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Internet Grocery Shopping Slowly Gaining Ground 283

Posted by michael
from the three-bags-of-cheetos dept.
bakreule writes "Online grocery shopping, once the laughing stock of the internet, has quietly started gaining ground. It seemed that the idea had been killed shortly after the bust as being just another bomb. The article has some good interviews and details to show how this industry is developing and whether or not this surprising growth can continue. I'm interested in seeing how grocery product advertising will be affected in this highly competitive industry."
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Internet Grocery Shopping Slowly Gaining Ground

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  • Online food (Score:5, Funny)

    by NIK282000 (737852) on Friday May 21, 2004 @09:30AM (#9214245) Homepage Journal
    I've seen far too many of those "grocery gateway" trucks driving around. The way this is going geeks will never need to leave the house.
    • Re:Online food (Score:3, Insightful)

      by acceber (777067)
      The way this is going geeks will never need to leave the house.

      And it's the perfect formula for obesity. Food delivered to your door without having to move? At least going out to do the shopping burned a couple of calories.

      • Re:Online food (Score:2, Insightful)

        Why does this have to be geeks. Can it be a regular joe wanting food delivered to the front door?

        From my understanding not all geeks are fat. In fact geeks most make stick figures look fat.

      • Re:Online food (Score:3, Interesting)

        by Glonoinha (587375)
        Why does the grocery store have to be the one filling the order, doing the delivery, or hosting the web site?

        Here's a thought : affix a known order charge to the service, let people freeform their order or make a check list for them of known things with relatively known prices, when the order comes in print it out, drive to the grocery store, fill the basket, pay for it yourself, charge their credit card in the van on the way over (including the $10 or $15 or a % of the total) and drive them to their house
        • Re:Online food (Score:3, Insightful)

          by nolife (233813)
          I know your $10-15 mentioned was only an example but grocery shopping for very specific items is a lot of work. You are talking at least two hours from starting with the cart until you are at their house, add the time to process orders, get back to the grocery store blah blah. If the grocery store manages the process, they can supply the car painted with their advertisments, push other products and services, use existing employees to load up the carts etc.. Imagine a third party delivering pizza hut pizz
          • Re:Online food (Score:3, Interesting)

            by Glonoinha (587375)
            For you or I, or someone walking around doing impulse buying, it is a 2 hour affair. For an ex-employee of the grocery store that is intimately familiar with the product placement of everything in the store, buying a list of specific items would run somewhere between 1 and 4 different items a minute, no time increase for multiples of the same item. Creating the shopping lists such that they were coordinated with the layout of the store would speed this up.

            If they had the flexibility of a 4 to 6 hour deli
      • Re:Online food (Score:4, Interesting)

        by jskiff (746548) on Friday May 21, 2004 @12:01PM (#9216152) Homepage
        Ironically, I ate much healthier when HomeGrocer.com was still in business. Since I rarely had time to go to a grocery store, I used to always eat fast food or quick instant/boxed meals. When I was getting groceries delivered, I found myself eating more fruits and vegatables, since their quality was always pretty good.

        I for one would really be pleased if grocery delivery took off again.
    • I miss WebVan (Score:5, Insightful)

      by AKAImBatman (238306) <akaimbatman@gmai[ ]om ['l.c' in gap]> on Friday May 21, 2004 @10:00AM (#9214545) Homepage Journal
      When WebVan was around, they were *extremely* popular. So popular, that everyone would wave at the delivery guy as he drove by. I myself was an extremely happy customer as it saved me from having to carry a lot of groceries home. (I didn't have a car at the time.)

      I think that WebVan's problem had less to do with a poor business model, and everything to do with scaling the business way too fast. They burned through a tremendous amount of cash every time they entered a new market. As a result, they were left with very little operating funds. They always figured that they'd be able to get more funding. Unfortunately, you can always count on VC investors to go to extremes. They over funded during the boom, and they simply wouldn't fund at all during the bust.

