A Peek Inside Peapod's Delivery Planning

Every second counts for the grocery delivery company that relies on valuable data to keep pace with competitors, such as Amazon and Instacart.
October 11, 2018

CHICAGO – The online grocery delivery space is highly competitive, and seconds matter more than ever, according to a report on Peapod and its competitors in Fooddive.com.

Peapod executives collect and meticulously study every bit of data to help keep them at the top of their game. A special room inside Peapod’s Chicago headquarters has 16 computers and five televisions that spit out real-time information, including weather updates, the pace at which orders are coming in and what percentage of delivery slots have been sold in each of the 24 markets where the company delivers groceries.

This data helps employees plan deliveries for the following day and tells workers how full the hundreds of Peapod trucks will be, what they’ll be carrying and what are the most efficient routes for drivers to take. It lets Peapod provide each driver with a detailed outline for their trip.  

As Peapod orders stream in, some are checked for accuracy. “The worst thing I can do is send a driver to the wrong address that costs him 10 or 15 minutes when we’re planning down to the minute on these routes,” said Paul Kapellas, senior manager for transportation planning, Peapod. 

While Peapod is the largest online grocery player by sales, there is concern by some observers that the organization and its owner, Ahold Delhaize of the Netherlands, aren’t moving fast enough to stay ahead of the competition. Analysts question whether the online grocer is failing to tap into its trove of valuable consumer data to help get closer to profitability, and some have characterized Ahold Delhaize's Peapod strategy as cautious.

Kantar Consulting estimates that Peapod, which posted sales of $833 million in 2017 and is growing by a compound annual growth rate of 8.4%, could see revenue top $1.2 billion by 2022.

As more players deepen their presence in the space, marketing becomes more difficult, advertising more expensive and customer acquisition costs much higher than before. Analysts think that could pose a challenge for Ahold Delhaize, which is financially focused and operates with a profitability-driven mindset, a target that can be elusive these days in online grocery.