Giant Food, its parent company Ahold Delhaize and their partner Peapod were ahead of the curve when it came to e-commerce. And what began as a call-in grocery delivery and pickup feature has blossomed into full portfolio of offerings. This is just one of many reasons the company is The Griffin Report of the Northeast’s Retailer of the Year.
Gregg Dorazio’s half-decade at Giant Food began as a marketing position. When he was named e-commerce lead in 2019, there was a base for him to expand the grocer’s online portfolio before the COVID-19 pandemic came on the radar.
“It’s been an evolution. We’ve had a presence – or at least Ahold Delhaize has had a presence – in the market for about 20 years now,” he said. “That early presence has informed a lot of what we do today. It gave us a base to kind of build from.
“But the reason we consolidated things back in 2019 was to literally bring that Peapod business into Giant food, rebrand and relaunch it with delivery. Also, we were starting to scale pickup and adding third-party vendors like Instacart at the same time.”
Dorazio went on to note that these were the “three legs of Giant’s stool” – the three services beyond conventional grocery shopping that would prepare the company for the demand of e-commerce that came with the pandemic. But it mostly began with the integration of Peapod.
Peapod, now known as Peapod Digital Labs, began in Chicago as a next-day delivery service. Today, it allows companies such as Giant to fulfill the growing demand for e-commerce. According to Dorazio, satisfying customers is the “need for speed.”
“You see customers come in and say, ‘Can I have it the same day? Can I have it in two hours? Can I have it in one hour?’ So now you have other models that have popped up,” he explained. “And alongside Giant Delivers, which was the previous Peapod business, you have Instacart, it’s a third-party marketplace. I liken that to a personal shopper. “You are hiring that gig worker to go into the store for you. You can share your list, you can text back and forth, and they bring it to your house.”
Giant Delivers is a free delivery service with a minimum of $30 orders that boasts speeds as fast as four hours, Dorazio said. He and his team have seen traffic surge over the past three years.
Giant Food offers three online portals – mobile, mobile app and desktop. The convenience of the choices is enticing many customers that were already shopping with the company. The challenge now, according to Dorazio, is growing that marketplace into broader age ranges. Those who use the e-commerce opportunities enjoy the convenience of a handheld digital shopping list, coupons, weekly ads, Giant Flexible Rewards and personalized shopping lists. But how does the company get more customers to try it?
“It’s not a huge training opportunity. It’s more just an awareness build that [the app] is going to save you time,” he said. “This is going to save you the most money by coming through us and you’re using all those resources. They see the benefit.
“Once you get going – and once they get to their third, fourth or fifth orders – that’s where the savings really start to multiply. That’s where customers see the benefit.”
Dyani Hanrahan, VP of marketing and community relations, said Giant Food’s personalized online experience will draw people not only to its e-commerce offerings but also in-store experiences. She added that every associate throughout the company is trying to enhance the e-commerce experience. “We’ve got this new customer behavior, that’s very complex, that we always have to think about now,” she said. “We need to think about whether [the customer] is online only or brick-and-mortar only or are you a little bit of both? How does that personalized experience layer into that? That’s another great challenge for us.
“You do have to think in the moment of the customer and their journey. It’s not just about slapping the website on every piece of collateral. Everybody on our team has to think about it like that, ‘How do I contribute to the e-commerce option?’ It’s about their behavior and how we can provide solutions for those complex problems.”
Giant Food offers a myriad of solutions. Every market it serves has some form of e-commerce offerings, according to Ira Kress, president. Whether customers are hoping to have their products ready for pickup, delivered to their homes or searching for the most relevant coupons, the company has something to offer everyone. “We are uniquely positioned when it comes to e-commerce,” Kress said. “I say that because we offer effectively every channel that a customer has an interest in. We have our in-store pickup business across 98 percent of our stores. Effectively every market in which we serve we have in-store pickup customers go online, order a full assortment at store level, pay the same as in-store prices and have that order available for pickup within four hours.”
To further expand its e-commerce, Giant Food wants to make the services faster. The company has a fulfillment center in Hanover, Maryland. It acts as the dual center for store inventory deliveries, as well as e-commerce, and works to meet customer demand for same-day delivery.
After taking over the Maryland facility in 2019, Joe Urban, VP of supply chain operations, has seen its capacity double, to the point where another center is required. A new facility is set to open soon in Manassas, Virginia. That will help expand the company’s e-commerce and delivery capabilities, but also do so in a streamlined manner.
“Our primary focus is not only to meet the demand of home delivery, but it’s really the speed upon delivery as well,” Urban explained. “We really want to move about 70 percent same-day service out of those facilities. Again, it’s just speed of delivery. “Those orders are coming, and we want to make sure we’re able to turn those orders quickly. And by doing that in Manassas, we’ll be able to expand our zip codes and expand our market presence as well.”
With the Manassas center, Giant Food will be able to cover more than 100 percent of its market area. “By opening our Manassas facility, we’ll have 100 percent market cover-age even outside of our market area where we don’t have a brick-and-mortar presence,” Kress said. “We’ll have the ability to deliver – particularly on the East Coast, as an example – farther south, in Virginia. But more importantly, the speed to service grows exponentially. We can effectively have a 50 to 60 percent same-day model with the new fulfillment center.”
Giant Food also has a “cross-dock” facility in Milford, Delaware, that allows it to serve the primarily older population in that area. Through it, the company can move truck trailers to the facility, where products are then loaded onto Giant Delivery vans. The total time for product to be delivered to a customer’s house after being unloaded is about two hours, according to Urban.
On average, Giant has at least 100 delivery vans – including two electric ones – on the road at any given time. But that isn’t the only avenue for delivery. According to Kress, Giant was one of the first companies to market with a third-party delivery service – in this case, Instacart. Delivery through Instacart is available across Giant’s entire market, which further illustrates its commitment to same-day delivery.
“Customers choose to use whatever is most convenient for them,” Kress said. Dorazio likened third-party services such as Instacart to personal shoppers.
“That is a premium rush service, whereas Giant Delivers is more of an everyman kind of service. We offer free delivery with only a $30 minimum. Our speed is as fast as four hours, and our assortment is strong. From a holistic perspective, that’s been a part of our evolution is trying to make our e-commerce offering as competitive as possible.”
E-commerce also has helped streamline associates’ jobs. Edwin Ilarios Barrera, an assistant store manager in Virginia, recalled a specific item that a customer was looking for and he was able to find through his phone.
“When I first started, it was a lot harder when a customer would come to you and ask for a specific item. You had to know your entire store,” he said. “But now, I have a whole catalog of SKUs in my phone if a customer comes up to me.
“For example, I had a customer at my store asking me for mango chutney, looking for a specific brand. I went on my phone, went to the Giant App, typed in ‘mango chutney.’ It’s also easier to let me know we carry your product even if we don’t have it in my store. I can always point them to another location, another Giant where they could go.”
Giant Food’s future in e-commerce is rooted in increasing the range and speed of deliveries. However, it also includes possibilities for automation and further technological advancements, which Urban said are being explored.
The company recently launched its Endless Aisles platform. The idea is based on allowing customers to shop online – grocery and general merchandise – and have it shipped to their doors regardless of whether the items are carried in stores. Tens of thousands of SKUs are available, but the goal is to add an additional 100,000, according to Kress. It is currently being “tested and evolving.”
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