Peapod sold groceries online in 1989, years before most people had heard of the internet

When Andrew and Thomas Parkinson started Peapod in 1989, most people had not even heard of the internet. Their bet was that a computer user would rather order groceries from home than push a cart — so they sold modems and software that connected customers to a supermarket's stock and delivered the order.

Peapod ran through partner stores like Jewel rather than building its own, which kept the early model cheap. It expanded into Texas, California and Ohio during the internet bubble, then retreated; while Webvan sank hundreds of millions into rapid expansion and collapsed, Peapod was picked up by Ahold in 2001.

By 2003 Peapod served five markets, grew 25 percent a year, counted 130,000 customers, and lifted average orders to $143 by using Ahold's shopping-card data. It operated through Ahold's chains — Peapod by Stop & Shop in the East and Peapod by Giant in Washington — with Chicago as its standalone home market.

Keep the supermarket; digitize the ordering

Partner stores supplied inventory, so Peapod needed no stores

It built a decade of brand awareness before e-commerce went mainstream

Conservative expansion left it solvent when Webvan failed

Ahold's chains provided fulfillment and customers at scale

Pioneer with assets you don't have to build: renting the existing supermarket instead of building warehouses kept Peapod alive through the bust that killed Webvan.

Ahold ran Peapod through its East Coast supermarket chains for nearly two decades, making it one of the longest-lived U.S. online grocers; its store-based fulfillment model became the standard shape of online grocery.