STOP & SHOP WILL PILOT NEW KIOSKS

PETER PERROTTA

QUINCY, Mass. -- In an effort to build incremental sales in a new channel, Stop & Shop Supermarket Co. will pilot an in-store kiosk program that allows shoppers to order up to 50,000 hard-to-find items not stocked on the shelves, officials here said.

Faith Weiner, director of communications for the 320-store chain, said Stop & Shop will begin a 90-day pilot in an unspecified number of stores in April that will feature the new service called the "Endless Aisle."

Stop & Shop officials said it has signed an agreement with Netgrocer, North Brunswick, N.J., an online grocery retailer, to provide this service.

"We will look at a first report card after 90 days and then decide where to go from there," Weiner told SN. She explained that plans for an additional rollout will be based on those results.

The arrangement calls for Netgrocer to install kiosks that will be located near the customer service desk where shoppers can access the "Endless Aisle." Moreover, Stop & Shop's online shoppers will also be able to access the new program at www.stopandshop.com.

Lisa Kent, president and chief executive officer, Netgrocer, said Netgrocer will assume the expense of outfitting participating stores with the kiosks.

Shoppers will also be able to submit orders and make payments at the kiosks, she added.

Shoppers' orders can be paid for by credit card or check at the kiosks. Cash payments for orders will be accepted at customer service. Ordered items are shipped to the customer's home via Federal Express within seven days. Shoppers will be responsible for paying shipping costs, Kent added.

Shipping costs are $4.99 for items under $30, $6.99 for items from $30 to $44.99, $8.99 for items $45 to $59.99 and $11.99 for items over $60.

Weiner said Stop & Shop will launch a marketing campaign to let its customers know the added service is available. However, she could not provide additional details.

Stop & Shop operates its online shopping service in conjunction with Peapod, Skokie, Ill. Stop & Shop and Peapod are divisions of Ahold, USA, Chantilly, Va.

"This is a way to extend the current offerings we have with our stores and with Peapod," Weiner said. "It's just one more way to differentiate ourselves."

Featured items will include nonperishable grocery products, like specialty, ethnic and sugar-free foods, as well as local favorite and regional brands, Weiner said. She explained that Stop & Shop officials anticipate doing particularly well in the ethnic, specialty and baby item categories.

However, she said Stop & Shop officials are not making any projections on how much sales volume is anticipated from selling in this new channel.

In a prepared statement, Marc Smith, president and chief executive officer of Stop & Shop, said: "We are continuously exploring opportunities to use technology to enhance our customers' shopping experience and expand our one-stop-shopping service. Coupled with our great selection, this service will help our customers find everything they need and want."

"For those difficult or hard-to-find items, you don't have to go to other stores. It's a win for the retailers, a win for the manufacturers and a win for us," Kent added.

Kent said the new venture with Stop & Shop fits into Netgrocer's future as it prepares to change its name to neXpansion and start focusing more on joint ventures with other businesses.

Kent explained that items carried in the program typically don't provide the retailer with enough sales volume to be stocked regularly on the shelves, but nonetheless are desired items by some shoppers.

She pointed to items like sugar-free candy, kosher foods and even Kiwi-flavored Jello as examples of products that are expected to add incremental sales through the new program.

Tom Murphy, president, Peak Tech Consulting, Colorado Springs, Colo., said the "Endless Aisle" program offers a sound way for Stop & Shop to build incremental sales in a channel that will complement its already-existing online program with Peapod.

"If a chain looks at this application as part of an overall strategy and the service is good and the cost is low, it's an excellent solution," Murphy said.

However, Greg Buzek, president of IHL Consulting, Franklin, Tenn., said the new program could end up being a "tough sell" to Stop & Shop's customers.

"You are asking people to come to your store to buy things that are not in your store," Buzek said. "I think they may just go to the store down the street to do that, or just buy it online."