Pod people

Peapod, the online grocery service, sounds great -- but can it deliver?


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Janelle Brown
December 18, 1998 1:00AM (UTC)

I could live without the garlic. I survived when the eight-grain walnut bread didn't come. But when the toilet paper didn't show up for the third day in a row, I knew that the online grocery service Peapod was going to have to pay. If you deprive an apartment-dwelling journalist her triple-ply, double-roll Kleenex Cottonelle toilet tissue, you must suffer the consequences.

With online shopping, unfortunately, such revenge is difficult. Our march toward a world of e-commerce also means shopping experiences that are impersonally digital and faceless (although, if you hate Safeway-style faux chumminess at checkout lines, that may not be a bad development). There are advantages to being merely a log-in name and a bit of data representing an online transaction -- but rotten anonymous service from a Web site isn't one of them. Especially when you realize that your data is contributing to a new wave of marketing experiments.

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Peapod isn't a new grocery delivery service -- it began in 1989 as a software client for stand-alone, dial-up computer shopping through a partnership with Safeway. It didn't move onto the Web until September. Peapod now takes orders from your browser and distributes them in select cities via local warehouses maintained in conjunction with supermarket chains like Safeway and Randalls.

Peapod members select from a vast array of standard supermarket items -- from fresh produce to ice cream to liquor to bleach -- and choose a time to have the groceries delivered directly to their door. The monthly membership fee is $5, and each delivery costs $5 plus a surcharge of 5 percent of the total cost of the order -- and don't forget a tip for the delivery person. (Non-members simply pay a flat fee of $15 per delivery.) The cost of the actual goods are comparable to prices in an average (overpriced) grocery store.

It's not a cheap service, perhaps, but it's ideally tailored for busy, tech-savvy individuals who don't mind splurging to save time. Certainly, it appealed to me: I hate standing in lines, hunting for parking places and hauling groceries up flights of stairs, and whenever possible I avoid places with fluorescent lighting.

But my disastrous Peapod experience has left me thinking that simply heading to Safeway would have been less of a hassle.

I started my Peapod experiment in November, at the beginning of the inclement weather season, at my boyfriend's house. His cupboards, much like mine, are devoid of anything but condiments, two dusty boxes of Jell-O and several bizarre items of canned food. He has arrived at this sad state of affairs because he despises supermarkets and works long hours; it also makes his apartment a perfect test case for Peapod.

Shopping for groceries on Peapod is certainly more pleasant than shopping at a supermarket: Not only can you do quick searches for products (rather than trundling aimlessly through the aisles) and browse product categories, but the system "remembers" partially finished orders. I took two days to put together my first order, clicking over to Peapod every time I remembered something else I wanted to add to my virtual shopping cart.

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Unfortunately, you can't actually see the products. If you rely on visual memory -- thinking, "I buy the pickles in the green jar" without recalling that the brand name is actually Claussen -- you may have a difficult time finding the product you want from a long list of similar-sounding items, especially if Peapod doesn't actually have a picture available (and quite often, it doesn't). And there's a dearth of gourmet items -- don't expect to find your mango-avocado salsa, expensive caviar or freshly baked bread, because the only "gourmet" items you'll find are the in-house supermarket brands.

Still, I managed to put together an impressively long list of standard groceries, produce and snacks. Unfortunately, when I went to check out, I discovered that you must place an order at least 24 hours before your preferred delivery time. So much for the grand dinner I'd planned to impress my boyfriend with that night.

Instead, I requested that the groceries be delivered between 6 and 7:30 p.m. the next night. They arrived right on time, and in pristine condition: The chips weren't smashed, the tomatoes were ripe without being too ripe, the ice cream was still solidly frozen. Peapod had been out of stock on several items I'd ordered and instead brought similar replacements -- except for the eight-grain walnut bread, for which, apparently, no substitute could be found. (Members can also specify preferred substitutions, or give "shopper instructions.")

