Abstract This paper explores Peapod Online Grocery (2008) and its possibilities for success and failure based on several types of consumer behaviors. Most analysts do not expect the online grocery business to become more popular than the 8 to 10 percent of consumers that are estimated to purchase their products online. Parkinson, one of the founders of Peapod could not disagree more. “He states that this strategy can leverage the buying power of Ahold to make higher volume, lower priced purchases, lower distribution and transportation costs” ( Peter & Olson, 2010). The types of consumers attracted to online grocery shopping are also discussed as well as why these consumers find online …show more content…
For the convenience of saving time and simplifying their day, customers are willing to pay a monthly fee and a fee per order for packaging, shipping and delivery. Even perishable products are promised to be delivered to be in the best quality possible. The average order size for Peapod grocers is $150 per customer. Customers usually shop twice a month through Peapod Online grocer. According to the Peapod website on the internet, groceries are carefully packed by hand into bags and special temperature controlled containers designed to keep produce fresh, refrigerated products cold and frozen products frozen. Peapod ensure that its products “proper temperatures are always maintained”. Peapod ensures it customers that “we make sure your groceries stay at their optimal temperature whether you’re getting your groceries delivered or picking them up”. They “promise to make it right, on every order, every time. Period.” (Peapod, 2012).
I did some research and found a Peapod grocer in Westchester New York that delivered. Orders placed through Peapod.com for over $100 required a $6.95 service charge. Orders less than $100 required a $9.95 service charge. Orders placed through Peapod.com for pickup had no service charge and no minimum order. To place an order for delivery, your cart must total at least $60.00 plus an average fuel surcharge of $.84 per order. In order to