      • Re:I miss WebVan (Score:3, Informative)

        by CRB2500 (43221)
        What killed WebVan was this: They spent big bucks to "upgrade" to a fully automated system (more robots less people) WITHOUT doing at test study to see if they would actually save time/money. Come to find out the systen they had bought (maybe some other system would have worked but they were dumb for not testing it) was less efficient than the more human based system they already had. Opps! All that money to just slow down production. That sort of system is hard to recoup the costs. Not many people out ther
        • Re:I miss WebVan (Score:4, Interesting)

          by Snowdog668 (227784) on Friday May 21, 2004 @11:37AM (#9215828) Homepage
          That sort of reminds me of a problem we had back when I worked at the big M making cellphones. The plant I worked in built the transceiver for bag phones (yes, this was quite some time ago). A position that I worked for about a year was to drive seven screws that held the circuit board into the chassis. Someone figured that they could save money by buying a big honking robot to put at the position that would have seven torque-drivers and do all seven screws at the same time. They installed the 'bots on two lines with two 'bots each without ever testing the concept. On paper it looked good. In real life it never really worked. On a good day the things scrapped about 25% of the boards that went through. It was a "dumb" bot that just drove the screws, no matter if it wasn't lined up properly. Their fix to that was to have a person standing next to the machine to make sure that everything was lined up before the board went in. Then they found that boards were failing because three screws had to be screwed down first to make sure that a certian piece of the board was flush. Their fix to that was to have the person checking the boards screw in the first three screws and then let the 'bot do the other four. Eventually it was found that a person with any time at that position could do the job in a third of the time it took the machine. Eventually the machines were disconnected but they were never taken out until that line was scrapped to make room for a new production line.

          I had a point when I started this message. Somthing about testing before putting something into a production environment. :)

    • Re:Online food (Score:4, Insightful)

      by I am Kobayashi (707740) on Friday May 21, 2004 @10:20AM (#9214751)
      I live in Chicago, and it is a pain to lug groceries around the city and then up the elevators to my apartment. The 10 dollar fee or whatever peapod charges is HIGHLY worth it.

      Plus the arguments about not leaving the house or obesity are just erroneous. Groceries are healthier than ordering pizza (which is a possibility in pretty much any urban/suburban setting), and for those of us with busy lifestyles, getting your groceries in a two-hour window on a Saturday or Sunday morning while you having your morning coffee and catching up on the news or whatever isn't exactly precluding you from going outdoors :P

  • by Scumbag Tracker (650383) on Friday May 21, 2004 @09:31AM (#9214250)
    I always wondered how these places stay in business. Do you really think the vendor's actually put a lot of thought into finding the perfect tomatoes, freshest eggs and milk, and softest loaves of bread?

    Or do they sell whatever the oldest crap they can get away with selling?

    Personally, unless I'm buying books or CD's, I'll stick to real-life visits to the local grocery store. ;-)
    • by phoenixTMW (106271) on Friday May 21, 2004 @09:36AM (#9214304)
      The thing is, these places WANT to keep your business. Selling you the oldest crap they can get away with selling doesn't work so well for customer retention.
      • by sckeener (137243) on Friday May 21, 2004 @09:54AM (#9214484)
        Selling you the oldest crap they can get away with selling doesn't work so well for customer retention.

        that's pretty much straight out of the article (so RTFA)

        When I was using online groceries, they used restaurant quality produce. After restaurants get their pick, they go to groceries, so picking produce at the local grocery is picking the restaurant rejects!

        If you want fresh groceries that you pick, you are going to have to go to a road side produce mart.
    • Hopefully they have an economic incentive to not sell you crap. If they do, just don't use the service again. They gotta keep the customer happy.
    • The second one... the 'oldest crap' option. :-P

      Yeah, there is just something to be said about buying PERISHABLES of a mundane nature online... I can see something a little more 'gourmet' that is much more difficult to get normally, like foie gras, Kobe beef, or fresh morels. You normally won't be able to find stuff like under most normal circumstances. I just can't seem to justify to myself to pay 20-30% markup for something I can just get myself at the store just down the road. ...

      well, unless gas pri
    • you apparently don't shop where I do... Cub Foods in Minnesota is *the* worst grocery store chain behind their "rival" Rainbow.

      The isles are narrow (and people here like to stand in the middle and look while making it impossible for you to pass, "excuse me" doesn't seem to register).

      The brand selections are weak. Wegman's on the East Coast (PA, NY, others) is fantastic for selection. The vegetable isle is terrible. I swear that Cub thinks that fresh produce means stuff that looks like it is wilting.

      T
    • Getting a bad tomato is not my concern when it comes to online grocery shopping. I'm sure I'll get fine produce if they want to keep me as a customer and being a geek I really dont buy that much produce anyway (my food comes in frozen boxes).

