Peapod vs. FreshDirect: The Battle Between Grocery Delivery Services

Are you tired of waiting in long check-out lines or navigating crowded aisles at the grocery store? If only there was a better way to get such shopping done. There is thanks to Peapod and FreshDirect, two online subscription-based grocery companies.  

They are doing to groceries what Netflix did to movies. Their services have streamlined the grocery shoppin experience, now making it as easy as adding items to a digital cart. Both companies have shared similar success, but the question remains: in the battle of Peapod vs Fresh Direct, who offers the best service?  

How They Got Started? 

Before addressing their differences, let’s first see how FreshDirect and Peapod got started in this novel market. Based out of Skokie, Illinois, Peapod was first founded in 1989 by brothers Andrew and Thomas Parkinson.  

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Their first website, which went live in 1996, was one of the earliest internet start-ups. Since then, the brothers have established many lucrative partnerships with Kroger, Safeway, and Randall’s. Later in 2012, they launched their first mobile app that allows users to shop for groceries on their favorite tablets and smartphones.  

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FreshDirect didn’t hit the online grocery shopping scene until 10 years later in New York. Its co-founders are former Fairway Market CEO Joe Fedele and Jason Ackerman. Their success story can be attributed to three things: convenience, competitive prices, and fresh food.  

The road to success for FreshDirect hasn’t been without obstacles, though. In 2008, they had to fire their CEO and change their marketing strategy due to customer service snags. Additionally, the company has had its fair share of unionization problems. There were even talks of collusion between workers and the company, in hopes of staying protected from more aggressive unions.  Customer service is key to an enjoyable online grocery market experience.

By the Numbers 

On paper, these two grocery shopping titans have grown tremendously in the past couple of years. Peapod has been so successful that according to Harry Balzer, Chief Food Industry Analyst, the company could easily go head-to-head with Amazon and Walmart.   

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This year, Peapod received recognition for being one of the oldest and most popular online grocery services in the market. It’s clear their recipe for success is working as they’ve firmly established a recognizable brand. In a world full of copycats, this is paramount for their continued success.  

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For FreshDirect, they reached over 250,000 customers and achieved $400 million in annual sales in 2013. Much of this growth can be attributed to their shift in marketing and change in leadership. As they continued to grow, the company decided to expand its service areas to the greater Philadelphia metropolitan area and parts of Delaware.  

Site Navigation & Aesthetics 

Now that you know the story behind both companies, let’s dive further into the type of website experience they offer. First up is Peapod. At first glance, the vibrant green color scheme takes over. It catches your attention and so does the crisp, bold lettering. Both the font and featured products are easily legible.  

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Where the website really shines is with its ‘browse aisles’ tab. Everything included in this section is organized into unique categorizes that enhance the user experience. For example, consumers can search products by clicking on Weekly Fresh PicksClearanceMeal Solutions, or the Organic section. These tabs facilitate the shopping experience so that consumers find exactly what they’re looking for.  

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Now let’s examine FreshDirect’s website. The color scheme, compared to Peapod’s website, is a little muted. It does share a similar green color scheme with plenty of open white space. This clutter-free design makes the website easy to browse through. Additionally, there are plenty of organized tabs that expedite the search process.  

Signup and Checkout Process 

Peapod offers an interactive platform that’s easy to use. As long as you place your order before 8pm, the delivery will be scheduled for the next day. Unfortunately, they do not offer same-day delivery. You can also customize the delivery date and time in case you’re out of town or at work. After selecting items and making an order, tracking is available with real-time updates. You can also review any order to make sure the quantity and pricing are correct.  

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In terms of payment, Peapod requires credit card information. After that, though, you can pay by credit card or check. With the checking account withdrawal option, there is an added incentive of $5 off your first order and $1 off of each additional order.  

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FreshDirect’s activation process is very similar. Users are required to create an account and enter their payment information. From there, they can browse items and add them to their cart. Shopping lists can be saved and revisited at any time.  

Delivery Process 

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You’ve imagined getting groceries without ever leaving the house, but which service is truly superior. If you order through Peapod, a refrigerated truck shows up to your door with plastic bags holding groceries. They are organized prior to delivery, so that you don’t have to wonder where specific items are. The bags can be carried directly to your kitchen, at which time the driver will have you sign an invoice.  

The delivery process for FreshDirect is similar, only the groceries are transported in divided cardboard boxes. A lot of users prefer this method because their groceries are better protected.   

With both services, you can adjust your cart until the designated cut-off time for delivery. This lets you easily make last-minute changes or cancel your order entirely. Where these two companies drastically differ is how they accept coupons. Peapod will take coupons at delivery, where FreshDirect typically requires you to enter a code online. Consumers have had mixed results with this option, often getting error messages and unresponsive pages.  

