Online grocery ordering is gaining traction in the U.S. and should receive a further boost via Giant Foods’ dedicated hub. As the following Retail Dive article reports, this former store site will offer consumers different types of order fulfillment.
Giant Food Stores is opening an e-commerce pickup and fulfillment facility in Lancaster, Pennsylvania, on Feb. 12. The 38,000-square foot online grocery pickup facility is being marketed under a new brand: Giant Direct, Powered by Peapod, according to a company press release.
Ahold Delhaize, which owns Giant as well as e-grocer Peapod, closed the Lancaster Giant store in 2017 and announced in June 2018 it would reopen it as part of a $22 million investment in the area that also included four store remodels, price investments and a new fuel center.
The Giant Direct, Powered by Peapod facility will offer a pickup option where online orders are delivered directly to customers’ vehicles outside the store. Customers also can visit a walk-up vestibule featuring tablets where they can place their order. In addition, the hub also will allow Giant to serve more local residents by delivering groceries directly to shoppers.
The new online grocery pickup outlet would check off a lot of boxes for Ahold Delhaize and its Giant Foods banner. For one, the strategy opens up a new way to repurpose underperforming stores in key regions. It also puts fulfillment closer to where consumers live, which is crucial for the speedy service that so many shoppers demand these days.
As Mercator has been reporting, online and mobile grocery sales have very low penetration in the U.S., estimated to be at 1-2% of total sales, compared with about 8-9% in the U.K. So it’s no surprise grocers are throwing a lot of resources at enabling their customers to take advantage of this emerging channel. Many grocery stores are now offering delivery and curbside pickup, but it’s a logistics and space challenge to handle this in existing stores. U.S. grocers will be watching how Giant’s dedicated facility does for the online sales channel.
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group
