MINNEAPOLIS — Cub Foods is starting its own online pickup and delivery service.
Up until now, Cub Foods had partnered with Instacart to handle online orders.
Now, they're taking it over for themselves to give the customers a better shopping experience.
You can fill your cart online, and if the order is over $50, the company says you can pick it up at the store for free.
For home delivery, it's a flat fee of $9.99
"The reason to bring it in house is to improve the quality of that service,” University of Minnesota marketing professor George John says.
That better quality service, however, comes with a cost.
Despite the fees delivery companies like Instacart charge, John says it's still cheaper than setting up your own online service, and hiring all those employees and drivers to handle the deliveries.
But doing it yourself does come with some benefits.
"It's more expensive, but hopefully it's paid off in the way of higher quality perceptions. That's why I think it's a good deal for consumers here, because I'm pretty well convinced they're doing it to offer a higher quality service because they're putting more money into it,” John says.
According to Cub Foods, the new delivery service will give online shoppers the same experience as in-store shoppers, the same coupons, promotions and rewards points.
John says that specialized service is the key here.
He says the company is hoping that going the extra mile will bring in more customers.
"I hope they're not doing it for the short run, because it's probably the worst time to launch anything new where you need workers. You need to train them. It makes sense if you’re going to be committed to it in the long hall. That’s the only way it makes sense,” John says.
Cub Foods seems to have part of that problem already figured out.
Instead of hiring their own drivers, the company is partnering with a local logistics company to drive the groceries to your house. But inside the store, it will be Cub Foods employees who fill the orders.
John says the home-delivery craze reached a peak in the middle of last year.
It's gone down quite a bit since then, however he believes home delivery is a service that will stick around long after the pandemic is over and seeing this move by Cub Foods tells him they agree and they want to get ahead of it.
“I think they're in it for the long run. Whether they can make a sense of it I think is another matter. It will be up to you and me as consumers,” John says.
John says another reason why Cub Foods might be making this big move now is because we're seeing a lot of inflation, a lot of household items are getting more expensive.
He says that's when consumers start to buy the cheaper in-store brands and Cub Foods has their own brand that they could market to customers through this new service and possibly bring in shoppers who are trying to save money.