour “green” delivery window, which allows more transportation flexibility, as well as a narrowed two-hour delivery window. Peapod also integrates GPS navigation and text messages to communicate with customers ahead of a stop and at the time of a stop. Peapod has done extensive work integrating proprietary and third-party software to create efficiency and customer engagement, but Burchard says Peapod needs to do more to communicate these initiatives with its customers.
When Peapod recognized it was falling behind on software development, parent company Ahold committed on a significant level. Peapod now has a digital solutions division, which Burchard refers to as Peapod’s Propulsion Lab, in Chicago. Ahold also has a digital district in Boston, which consists of six stores, where digital initiatives can be tested and tweaked before a broader rollout. One example of a work-in-progress is the company’s much-lauded ScanIt technology, where shoppers can scan UPCs as they shop, paying at the end. “But standing in line is no good, and even with ScanIt customers can wait to check out,” says Burchard. One basic challenge is that internal wireless networks aren’t always optimal.