The price of convenience: A Fred Meyer experiment

Special Reports

PORTLAND, Ore. (KOIN) — Gone are the days of being limited to just one method of grocery shopping: today, you can order everything you need online and even have it delivered to your door. 

But how much more does convenience cost? 

KOIN 6 News anchor Dan Tilkin wanted to find out. He recently spent a day ordering groceries from Fred Meyer using the store’s online service and an independent delivery service partnered with Fred Meyer called “Instacart.” He also visited the aisles himself to shop the old fashioned way. 

For the sake of accurate price comparison, the same 27 items were purchased using each of the different methods and all of the transactions were made at the same store on the same day. 

KOIN 6 News anchor Dan Tilkin shops at Fred Meyer in Portland's Hollywood district, April 10, 2019. (KOIN)

Pickup

Fred Meyer “Pickup” (formerly called “ClickList”) is advertised as an ordering service that lets customers shop for all of their products online and pick them up at their leisure without ever needing to get out of their cars. 

According to the Fred Meyer website, customers who choose to use Pickup are asked to reserve a time slot, which they can do up to 3 days in advance. A time slot gives people a one-hour window to arrive and pick everything up. The service typically runs from 7 a.m. to 9 p.m. every day. 

Pickup orders are paid for using a credit or debit card. Government benefits are not currently accepted. Fred Meyer said it waives the service fee for Pickup for the first 3 uses. 

Darin Baker, Fred Meyer’s e-commerce manager, said the store offers the online service because more people than ever are shopping online. 

“I think it’s important that we line up with what the customer wants and the customer wants the convenience of it so they’re using us,” said Baker. 

Baker also said while the online shopping experience may eliminate some of the impulse buying, if they don’t offer it, people would go elsewhere. 

“I would tell you as a user myself, we get plenty of impulse shopping as it were,” he said. “Items that are on sale that are in your purchase history, we’ll present those to you, make sure that you know what those deals are.”

He added that despite what people may think, customers young and old use the online service. 

Melissa Camarillo told KOIN 6 News she frequently uses the Pickup website and hasn’t had any problems with the store getting her particular requests right.

“I like my bananas to be a little green when I buy them so I’ll put those instructions in and they read the instructions and they’ll pick bananas that are a little green for me,” she said. 

Camarillo said she puts her order in for Pickup the night before she wants to get her groceries. 

“I show up — I’m gone in like 5, maybe 7 minutes.” 

Shopping for groceries through Fred Meyer's online Pickup service, April 10, 2019. (KOIN) 

Instacart 

Instacart is a delivery service that serves multiple cities across the United States, including Portland. It advertises same-day delivery on groceries from various stores like Safeway, Costco, Natural Grocers, Whole Foods and Fred Meyer.  According to an Instacart spokesperson, the service “is currently accessible to more than 80% of U.S. households, and in all 50 states, and more than 60% of Canadian households.”

Instacart’s website offers free delivery for a person’s first order from Fred Meyer

Delivery starts at $3.99 plus a fixed 5% service fee for all orders over $35. Instacart also offers an Express membership – customers get free delivery on all orders over $35 for a $99 annual fee.

Baker said Fred Meyer chose to use a third-party service to carry out deliveries to avoid building out the infrastructure themselves. 

“It’s more financially responsible and faster to market to make a partnership,” he said. 

Prices

At the checkout line at Fred Meyer, the total bill for shopping the old-fashioned way was $110.22. A 12-pack of Kind bars was not on the shelves, so Tilkin substituted three 4-packs of the flavor he wanted at a slightly higher price.

Baker wasn’t sure why the product offered online wasn’t on the shelf. But when something like this does happen, he said a Pickup order will be filled with a substitute that’s as close to the requested product as possible. 

The bill for Pickup was slightly less at $107.26 because the personal shoppers made the same substitution for the Kind bars with the online price for the 12-pack. 

The typical service charge of $4.95 was waived as part of a promotion. 

Instacart charged a grand total of $132.08. The groceries cost $110.34, the delivery fee was $3.99, the driver was tipped $11.03 and the company charged a service fee of $5.52.

The 12-pack of Kind bars in the flavor Tilkin wanted were not offered through Instacart.  He purchased a different flavor at the same price.

In the end, the price of convenience through Instacart was greater than shopping in person and using Fred Meyer’s online service. It’s important to note that we saved $3 both in-store and through Pickup with a “Mega Event Promotion” that was not offered through the Instacart order. 

Baker believes the future of grocery shopping and the various services and companies that offer alternative shopping methods will hinge on how to get products to customers in as little time as possible. But he also said that the customer’s wants and needs will continue to shape the industry.  

“The game is always going to be how can you shorten the length of time between when somebody wants it and when you can deliver it.” 

Copyright 2019 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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