SmartCentres is expanding its efforts to capture more online shopping dollars.
In 2014, the shopping centre developer/operator launched Penguin Pick-Up, a network of pick-up locations for online purchases from any retailer. Seven locations (all with a drive-up service) have opened in the Greater Toronto Area. To further evolve the service, in 2015 SmartCentres launched an online grocery service called Penguin Fresh, which delivers orders to Penguin Pick-Up locations.
Now, a new partnership with The UPS Store will allow Penguin Pick-Up to quickly go national. Shoppers will have the option to ship their online purchases to a Penguin Pick-Up service at UPS stores.
“Our properties are in suburban areas and obviously we would like to also have a network in urban areas,” said Egil Moller Nielsen, senior vice-president of ecommerce at SmartCentres. “The UPS Store is a great fit for us because they have stores in both downtown and mid-town locations, so it’s really complementary to our network.”
Currently, 26 UPS stores have the Penguin Pick-Up service, and some stores will be outfitted with freezers and coolers for grocery orders. Nielsen said the plan was to have 40 Penguin Pick-Up locations by the end of this year (including standalone units and UPS stores), and 100 nationwide next year.
Retail consultant Ed Strapagiel said the partnership with The UPS Store made a lot of sense for SmartCentres. “It allows Penguin Pick-Up to expand their locations very rapidly and in one fell swoop,” he said.
SmartCentres is also expanding its footprint in the food business with a partnership with Fresh City, a farm and online farmers’ market. Founded in 2011, Fresh City bills itself as Canada’s largest organic meal delivery company, and delivers produce, groceries, recipe kits, salad jars and smoothies to people in the Greater Toronto Area.
Customers who place their order online with Fresh City have the option of picking up their grocery bags at a Penguin Pick-Up location in the GTA.
“But Penguin Pick-Up is very much geared for food,” said Nielsen. “We spend a lot of energy and money to control the cold chain, we have coolers and freezers inside the Penguin Pick-Up and staff know how to deal with food.”
However, it will be tough to compete with one-stop grocery shopping offered by the likes of Walmart and Loblaw, which also have click-and-collect services. “[SmartCentres] would have to partner with various distributors like they’re doing in Ontario with Fresh City,” said Strapagiel. “There aren’t that many of those sorts of operations around, close to major urban centres, so that’s kind of tricky.”
On top of that, “groceries, especially fresh foods, are just about the lowest thing on the totem pole when it comes to online ordering,” said Strapagiel. “It’s a tough sell.”
