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Peapod Turns 25 This Year, Celebrates Many Firsts

In 1989, brothers Thomas and Andrew Parkinson were developing a new way to shop. With DOS programming software, dial-up modems and floppy disks, they created Peapod.com, and shopping from a computer for home-delivered goods was born.

Peapod was the first online grocery service to offer customers first in Chicago and later in 23 other U.S. markets the convenience of shopping anytime, anywhere.

Today, Peapod employs 1,500 people and offers more than 15,000 items to its online shoppers. In its 25-year history, it has filled more than 29 million grocery orders across U.S. markets.

It continues to leverage its relationship with supermarkets Stop & Shop, Giant Foods and Giant/Martin’s as an Ahold USA company.

25 years of firsts

Peapod has celebrated several milestones in its 25-year history, including being the first to:

  • handle client service online (1990);
  • offer online coupons (1991);
  • sort by price and unit price (1991);
  • show images and nutrition information (1994);
  • offer targeted and personalized ads (1995);
  • offer sorting by nutrition (low salt, low fat, etc.) (1995);
  • establish shopping centers equipped with eight different temperature zones (2001);
  • go mobile (2010); and
  • launch virtual grocery stores, installing more than 100 virtual shopping spots across the country in a short-term, interactive campaign promoting the free Peapod smartphone and tablet app (2012).

The free Peapod smartphone and tablet app released in 2010 was the first of its kind. Today 40 percent of the company’s total sales come from mobile devices, and 70 percent of its mobile sales are from apps.

“We’re not developing technology for technology’s sake,” Andrew Parkinson said. “Our direction is to further develop and amplify the digital experience and, frankly, continue to re-engineer the way we used to shop.”

For example, Peapod allows shoppers to sort groceries according to nutritional needs, so instead of scanning every product’s nutrition label for dairy-free, egg-free, gluten-free, etc., Peapod serves up only those products that meet the shoppers’ requirements.

Early this year, the Parkinson brothers launched Peapod Propulsion Labs, a digital innovation center in downtown Chicago.

“The idea is for the advancements to be exciting but relevant to multiple generations and to make sure we are well positioned to serve the future wave of digital natives,” said Thomas Parkinson, Peapod’s chief technology officer and co-founder.

From DOS to digital

When the Parkinson brothers started Peapod in 1989, it was a two-person operation based out of the family garage. Customers were required to have RAM space on their original Macintosh desktops, a dial-up modem and a floppy disk drive—a far cry from today’s mobile app, iCloud storage and easy-click checkout.

“If you look back at our first instructional video and compare it to the technology we have now, it’s pretty amusing,” said Thomas Parkinson.

In its early days, customers placed grocery orders online using Peapod’s software, and the brothers would handpick the desired items themselves at a local grocery store and deliver them to customers’ homes.

Today, Peapod operates sophisticated fulfillment centers, most with distinctive climate controlled zones, including several zones specific to produce type. Peapod’s delivery drivers arrive promptly at customer homes and businesses or customers swing by pick-up locations to collect their orders in under five minutes. Peapod’s transportation fleet of its familiar green delivery trucks seeks to use the most environmentally friendly fuel and technology available.

With 25 years behind it, Peapod’s founders say it is just getting started. The business continues to use a mix of innovative supply chain options to meet dynamic and growing customer demand. In addition to Peapod’s traditional home delivery service, more than 200 Pick-Up locations were launched in two years, most in locations connected to the supermarkets operated by Ahold’s retail divisions. It also continues to form partnerships with local artisans and small-batch vendors continue to come online, expanding Peapod’s product diversity, particularly in the areas of organic and sustainable foods.

“At 25, we’ve come into our own. We’re the best of a grocery store plus more,” said Andrew Parkinson.

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