Dive Brief:
- Lidl will trial online delivery through online retailer Boxed at two stores — in Staten Island, New York and Powder Springs, Georgia, according to a news release. The pilot, which begins next month and last six months, will include the full assortment of Lidl products, including fresh produce, snacks and beverages.
- Customers that live around each store can visit Boxed.com to browse Lidl selections, select a two-hour window and get same-day delivery as soon as three hours after placing an order. Representatives from Lidl and Boxed declined to provide further details. Lidl also offers online delivery through Shipt from the majority of its 68 stores.
- Boxed Express, the e-tailer’s fresh foods delivery service, will handle fulfillment. This is the company’s first partnership with another retailer, and is part of a push to license its in-house technology to retailers.
Dive Insight:
When Lidl first came to the U.S., executives shrugged off online ordering, saying they preferred to focus on the chain's unique in-store experience. But as demand has grown and competitors like Aldi have scaled e-commerce, Lidl has decided to hop on board.
The chain first partnered with Shipt in 2017 to offer online ordering and delivery, and now offers it across its East Coast footprint. The tie-up with Boxed suggests Lidl is willing to further scale online ordering and test new services. Its Staten Island and Powder Springs stores are two recent additions, with the former opening last December and the latter in January.
"Lidl Home Delivery is currently offered through Shipt in a majority of our stores, and we are happy to continue to expand it into more markets with more partners to bring more shoppers convenient ways to experience Lidl’s award-winning products," Lidl spokesman William Harwood wrote in an email to Grocery Dive.
Boxed, meanwhile, aims to add service and technology providers to its core business selling goods in bulk. Like other retailers, most notably Kroger, Boxed is struggling with competitive and pricing pressures and had turned to alternative growth channels to improve its fortunes. The company, which started making deliveries in 2013, is not yet profitable.
Boxed has a suite of tools it hopes to eventually sell retailers on, including order management systems, mobile technology, software that monitors and lists product expiration dates and automated robots that wheel packages around warehouses. But it will be particularly interesting to see how its e-commerce service for retailers scales and evolves. Instacart and Shipt have been the main plug-in services for grocers looking to move online. As consumer demand grows and market leader Instacart struggles with labor woes, more providers are entering the space. Some offer end-to-end service while others are combining forces to tackle various steps in the process.
Having an effective ordering platform will be key. A news release noted customers order through Boxed.com, but it’s unclear if that means the retailer’s main site or a dedicated one it sets up for Lidl orders. Representatives from Lidl and Boxed declined to provide further information.
Last August, Boxed closed $110 million in new funding led by Japanese retailer Aeon Group. According to The New York Times, the deal valued the online retailer at $600 million. Boxed also reportedly turned down a $400 million acquisition bid from Kroger.
