The Peapod app opens a store of thousands of grocery items, not just the products shown on the poster.
The posters are, in effect, simply ads for the Skokie, Ill.-based Peapod, which arrived in the Philadelphia area only last fall.
Competition for the Philadelphia grocery dollar is keen. Acme has 16.8 percent of the market, followed by ShopRite (15.5 percent) and Giant (12.3 percent), according to Janney Capital Markets.
"As Giant is getting bigger, it makes sense they'd want to get more aggressive in places along the R5 [Doylestown line] where they aren't presently but will be soon - after the Genuardi reflags," said Jonathan Feeney, Philadelphia-based managing director of Janney.
"Philadelphia has in the past three years become one of the favorite, if not the favorite major market nationally for new grocery offerings," Feeney said.
He cites Target, opening its food-focused PFresh stores, as well as the growth of Wegmans, Bottom Dollar, and Save A Lot.
Many retailers, even behemoth Wal-Mart, are experimenting with grocery delivery.
"It's an extension of an incredible trend," Feeney said.
For this campaign, which is expected to be expanded to four other cities, Peapod partnered with New York-based Titan, which buys transit advertising from SEPTA.
"A virtual grocery store was something we were eager to get involved in," said Jeff Randazzo, Titan's general manager. The campaign is believed to be the first of its kind in the United States; a similar project, in South Korea, was branded a success.
The posters - called "two-sheets" in outdoor-advertising parlance - each cost $500 to $600 for four weeks, said Randazzo. Peapod, which erects two posters at each location, got buy-ins from grocery giants Procter & Gamble, Coke, and Bimbo Bakeries to defray the costs. Peapod also advertises the service on smaller posters in train cars. The stations are not in Center City because of availability, Randazzo said.
After the program's first month, Peapod's Brennan said he was encouraged by the response. "We're seeing some lift in the products" shown, he said. Peapod cannot determine specifically if people were ordering groceries at train stations or somewhere else because the bar codes on the signs are the same as bar codes on the products, he said. Delivery charges are about $8, and prices seem to be a few cents higher than in most stores.
Brennan said the convenience was worth the cost.
"For busy people like me, this sounds like a good idea," said Joann Needleman of Upper Gwynedd, a lawyer who checked out the sign on her way to catch a train at Fort Washington. "We do our shopping on Saturdays, and it's the last thing I want to do."
But Tracy Maleeff, a librarian at a law firm, was not sold on online food shopping. "I enjoy the supermarket experience - the tactile feeling," she said. "I can't imagine someone picking out my produce for me." She also does not own a smartphone capable of downloading the app.
Online ordering was slow to catch on when it was introduced in the 1990s. But the rise of the iPhone and its apps has pumped its fortunes especially in metropolitan areas. Nielsen estimated last year that consumers spent $12 billion on online groceries in 2010. It forecasts $25 billion by 2014.
Online grocery sales grew 11.6 percent from 2010 to 2011, compared with 2.5 percent growth for in-store sales, according to MyWebGrocer.
Nielsen also says online consumers spend more on the average purchase for food and beverages online than in retail stores ($80 online vs. $30 in stores) and tend to buy more higher-profit health and beauty products.
Contact Michael Klein
at mklein@philly.com.