      I'm mainly concerned about not getting exactly what you want. I remember trying an online grocery ordering system at Farm Fresh where you could order online and pickup at the store. I thought I would give it a try until I found that that if the store is out of brand
      • So long as they were up front about it I don't see as this would be a concern. And, by upfront, I mean as soon as they can possibly alert you to the fact that they may not be able to fill an order, you should know.

        If they quietly make a substitution or omision, on the other hand, that would probably turn me off of them, as well.

    • I always wondered how these places stay in business. Do you really think the vendor's actually put a lot of thought into finding the perfect tomatoes, freshest eggs and milk, and softest loaves of bread?

      The biggest costs are probbably the warehouses, trucks, and employees to deliver the stuff. Cutting corners on quality of the product is only going to give you a terrible reputation and lose customers.

      The market for this kind of business is people without cars, or people with more money than time to sho
    • by woodhouse (625329) on Friday May 21, 2004 @10:04AM (#9214585) Homepage
      Online grocery shopping is already well-established in the UK. I've actually been using Tesco online for groceries for the past 3 years or so, and in my experience, yes, they do pick out good quality stuff. My only complaint is that they do occasionally screw up and deliver the wrong thing, but they've always given a full refund when that has happened. They're very keen for people to use their service, so they put a lot of effort into these issues.

      Tesco charge 5 for deliveries (~$8), which works out pretty well IMO if you're doing a big shop. My only gripe is they don't put the stuff away for you (You need a maid/wife for that, and I hear they're expensive)
    • I always wondered how these places stay in business. Do you really think the vendor's actually put a lot of thought into finding the perfect tomatoes, freshest eggs and milk, and softest loaves of bread?

      Shrug. I honestly don't have a problem with it. I use Internet grocery shopping. I've never had a bad delivery; the veges and fruit are just fine. You just put your credit card into the site once a week and they deliver within a 2 hour window after work. Sure beats pushing a trolley around a store for

  • FreshDirect (Score:5, Interesting)

    by turnstyle (588788) on Friday May 21, 2004 @09:32AM (#9214256) Homepage
    Some people, when looking for a new apartment here in NYC will ask: "does FreshDirect [freshdirect.com] deliver here".
  • Interesting (Score:5, Interesting)

    by RazzleFrog (537054) on Friday May 21, 2004 @09:32AM (#9214263)
    I live outside of a major city but too far to get this right now but even when I lived in the city my biggest problem with the idea was stuff like produce. I love cooking and I am very picky about my fruit and veggies and cuts of meat. According to the article, however, this seems to also be a big concern of the companies. They even claim that they would do a better job. I would have to see that.

    I actually enjoy grocery shopping sometimes (ok call me a freak) but I would to pull up a recipe and have the ingredients delivered.
    • Re:Interesting (Score:3, Interesting)

      by sckeener (137243)
      When I was using online groceries, they used restaurant quality produce. After restaurants get their pick, they go to groceries, so picking produce at the local grocery is picking the restaurant rejects!

      If you want fresh groceries that you pick, you are going to have to go to a road side produce mart.
      • If you want fresh groceries that you pick, you are going to have to go to a road side produce mart.

        Or a garden. There is NO replacement for a nice fresh garden tomato.
    • by jred (111898)
      Speaking as someone who has picked up cabbage when I was told to get lettuce, I can state with 99% certainty that they can pick better produce than me. Hell, my 8yo daughter can pick better produce than me.

  • Do it at night. (Score:5, Insightful)

    by corporate_ai (775461) on Friday May 21, 2004 @09:33AM (#9214274)
    While this trend may catch on in ultra-urban settings like NYC (where even McDonalds delivers), I can't see it making its way to mainstream America.

    For one thing, who wants to pay for delivery? Second, my biggest gripe with grocery shopping was the crowds, which is why I love 24 hour grocery stores... I simply go at midnight.

    • Schwan's (Score:4, Interesting)

      by FunkyRat (36011) * <funkyrat.gmail@com> on Friday May 21, 2004 @09:44AM (#9214394) Journal
      I don't know about mainstream America, but here in rural upstate NY, food delivery certainly has caught on. It seems like every other house gets delivery from Schwan's. The reason for this I think is that there are no grocery stores within 15 miles. It can be damn convenient to have that Schwan's truck stop by every other week.

