Online Grocery: The Five Retailers That Do it Best

By Tim Denman — April 22, 2014

Grocers are increasing offering online shopping but have yet to get the service right. When it comes to shopping for food online, ease of use and quick delivery are the biggest barriers to customer adoption and are ripe for first-mover advantage.

New research by Wells Fargo Securities and Fluid Inc. unveils that although many of the top shop-from-home grocers advertise same-day delivery the reality is next-day delivery is the norm. Grocery customers are used to instant gratification when shopping from food and until the delivery hurdle can be addressed online grocery shopping is unlikely to take off.

The "Online Grocery: Is Anyone Doing it Right?" report examined the top eight players in the online grocery and ranked them based on user experience, personalization, content and features, selection, delivery and pick-up options and mobile site/app. Grocers were ranking on scale of 1 to 5 in each category and results averaged to provide an overall score.
The top five finishers were:

Fresh Direct. The pure-play grocer scored high marks for its simple interface, reorder experience and flexible delivery plans. In addition to an array of standard grocery options, the retailer also offers extensive ready-to-cook options. Currently available in New York, New Jersey, Connecticut, Philadelphia and Delaware the service has a $30 minimum and a $5.99 delivery charge. Unlimited delivery passes are also available for $12.99 a month. Wells Fargo reports consistent delivery yet a lack of convenient delivery time slots. Overall score: 4.14

Google Shopping Express.  The service is a courier from Target, Whole Foods, Walgreens and Costco so it has a host of product offerings, provided the shopper is only interested in non-perishable items — the service does not currently delivery perishable goods. According to the report, the service was designed with quick, mobile transactions in mind and, not surprisingly as a Google product, the software is top notch. Although Google Shopping Express offers same-day shipping, delivery times tend to book quickly making next-day delivery more commonplace. Delivery is currently free with a trial membership. Overall score: 3.42

Safeway. Safeway was the only brick and mortar retailer to make the top five. The grocer's online merchandise is consistence with their brick-and-mortar offerings and users are able to view and reorder past in-store purchases online via their loyalty/club card history. Shoppers are also able to attached notes to their orders (i.e., pick the juiciest tomatoes). Safeway's offering is not a homerun however as Wells Fargo noted that there is a separation between the brand site and delivery site which creates confusion and an unnecessary division. The brand promotes same-day delivery but orders must be placed by 8:30 a.m. and are not typically available for 8 to 12 hours. Overall score: 3.42

Amazon Fresh. Although the leader in e-com, Wells Fargo reports that the online giant has its work cut out for itself in the grocery space. Amazon's offering is modelled after the Amazon experience, not the grocery experience, and focuses on quantity no quality. Although goods are sourced from trustworthy and often organic companies, Amazon doesn't make this fact abundantly clear — an obvious place for improvement. On the plus side delivery windows are viewable before ordering, although Amazon often fails to delivery on its same-day promise. The mobile app comes with a segment-leading scanner that allows users to scan items they want to order/reorder. Amazon Fresh comes with a hefty price tag —its $299 annual fee could be too steep for some shoppers. Overall score: 3.14

Peapod. Peapod started as an independent grocery delivery service but was acquired by Royal Ahold and has morphed into a digital extension of Stop & Shop and Giant. Wells Fargo dubs the service "Behind the Pack" due to its clumsy and often difficult user experience. The service offers the same selection that shoppers are accustomed to in-store, but must suffer through multiple clicks and a cluttered interface that Wells Fargo describes as "like a rundown grocery store in need of a remodel." The service has a $60 minimum order for delivery, but orders can be picked up in-store for free. Overall score: 2.85

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