In its second-largest acquisition, Amazon buys the company for $970 million.
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In an effort to improve convenience, Peapod plans to launch later this year a text-message service that will alert customers when their delivery driver is due to arrive within 10 minutes, instead of making customers hang around their homes for a typical one- or two-hour delivery window. Intent on trimming operating costs in the low-margin grocery business, Peapod offers discounts to shoppers who pay directly from their bank accounts, an ACH transaction that can save Peapod on average a few dollars compared with a credit card payment.
Among the few areas where Peapod uses outside technology, it's working with Certona to improve the product recommendations it offers through its online NutriFilter system, which suggests products based on shoppers' preferences for particular food ingredients and levels of ingredients like sodium and corn sweeteners.
And to build stronger relations with grocery suppliers, it has developed with Ahold itemMaster.com, which grocery suppliers as well as other retailers can access to store and retrieve accurate and up-to-date descriptions and images of suppliers' products. Peapod is also benefitting in other ways from its Dutch parent, which operates online grocer Albert.nl in the Netherlands and shares its expertise in supply chain management, software development and the best ways to pick online orders, the Parkinsons say.
And Peapod may have a few surprises ahead. It's considering offering at least a limited multichannel shopping experience with a mobile app that would support shopping in Ahold stores or other new physical locations under the Peapod banner. It may also expand its online selection by allowing other grocery retailers to sell select goods at Peapod.com. "We would consider a marketplace or national shipping model of unique items," Andrew Parkinson says.
For now, the Parkinson brothers say they have their hands full serving and expanding in Ahold's 18-state territory from New Hampshire to Virginia, plus Peapod's Midwest market of Wisconsin, Illinois and Indiana. But in the years to come, consumers in other markets may get used to seeing a green Peapod delivery truck coming around the corner. What's not certain is whether those Peapod vans will be vying for parking spots with the delivery trucks of the big supermarket chains or of web-only retailers like Amazon.