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Whole Foods increases grocery-shopping convenience with 1-hour delivery

September 9, 2014

whole foods deliveryWhole Foods Market is making grocery shopping more convenient by allowing customers in 15 United States cities to use a mobile application to have groceries delivered to their door within an hour in a move into the growing mobile grocery-delivery space.

By ordering at or through San Francisco-based Instacart’s mobile app, Whole Foods customers select their ZIP code, add items to a virtual cart, choose delivery within one or two hours or at a scheduled time and then check out. The move highlights how while grocery-delivery services have been established abroad, the service has been slow to catch on in the United States.

“We’ve always been an innovator in our industry and have differentiated ourselves from the competition in-part by delivering unique shopping experiences,” said Mike Silverman, Whole Foods spokesman. “Our partnership with Instacart gives shoppers a new choice they want: a fast, extremely easy way to purchase our fresh, quality products online and have them quickly delivered to their doorstep or made available for pick-up in select stores.”

Testing in-store pickup
Whole Foods grocery deliveries will be made in Atlanta, Austin, Boston, Boulder, Chicago, Denver, Houston, Los Angeles, New York, Philadelphia, Portland, OR, San Francisco, San Jose, Seattle and Washington. Customers will receive the first delivery free. Afterwards, a one-hour delivery will cost $5.99 and a two-hour delivery $3.99. Customers can also purchase a $99 annual Instacart Express membership and receive free delivery on any order over $35.

An option to allow consumers to order groceries and pick them up in-store will be tested at select Austin and Boston stores in the next month. In the months ahead, the in-store pickup option is expected to be made available to all 15 Whole Foods delivery cities.

Instacart offers a platform that leverages a network of citizen shoppers/drivers who pick groceries from participating retailers and deliver them to consumers on demand. Its service will include a Whole Foods recipe database that automatically generates lists of ingredients needed for selected dishes.

To entice shoppers to try the mobile service, Whole Foods is offering shoppers a chance to win free groceries for one year. Customers will receive hidden game pieces in Instacart delivery bags beginning Sept. 12, with five chances to win.

Online grocery has been slow to take off in the U.S. although it is becoming well established in other markets such as Britain, France and the Netherlands. A major reason for the slow adoption has been the cost of establishing ecommerce operations for fresh groceries, particularly when deliveries over large distances are involved.

Retailers are seen as needing to reach a critical mass of shoppers to be able to offer the service at a level that makes it affordable for customers. Establishing operations in densely populated urban areas is seen as the key.

Among major U.S. grocery chains, Safeway also has experimented with mobile and online ordering.

Amazon has made strides in the online grocery space through quick deliveries and an easy-to-use mobile application and site but its delivery service has been limited to Los Angeles, San Francisco and Seattle.

Whole Foods' delivery app: company enters a relatively open space.

Whole Foods’ delivery app: company enters a relatively open space.

Amazon has an edge by having a sizable group of consumers who already rely and trust the company’s ecommerce services. Nevertheless, Amazon’s estimated market share of the online grocery space was less than one percent at the end of last year, according to a report from IBISWorld. Users of Amazon’s grocery service pay $299 for a subscription.

In August, Uber, the mobile application that allows users to order and pay for taxi service via smartphone, launched a test in its headquarters market of Washington of a service called Corner Store that allows users to order from a menu of products that includes toiletries, gifts and office supplies.

Google Shopping Express expanded to Los Angeles and New York after its debut in San Francisco and the Silicon Valley area last year.

Digital roadmap
Whole Foods is Instacart’s most requested shopping destination, proving its customers want the convenience of delivery and pickup services, Mr. Silverman said.

“Our partnership with Instacart is an important step forward on our digital roadmap,” Mr. Silverman said. “We’re committed to meeting our shoppers where they are, and that means having a strong mobile strategy. “We’re also developing a robust mobile app to dramatically improve our customer’s digital and mobile experience before, during and after visiting our stores.”

Final Take
Michael Barris is staff reporter on Mobile Commerce Daily, New York.

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