First to market, still matters when it comes to basket size and customer loyalty when you are speaking about Online Grocery sales according to Foodservice Solutions® Grocerant Guru®. For those of you who can remember one of the first online grocery retailers that made a big splash was Webvan. However big the Webvan splash they did not last, nor were they first 10 years before Webvan was Peapod. Peapod was never flashy nor did they make a big splash but they survived and now lead in many online categories.
The demand for on consumer’s time has never been greater. Today consumers continue to be time starved, increasing price aware, and brand loyal. While Peapod is the most established, longest running online grocer, it continues to evolve it’s technology and expand into new markets. However Peapod is not growing at as fast as some of its newest competitors. What Peapod does however is lead the industry in the all important metric of Basket Size Matters and according to 1010data:
1. Peapod $ 147
2. FreshDirect $ 105
3. Instacart $ 98
4. AmazonFresh $ 84
According to the new report by 1010data, of the “four prominent grocery delivery companies operating in the United States today “FreshDirect, Peapod, Amazon Fresh and Instacart — through the first 10 months of 2016. Of the four, FreshDirect does the greatest total sales (47%, more than twice the share of the next largest company in the study, Peapod) but the leaders are also growing much more slowly than the others, with Instacart seeing year-over-year sales growth of 72% during the period and Amazon Fresh growing by 43% during that time.”
Peapod and FreshDirect experienced about 7% year-over-year sales growth during the same period, the study according to the 1010data study. 1010data study also revealed that “The established companies performed better when measured by average basket size, with Peapod’s shoppers spending an average of $147 per trip, well ahead of FreshDirect ($105), Instacart ($98) and Amazon Fresh ($84). 1010data ascribes this in part to Peapod’s offering lower delivery fees for orders above $100.”
The online landscape is evolving once again and grocerant niche mix and match bundling is once again the undercurrent of change within this sector of retail foodservice. Here is how 1010data found that consumers “are ordering from Peapod less frequently than its competitors — about once every 20 days — vs. once every two weeks from Amazon Fresh and FreshDirect. The company said those figures were based on customers who made their first orders in the fourth quarter of 2015 so as to ensure data uniformity.”
It’s true that Foodservice Solutions® team was asked to assist Webvan near the end of its existence but it was too little too late for Webvan. Their team while recognizing the value of the Ready-2-Eat and Heat-N-Eat grocerant niche they valued ‘basket size’ over frequency, much like all of the leaders within the sector today with the exception of Amazon via Amazon Prime Now. The team at Foodservice Solutions® recommends that as industries professionals you have not tried Amazon Prime Now that you do try it.
The consumer is dynamic not static your company, your brand, and you should be as well. Tacoma, Washington based www.FoodserviceSolutions.us can help you drive top line sales and bottom line profits in our evolving retail landscape. Contact: Steve@FoodserviceSolutions.us
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