Both services charge a delivery fee. For Peapod, the delivery fee is scaled; as you spend more on groceries, the delivery fee lessens. FreshDirect charges a flat delivery fee depending on your location and also applies a minimum order amount for certain spots. Like Peapod, Fresh Direct does not have a same-day delivery option. At this time, it is near impossible to find a food delivery market that offers same-day delivery, so this isn't a deciding factor in choosing Peapod vs Fresh Direct as your online grocery market. The same applies to free delivery; you will be hard-pressed to find grocery delivery services that offer free delivery without a coupon or special offer.

Clear-Cut Competitive Advantages  

Both grocery services have stand-out features that have helped them outlast their competition. For example, you may be looking for fresh, green products. FreshDirect is the perfect company for these types of goods, as they have established connections with local farms. This short supply chain for online grocery delivery ensures customers get the freshest foods delivered directly to their door.  

According to their testimonials, their food is so fresh that it lasts up to 7 more days in the fridge compared to food bought from a traditional grocery store. This is practically unheard of for food delivery from online grocers! Other benefits this company offers their customers include: 

  • Hand-Picked Weekly Deals 
  • Effective Packaging 
  • Experienced Chefs 
  • Customer Satisfaction Guarantee 

Peapod markets their products as fresh, priced fairly, and easy to find. They also pride themselves on offering customers friendly and reliable customer service, two attributes that have helped them retain loyal customers for decades. Their chief shining point, though, is their innovative tools that facilitate planning and shopping for meals.  

For example, there is a section on the front page that lets you browse different meal kits. All of the ingredients in the meal kits are included, and you’re told how many people each kit serves. In-depth instructions are also provided so that an unfamiliar recipe is cooked to perfection. When you subscribe to Peapod, you’re also treated to: 

  • Passionate Employees 
  • Satisfaction Guarantee 
  • Effortless Shopping Experience 
  • Competitive Online Prices 

And the Winner Is… 

There can only be one winner in this battle of online grocery supremacy. Although it was a closely contested affair, Peapod is the undisputed winner. In a sector that is quickly being filled by retail giants like Walmart and e-commerce giant Amazon, experience goes a long way.  

As mentioned earlier, Peapod holds the position of being one of the oldest online grocery market services in the world. Since they have been around for so long, they’ve had ample time to sort through customer service complaints and website malfunctions. The end product is a streamlined service that always delivers fresh items in a timely manner.  

Peapod significantly edges FreshDirect in website functionality and graphics as well. Their site is more attractive and brings you in from the start, where FreshDirect’s site is not as flashy nor as well organized. Peapod even has an Express Shop, a feature that recommends common household items for a quicker shopping experience. It may not have the same effect as an instacart or instacart express, but in a matter of minutes, you’ll have completed your grocery list from the comforts of home.  

Lastly, consumers seem to save more money when they use Peapod. Those who sign up to Peapod’s mailing list are rewarded for their loyalty with coupons and weekly deals. You also save $50 on your first two orders, in addition to free delivery for sixty days.  

Even though FreshDirect came up short, one feature that deserves an honorable mention is their Office Delivery package. Often times, employees are up to their necks in paperwork and daily tasks, making it hard to eat a healthy meal without heading to the grocery market. With this office vending program, however, every employee has access to low-cost meal options that let them live a healthier lifestyle. This program also benefits a company’s bottom end, as employees stay in and eat and therefore are more productive.  

Other Benefits to Online Grocery Shopping

For some, making the trip to brick and mortar stores like Trader Joe's is a positive experience that will always trump any food delivery market option.  By setting your delivery window when purchasing online food, you are saving time, money in gas, and other environmental impacts (for example, you save paper that is otherwise used for lists and receipts). You can find whatever you need using an online grocery business, whether that be non-perishable items or prime fresh produce.

Online grocery shopping ensures you always have healthy food available, so you aren't tempted to call Papa John's multiple times per week. Short of having a personal shopper, online grocery shopping is the closest to hands-off grocery shopping that you will ever get. We've already created an e-commerce market for so many consumer goods. Next-day delivery of prime fresh foods and other consumer goods will someday be widely preferred over in-store shopping.

There will always be those who prefer to shop in person for groceries. But for the many who like avoiding crowded areas and long lines, online grocery store options serve a great need. Even though Peapod slightly outranked FreshDirect, they both provide customers with fresh food in a convenient manner. Shopping for groceries has never been easier thanks to their commitment. For that, online shoppers worldwide are rejoicing. 


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