Peapod Digital Labs (PDL) drives the digital and eCommerce innovation, technology and expertise for the retail brands of Ahold Delhaize USA – Food Lion, Giant Food, The Giant Co., Hannaford Supermarkets and Stop & Shop.
Originally known as Peapod Online Grocer or simply Peapod, the company was founded in 1989 and operated independently until Ahold USA acquired the company in 2000. Peapod closed in February 2020. The decision enabled Ahold Delhaize USA (ADUSA) to focus on expanding the position of its brands along the East Coast, according to a press release at the time.
Known now as Peapod Digital Labs, the Chicago-based grocery eCommerce company – The Shelby Report’s 2023 eCommerce Retailer of the Year – executes ADUSA’s strategy of enabling the local brands to be an omnichannel leader in their respective markets.
These capabilities include leveraging a proprietary cloud-based platform to create uniformity across ADUSA brands; a culture based on caring for its people; close partnerships with each retail brand; and the creation of a robust in-store picking app and native mobile apps that improve the online purchasing experience for associates and consumers.
Keith Nicks, executive leader of PDL, has nearly two decades of experience within the retail industry. Many of those years have been in various roles with Ahold Delhaize USA. He reflected on the advancement of technology in the grocery industry and what Peapod Digital Labs is doing to bring digital engagement to its retail partners.
Speaking first about how his career has changed, Nicks said customers today engage more with retailers.
“It’s changed considerably. I can remember when I started inside of digital, grocery eCommerce wasn’t prevalent,” he said. “It didn’t really exist outside of a few pure paid-play players.
“If you think about what we classify as digital engagement, customers who come to digital properties engage. Whether it’s looking at weekly ads, downloading coupons or engaging in loyalty programs, they are transacting online. That didn’t really exist when I first started in this space.”
Websites were an afterthought back then.
“The website was more of a newsletter,” Nicks recalled with a laugh. “Customers didn’t have the ability to create an account and sign in because there was no value in doing that. That’s certainly much different today.”
He then reflected on a general question, “People used to ask me, ‘Is it required to be a great grocery retailer, do you have to be a great tech company?’” Nicks said his answer to that question now is much different than a few years ago.
“If you asked me that question in 2016-17, I’d say, ‘No, you don’t have to. But technology is a nice place if you choose to leverage it to differentiate.’ That answer has changed,” Nicks said. “In order to be a great grocery retailer, you have to be a great tech company. Because when you look at the consumer base and how they engage digitally, it is a big part of the consumer experience.”
Paul Yang, PDL’s director of mobile engineering, pointed to an industry standard that about 40-50 percent of consumers engaged digitally in 2016. That number is now about 80 percent.
In the mid-2010s, Peapod Digital Labs made a commitment to provide a comprehensive eCommerce strategy. That commitment, alongside the COVID-19 pandemic, propelled the company and the industry toward omnichannel offerings.
“When you looked at our great local brands, there was a comprehensive strategy from an eCommerce perspective. As we got inside that research and spoke to consumers, that eCommerce strategy turned into an omnichannel strategy.”
The omnichannel strategy led directly to the creation of Peapod Digital Labs.
“We said, ‘Where do we need to focus a lot of time and energy to bring that strategy to life?’ That goes back to the birth of PDL because we did digital and eCommerce. That’s where we had to spend a lot of time, building those capabilities required to bring an omnichannel strategy to life.”
Continuing to address the emergence of technology in the grocery space, Nicks said key industry changes created pressure on how to scale eCommerce capabilities.
“Food is very emotional because you’re nourishing your family. Consumers, for a long time, didn’t like didn’t like the idea of having a stranger select their groceries – particularly in the fresh departments.”
The COVID-19 pandemic broke down that last barrier of consumer trust.
“The other demarcation moment was certainly the pandemic,” Nicks said.
Consumer relations are at the core of the grocery industry. When customers are in-store there are certain standards that must be met to gain market share, according to Nicks. These include improving in-stock positioning, customer service, checkout experience and cleanliness.
