Posted in Operations & IT Articles, Total Reads: 2673
, Published on 15 April 2014
'27% of commuters say they want virtual shopping mall' read The Grocer. A survey on 2159 shoppers in UK revealed that virtual shopping is the next trending area in retail. Following the successful virtual shopping ventures by Tesco in South Korea (2011) and in an experimental site in Gatwick Airport (2012), customers are enthralled by the option of shopping anywhere, on the go. This lead Asda to follow the lead by offering customers in Reading, an option to shop online and get them delivered from a van outside the station.
It was summer 2013 and Mike Brennan, COO of Peapod was thinking aback. In a market where more and more retailers wanted to cut logistics costs and effective ways of reaching the target customer, Peapod stood like a sleeping online grocer till the fall of 2012. In 2012, Peapod came up with an exciting idea of mimicking Tesco and becoming the first U.S. retailer to bring the traditional brick and mortar grocery stores to the hallway of the State and Lake Street CTA station in Chicago. It had 7 foot tall 'shelves' (billboards) which had everything from fresh produce to essential groceries. All one had to do was to download the peapod app, scan the QR codes of the items they wish to purchase and place an order. The items were at their doorstep! More importantly, customers could do it on the go, in the subways!
The overwhelming response lead to Peapod opening 100 virtual shopping billboards in Boston, Connecticut, New York, New Jersey, Philadelphia, Washington, D.C. and Chicago. Customers made the most of their wait times in transit and Peapod could deliver scheduled deliveries as well.
Brennan wanted to extend the idea of virtual shopping to another level where people can buy at their convenience. While the virtual store was first of a kind in U.S, the actual 'Shop anywhere, anytime' strapline of Peapod was yet to reach the hyper local platforms. A whole new idea was born.
In the summer of 2013, it was decided that Peapod will take virtual shopping to platforms and hit the streets, literally! The roving bill board, the peapod truck will be headed to ballparks, concerts and even coffee shops. It will make stops at Citizens Bank Park (Philadelphia), Citi Field and Yankee Stadium (New York), Fenway Park (Boston), and Wrigley Field and U.S. Cellular Field (Chicago). Customers can download their app and purchase items on the go. As a marketing trick, it also had 'human billboards' giving away free t-shirts to those who purchase through the mobile truck. It also sported a cart car – a 2014 Chevy Spark outfitted as a shopping cart with elevated handle bars.
Peapod also teamed up with Barilla, Coca-Cola, Kimberly Clark, Proctor & Gamble and Reckitt Benckiser to popularise its business through ads. The products on display were changed on a rotational basis. Needless to say, the Peapod app saw a rise in number of downloads which is proof of it engaging the target audience.
Peapod's mass implementation of virtual shopping turned highly successful but it will be interesting to see how the industry is going to react and adapt to changing trends.
According to the Porter's generic strategies, Peapod adopted the differentiation strategy by capturing a broader audience by mobile vans even though there was a higher cost involved. As shown by company reports, there is a hike in the mobile app downloads which shows the strategy paid off.
According to the Ansoff's matrix, Peapod has catered to a new set of customers with the same product line thereby developing its market.
Well planned implementation of technology can help e-businesses flourish by cutting down costs especially when it comes to a country like India where the sales volumes are high. A well-planned market attracting technique will prove handy. Capturing the customer's imagination is essential for any e-retails business as customers connect will be the differentiating factor to succeed.
This article has been authored by Kavea Madhanagopal and Abhishek Ramchandran from TAPMI
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