Dive Brief:
- Wegmans Food Markets is piloting a prepared foods ordering app at its Pittsford, New York, flagship store, according to the Rochester Democrat and Chronicle. The app lets shoppers order pizza, sushi, soups and drinks, along with some customizable options like salad bar selections through its new Wegmans 2GO service. Shoppers can pick up orders at the store's prepared foods counter or from designated pickup spots in the store's parking lot.
- The service also offers home delivery, fulfilled by either Wegmans or Instacart employees. Customers have to order at least $20 to be eligible and pay a $10 fee.
- Wegmans 2GO is available only for iPhone, but the company plans to introduce an Android version early next year. Wegmans says it's also honing its menu as it goes along and has no timetable for expansion beyond the single location. "We want to get this right before opening it up to more customers," a company spokeswoman told the Democrat and Chronicle.
Dive Insight:
If any grocer can succeed with a standalone prepared foods app, it's Wegmans. The northeast chain has become a customer favorite in large part due to its expansive selection of fresh meals, from sushi to salad bars and pub-style dining.
Wegmans customers can already order prepared foods for home delivery, in addition to other groceries, through Instacart. That partnership formed a year ago, but it appears the grocer wants to break out its high-flying foodservice business in such a way that it competes with popular restaurant delivery services.
This is certainly understandable, since delivery apps like Seamless and DoorDash have caught fire in recent years. According to investment bank UBS, restaurant delivery is a $35 billion industry that could balloon to $365 billion by 2030. These services have been credited with elevating sales across the restaurant industry. However, Wegmans may struggle to sell customers on the delivery piece — which is how many users have become accustomed to getting their restaurant meals — since its fee is half the minimum order amount.
Fees for delivery services Uber Eats and GrubHub vary, but they're typically lower than Wegmans' $10 fee. Uber Eats just introduced a sliding-scale fee system based on distance, and The Verge estimates that customers close to a restaurant pay just a $2 fee.
The question is, do shoppers love Wegmans' prepared foods enough to pay that delivery fee, or to make a habit of swinging by the store for pickup? Those making large orders for game day will probably see it as a good value. Wegmans has also made pickup convenient thanks to its designated pickup area where customers can get orders shuttled straight to their waiting cars.
Wegmans says it's closely monitoring the app's performance and making changes to the menu as it goes along. The initiative is a savvy way to further set it apart from competitors and tap into a new growth channel, if it can gain broad appeal.
