Pickup-only online grocer Fresh Street makes debut

In the wake of a flood of ultra-fast grocery delivery startups, fledgling online grocer Fresh Street is taking a different approach: pickup-only.

Chicago-based Fresh Street today launched its first click-and-collect location in the Windy City at 6191 N. Lincoln Ave. The e-grocery platform, available via mobile app (iOS and Android version) and online at freshstreet.com, currently offers customers 4,000 SKUs of food and nonfood items for free curbside pickup within 30 minutes of their order being placed.

“My family and I have experienced the frustrations and inconveniences that plague current online grocery options,” according to Mike Sayles (pictured left), CEO of Fresh Street. “We started Fresh Street by thinking through these problems with a blank sheet of paper and a focus on providing the best possible experience for the online grocery shopper.”

Fresh Street promises customers no substitutions because its platform reflects real-time inventory, since unlike supermarkets its facility has no shoppers plucking products off shelves. What’s more, the company said, customers will find “no hidden or extra fees,” making the service more affordably priced than local grocery competitors.

To use Fresh Street’s service, consumers open an account online or via the Fresh Street mobile and begin shopping. New customers get $10 off their first order of $20 or more. Shoppers also earn 1% cash back on every purchase as well as rewards that can be redeemed at checkout.

Related:February online grocery sales get lift from same-day services

Fresh Street said the “focused assortment” at its location in the West Rogers Park neighborhood of Chicago’s north side includes both national brands and local favorites. Product categories include fresh fruit and vegetables, meat, seafood, dairy and eggs, baked goods, dry groceries, frozen foodd, beverages and international foods. Nonfood offerings include personal and beauty care, baby care, household products, home and garden items and pet care.

Fresh Street said its 'focused assortment' allows customers to get the products they want and avoid making an in-person trip to the grocery store.

Sayles noted that Fresh Street’s selection, operating model and online platform allows customers to avoid making an in-person trip to the grocery store and get the products they want.

“This enables us to offer competitive prices, brands that families know and love, an easy-to-use website/app and a convenient pickup experience,” he commented.

Internal consumer research by Fresh Street found that more than 70% of shoppers plan to use some form of pickup service to meet their grocery needs, yet online grocery innovation has mainly focused on delivery, which predominantly addresses the roughly 30% of Americans who live in downtown areas.

Related:Online grocery shopping activity projected to climb

Indeed, strategic advisory firm Brick Meets Click found that pickup accounted for 40% of U.S. online grocery sales in February and 47% in January, compared with 37% and 35% respectively for delivery. Another study by sales and marketing specialist Acosta revealed that click-and-collect is the preferred service, as 20% of online grocery shoppers said they use pickup only versus 14% opting for delivery only.

Customers do their grocery shopping through the Fresh Street website or the company's mobile app.

Plans call for Fresh Street to zero in on larger families living outside urban centers served primarily by fast grocery delivery. Looking ahead, the company envisions opening more than 10 stores in the Chicago area and expanding to additional markets.

In October, Fresh Street reported that it raised $4 million in seed funding from private investors, with the money earmarked for upgrading the first facility in Chicago, building out the website and mobile apps, connecting with local consumers and assembling a best-in-class team, including staff from Google, Amazon, Aldi, Walmart, Kraft-Heinz and Uber. Before launching Fresh Street, Sayles spent over eight years at Ferrara Candy Co., most recently as chief customer officer.

“There is tremendous opportunity to optimize online grocery shopping for the millions of individuals who live outside downtown areas. Currently, these families are asked to sacrifice either time at a traditional retail store and/or money via fees, hidden upcharges and inefficiencies that plague grocery delivery. Our innovative solution will provide fast and affordable groceries for these families,” Sayles stated when Fresh Street announced its seed funding.

“We have the benefit of a blank sheet of paper and an opportunity to listen to what consumers want," he explained. "That means saving families time with our easy-to-navigate online shopping experience and a seamless pickup process. It also means providing affordability through transparent pricing, clear rewards, an optimized inventory management system, and efficient assortment model that minimizes out-of-stocks.”