Peapod did completely forget my garlic, which shot my plans to make rosemary-garlic potatoes that evening. Still, I was willing to forgive the service, because of the sheer ease of the whole system. It's indescribably wonderful to have someone else haul your groceries home for you -- especially in bad weather (according to Peapod staffers, its delivery service is popular in the winter in Chicago). I almost felt guilty for the poor gangly teen who had to haul 12 bags of groceries up to my boyfriend's apartment in the rain, while I sat inside by the heater in my fuzzy slippers. This, I thought, was online commerce at its finest!

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The warm feeling didn't survive my second grocery delivery, however.

The "previous orders" feature on Peapod is quite nifty, allowing you to quickly reference and reorder everything you've ordered before. Using this feature, I was able to put together a second grocery order within a few minutes. But this time, I wanted the groceries delivered to my house, not my boyfriend's -- and there was no way to change my personal preferences or address on the Web site. Instead, I had to call a 1-800 customer service line and sit on hold before a human being manually changed the delivery address.

And that's when the trouble began. The order didn't arrive during the selected time; Peapod had tried to deliver to my boyfriend's house. A mistake, perhaps, but supremely irritating -- I had to call the customer service line again and arrange to have my order redelivered the next night to the correct address.

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That night, I again sat at home during the appointed time. Again, the groceries didn't arrive. The customer service line had no clue why, but promised me they'd be delivered within a specified hour the following day. Our home situation was getting desperate: We were out of both toilet paper and deodorant, not to mention milk for our coffee. My roommate was starting to suspect Peapod was just a scam; I was starting to smell.

The groceries did eventually arrive -- on the third try, and an hour late. But it wasn't until after the Peapod delivery boy departed that I realized the service had left out both the toilet tissue and the deodorant. After all that effort, I had to drag myself down to the supermarket anyway.

What could I do about it? I called and yelled at an anonymous customer service person -- but all she could do was apologize and send a reprimand via e-mail to the regional office that delivered my groceries. Somehow, this wasn't satisfying.

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Perhaps my situation was unique -- another Salon staffer has used Peapod on and off for a year, and swears by it -- but that doesn't make it any less frustrating. Considering how crucial groceries are, and how expensive Peapod's service is, customers deserve total reliability. Especially when you consider the other profits that Peapod is reaping from its customers.

Peapod is still far from profitable. According to analyst Juliana Nelson of the International Data Corporation, the company has a low-margin business that depends on huge volume rather than big mark-ups for its profits; and with only 100,000 members right now, Peapod is still in the red. Instead, Peapod is looking to a different part of its business for profits: The brand-new "Consumer Directions" program, which in its infant state provides 10-15 percent of the company revenue and which Peapod plans to push hard in 1999.

Consumer Directions is a service for the consumer goods industry: After anteing up $200,000 a year, companies like Procter and Gamble can use the Peapod service to test new products, marketing schemes, coupons and advertisements. Participating companies could, for example, compare whether a virtual coupon for 50 cents off Pepsi has more impact than one for 40 cents -- to try to find out how little incentive shoppers need -- or peddle a test product like chocolate-flavored toothpaste. Peapod members are guinea pigs whose demographic and buying patterns are being carefully studied -- as Peapod vice president George Douiare describes it, "How do consumers react to stimuli?"

So Peapod is selling not just groceries but its customers, too. In the grand scheme of things, this isn't unique -- big supermarkets already study your purchasing habits via "club cards" -- and it will become less unique as e-commerce grows. "Data mining" is a term on the lips of countless marketers, and everywhere you become a "member" and buy products, some company will track what your online transactions say about consumer behavior. As the Consumer Direct literature asks, analysts predict online shopping will be an $85 billion dollar industry by 2007: "Is your company ready to meet the challenge?"

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Big Brother, in other words, is watching. And heck, I'll even allow him to watch -- as long as he remembers my toilet paper. Until he does, I'll stick to my corner store.


Janelle Brown

Janelle Brown is a contributing writer for Salon.

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