It’s a good thing that I hadn’t realized how much money FreshDirect was losing in recent years, because it probably would have given me a heart attack for fear that the online grocer would go out of business.
Last week, the gang at You’re the Boss, the Times blog on small business, told the story in the paper and online of how FreshDirect was churning through customers and hemorrhaging money. Today, the blog posts Part 2, telling how the company tried to fix its problems (and plans to expand into most major cities).
My wife and I have been using Fresh Direct for most of our grocery shopping ever since it started delivering to our neighborhood in Park Slope, Brooklyn. Here are seven reasons for our loyalty — and some thoughts about how FreshDirect could be even better.
1. The Time Value of Money
FreshDirect is actually radically underpriced. Forget the item-by-item comparisons, which can be difficult to make given that one or another store is always peddling loss leaders or running specials of some sort.
Instead, I like to think about the value of my time. There is no grocery store with FreshDirect’s level of quality and depth of inventory within walking distance. We have a car, but to go to the Fairway in Red Hook, the nearest store with a comparable selection and similar quality, requires a 15-minute drive each way and an hour at least navigating the labyrinth there. Figure another 15 minutes more for the load-in from the garage in our apartment building back home, plus fetching and putting back the building’s grocery cart, and you’re looking at nearly two hours each week.
Those two hours cut sharply into family time, even as I’m already mentally adding up the hours I spend with my daughter and trying to figure out how to eke out a few more each week. Taking her to Fairway is fun once in a while, but it slows the shopping way down, and I’d much rather do something else with her for those two hours each week.
So FreshDirect allows me to, in effect, buy back personal time. And while everyone calculates the value of personal time differently, I would gladly pay at least 25 percent more than bricks-and-mortar prices to keep from having to go to the supermarket.
2. The Service Is Not That Bad
You heard a lot about broken eggs and missing items during FreshDirect’s early years. It did happen, though it doesn’t happen as much anymore.
But when I think about this in the context of the 24-ounce container of curry from Costco that I splattered all over our garage not too long ago, I’m inclined to cut FreshDirect some slack. And when I am shopping in person, I forget things with far more often, on a percentage basis, than FreshDirect leaves items out of my delivery boxes.
3. The Food Is Pretty Good
Chowhounds around town made a lot of noise early on about not being able to pick their own produce by hand when shopping at FreshDirect. But we’ve never gotten anything rotten or bruised at our house, and FreshDirect’s new star system is helpful in knowing what to avoid in any given week.
Quantity is often more of an issue in the produce department; there have been a few times where buying by, say, the lettuce head or the green onion bunch has led to getting smaller quantities than we’d hoped.
Meats and fish at FreshDirect are much better than most New York City supermarkets and often on par, I’ve found, with what we could get at Fairway or Whole Foods. For a nice dinner party, we’ll still make a lap of Brownstone Brooklyn to hit Staubitz for meat and Fish Tales and the wine store and the farmers’ market. But for day to day needs, FreshDirect is perfectly fine.
4. Only at FreshDirect
We’ve been really impressed by the quality of some of the four-minute microwave meals that FreshDirect offers through partnerships with local chefs. We’re partial to the Rosa Mexicano line and pretty much anything in the Tabla line of Indian foods, especially the Chickpea Masala. (I’d link to all of this, but the site often makes you log in first before seeing items on the virtual shelves.)
5. The “Every Time List”
It’s a joy, frankly, to be able to return to FreshDirect each week and click one button to reorder everything we got last week or use our “Every Time List” to restock.
The weekly ordering chores, which my wife handles most of the time, rarely take more than 10 minutes.
6. The Hours Are Amazing
First off, it’s great to be able to start an order at the office, add to it later at night once you’ve double-checked what’s in the pantry and finish it off at 6 in the morning before anyone wakes up.
But what we really appreciate is that FreshDirect’s delivery staff will show up to bring the groceries between 6:30 and 8 a.m., before we need to make lunches for the day, or between 10 and 11:30 p.m., so we can catch them after we’ve been out for the evening. And unlike Time Warner Cable, FreshDirect employees actually show up when they say they’re going to. Sometimes, they even show up early (but only after calling first for permission).
For a household with two working parents who both travel, all of this flexibility and dependability is terrific. Indeed, it’s those early-morning slots that seem to be most popular.
7. A Decent Loyalty Program
There’s no plastic club card at FreshDirect, but its Chef’s Table program allows you to reserve those coveted early morning slots permanently. Also, the company offers exclusive Chef’s Table discounts, though of course I wish they were even more generous than the 15 percent off that seems to be the norm.
Also, I wish the company would partner with Upromise, which would help direct a few dollars each week into our college savings account. Plenty of other grocers (with lower price points, I might add) have done this.
***
All that said, FreshDirect has plenty of room to improve. Every so often, I run across something pretty obvious or mainstream that it doesn’t stock. When you send a product suggestion off into the ether, the company never replies. Which is odd, since its reps are very quick to write back and credit your account when an item is missing or broken.
Also, the selection of local products — whether it’s produce, meat or fish — could be so much better. I’ve often wondered why the company doesn’t just buy a few farms and keep the bounty for its customers. We recently signed up with a produce delivery service called Basis to supplement FreshDirect’s meager offerings.
Still, if FreshDirect disappeared, my quality of life would certainly fall. Because of the company, my family and I have two extra hours each week that we would not otherwise have.
And frankly, I’m worried sick about FreshDirect’s expansion and what it might do to the financial health of the company and the progress it has made in New York City.
When you take venture capital money, you grow on the investors’ terms, come what may. I know that. But I sure wish it could be good enough for FreshDirect to aim to be a great New York City grocer and then leave it at that.