Likewise, when entering the online grocery business, fundamentals such as engaging customers, product transparency and capable technology are a must for success.
While many grocers were attempting to implement technology infrastructure during the pandemic, PDL provided its retail partners a leg up in their respective markets.
“We just had an incredible head start in managing that type of business versus other grocery retailers that had no experience,” Nicks said. “Creating technology capabilities is one thing. We were strengthening the foundational pieces … that gave us an incredible head start.”
PDL is strengthening its foundation by creating a universal platform for its retail partners by moving its internal systems to a cloud-based platform that promises uniform technology across the ADUSA retail space, according to Amit Shah, chief technology officer.
Nicks explained that this platform, along with new native mobile apps, are what set PDL apart from other online grocery retailers.
“Some folks would take on this omnichannel strategy and say, ‘We want to be an omnichannel retailer. We lack the capabilities to be an online retailer, so we need to build those.’ That is the foundational build of the technology. There are certainly capabilities to go along with that,” he said.
“From an investment perspective, I would say once they get those built, then the investment kind of changes. It becomes more a run the business.”
That is not the mentality at Peapod Digital Labs and Ahold Delhaize USA.
“We’re going to continue to invest in our consumers,” Nicks said. “What are their pain points? What are their influences? Then also, the associates inside of the store making it easier, more efficient for the work they do to serve customers.”
The company is working to improve the lives of its associates through PDL’s proprietary online order fulfillment picking app.
According to Barb Miles, the app’s group product manager, the picking app is utilizing the new cloud-based platform and AI to streamline the picking process. It also improves the onboarding time of new associates for PDL’s grocery partners by building on a simple design and integrating widely used touch screen features, according to Senior Design Manager Tom Roof.
Peapod Digital Labs partners with the Ahold Delhaize Retail Media team to bring an omnichannel experience to the partner brands’ advertising partners. AD Retail Media is a group within PDL that connects its customers to the full path of purchase across all the partner brands, according to Margit Kittridge, advertising technology lead, Ahold Delhaize Retail Media Team.
“Our capabilities include connected TV, online video, offsite display, social media, digital out-of-home and other eCommerce platforms,” she explained.
While AD Retail Media works inside of PDL, the goal of both organizations is to provide the best experience for its customers.
“That’s really how we go to business. It’s all in service of delivering for our brands, which ultimately means we’re delivering for customers.”
Likewise, he said PDL has maintained a “startup culture” for its own associates.
“Which is very difficult in a very large organization. And if you spend any time in PDL, you would say for sure we’ve maintained that. That’s quite important that we maintain that,” he said.
The office culture is boiled down to a simple word, “fun,” according to Theresa Funk, director of communications and PR.
“One of our corporate values is humor,” she said. “And I think that regardless of what we’re doing, we bring humor and levity and fun into the work. Even when the work is hard and the days are long, we’re still going to have a good time. We’re going to make connections with each other.”
Nicks noted that PDL’s culture also emphasizes individual achievements.
“We spend a ton of time on understanding our contribution, to not only Ahold Delhaize, but also understanding our individual contribution,” he said. “We all say that we see our fingerprints on our work. … The reason why that’s important is, there are some places you go to work at, and you can’t say that. It’s something we keep very top-of-mind.”
Continuing to speak to the company’s culture, he never gives himself credit for what PDL has been able to accomplish.
“Even as the senior leader for PDL, I don’t get to say, ‘Here’s what our culture is going to be.’ I participate in our culture with the rest of the associates within Peapod Digital Labs. We’re not fearful of failure, we run toward it because we know we learn from failure. It allows us to take the next risk, which can translate into a win.”
Technology continues to be an integral part of the grocery industry. PDL has been working within the digital grocery space for decades, and it looks now into the future to connect its partner brands with their customers.
“We don’t look at it as a sprint. We look at it as a marathon,” Nicks said. “And digital is a core piece of the consumer journey, no matter where the consumer transacts – whether it’s online or inside our stores. We’re continuing to invest and inside those investments [is] the consumer.”
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