PEAPOD PLANS FAST ROLLOUT, LOCAL MARKETING

DAVID ORGEL

COLUMBUS, Ohio -- Peapod, Evanston, Ill., plans a fast rollout of on-line shopping and delivery services and a more intense local marketing push following a deal struck earlier this month with Kroger's division here.

The company has also made technological improvements to its operation and has targeted a number of additional cities for future rollouts, Andrew Parkinson, president and chief executive officer, said in an interview with SN.

Peapod said earlier this month it will service Kroger's Columbus operation beginning in September. Kroger will offer consumers and businesses the opportunity to shop by computer and order for home delivery from the entire 20,000-item selection of its stores.

Kroger shoppers in Columbus will gain an additional ordering option as Dispatch Interactive Television, based here, has secured rights to offer the Kroger-Peapod service via its interactive television network now under development. DITV will also provide consumer marketing support.

Peapod's service can also be accessed directly through the Internet or by dial-up.

Parkinson said Peapod has been investigating about four or five other cities about startups.

"We'd like to go to Atlanta, Los Angeles, Seattle and Washington," he said. "Washington would be a particularly great market, but we haven't found a retailer there yet."

Parkinson said Peapod's Columbus effort will probably reach most regions of that market by the end of this year. He was interviewed following a speech at the Grocery Manufacturers of America's Executive Conference held in White Sulphur Springs, W.Va.

"This time we'll be marketing faster and much more aggressively, and opening more zones faster. We now have on-line registration where we send customers a computer disk [with ordering software]. That multiplies by 10 our ability to get members. So now we can market better to get volume faster.

"Also with marketing, we've learned that radio works in combination with direct mail and point of purchase. We will take that learning into this [Columbus] market."

Kroger has offered home and office grocery delivery in Columbus via phone and fax for several years and last fall the division offered the service via its home page on the World Wide Web. Kroger's Dallas division offers home shopping through a third-party provider and a commercial on-line service.

The alliance with Dispatch Interactive Television represents a new customer-ordering strategy for the Kroger-Peapod venture. DITV will provide Columbus-area consumers with a television set top box, a universal remote control device and a magnetic card reader for credit cards. Enhancements of Peapod's systems are fueling efficiencies and growth, Parkinson stressed. He said the program's content has been enhanced and now includes recipes and shopping tips.

Software has also been upgraded, he said, and Peapod is exploring the use of handheld scanners for order pickers.

Peapod expects to be processing some $1.5 billion in orders by the year 2001, he said. "We're doing $40,000 to $70,000 in volume per week, per store. Some days we'll do half a store's volume."

While Peapod's system involves picking from store shelves, eventually the company hopes to pull from warehouses to cut costs.