      Now, the problem I have with this service is that the food (not counting the very high priced steaks, etc.) is, to my mind, almost totally snack food. Some of it very good snack food (ummm... Tacquitos) but snack food just the same. A steady diet of this stuff and you're probably not going to be doing yourself any good.

      Also, of course, only a couple of (frozen, of course) vegetable and fruit items.
    • Re:Do it at night. (Score:3, Insightful)

      by OECD (639690)

      For one thing, who wants to pay for delivery?

      You do, if you ever sent out for pizza. (Unless you're a cheap no-tipping bastard.)

      Second, my biggest gripe with grocery shopping was the crowds, which is why I love 24 hour grocery stores... I simply go at midnight.

      Gee, pay someone a little extra to bring my food to me, or wait 'til MIDNIGHT to go shopping? Tough choice.

      Now, if only I could get them to put the groceries away for me I'd be all set.

    • Re:Do it at night. (Score:2, Insightful)

      by Zilquis (633850)
      Trouble with going at midnight is that none of the fresh stuff has been restocked - fruit, vegetables, bread, etc. Also the meat counter, cheese counter, fish counter, deli are closed.
    • Re:Do it at night. (Score:3, Insightful)

      by TopShelf (92521)
      As a father of three little kids (2, 2, and 1) grocery delivery would be a great option. Simply put, it's hard for some people to set aside the time or effort to shop at the grocery, whether due to time demands, physical limitations, etc.

      I think part of why so many of these services flopped in the late 90's was that they invested heavily in top-notch infrastructure, and couldn't stretch out their cash long enough to grow into their debt load (as Amazon appears to be doing).
    • If your view of mainstream America includes suburbs in the midwest, I'd say it's catching like wildfire. I don't have any hard stats (of course), but several younger families I know in greater metro Minneapolis/St. Paul have been signed up for this for several years. A couple of IRC pals in Aurora and other suburbs in Chicago swear by it. I'd love to use it, but they don't deliver to friggin apartments. But, in my neighborhood I don't blame 'em. Other than the risk of having them stolen, I'd hate to open up

    • for one thing, who wants to pay for delivery?

      It costs something to drive to the local supermarket. The way petroleum is going up in price, this may well be a cheaper way to go in the long run. (n.b. the delivery service can use electric vehicles and/or can preplan their route to go past each customer once and hence minimise the total distance).

    • (initial admission that I didn't RTFA)
      Here in the exurbs of Minneapolis, most of the local grocery stores offer online ordering and frankly we use it a lot. It's a flat $10 delivery fee, which is WELL worth the money when you consider the time you save driving to the store, pushing a cart around, and driving home again, especially amortized against a $300 grocery bill. We can save $10 just in a little judicious coupon use.

      Whether this is a short-lived experiment, or the last-gasp of local groceries tryin
      • Re:Do it at night. (Score:3, Insightful)

        by Some Woman (250267) *
        It's a flat $10 delivery fee, which is WELL worth the money when you consider the time you save driving to the store, pushing a cart around...

        I would probably save more than $10 on impulse buys alone. I'm sure you spend less if you have to actually think about what you're putting in your cart, especially if you have little kids.
  • by Mz6 (741941) *
    It shouldn't be anytime before they are able to deliver or hire 3rd party delivery drivers and have them delivered right to your door, all in the same day.
  • Otherwise, you are relying on someone else to select meat and produce for you.

    • What's the problem with that? I work in a butcher shop in a grocery store, and a lot of people will ask us to pick out their meat for them. They'll tell us what they want, we'll walk them out to the case, and pick out the appropriate piece for them. You don't seem to realize that most people don't know what a good piece of meat, or a good fruit/vegetable looks/feels like, and they want their stuff picked out for them.

      Not to mention the lack of taste in most canned goods.
  • by Enlarge Your Penis (781779) on Friday May 21, 2004 @09:35AM (#9214293)
    I, and I'de estimate 90% of the people on my street, already rely on Tesco's and Sainsbury's online grocery ordering. IMO the greatest benefit is not having to put up with screaming kids whose parent's post school shopping coincides with my post work free time.
    • by dcordeiro (703625) on Friday May 21, 2004 @09:55AM (#9214501)
      my kids don't [stop that!!!] usually [DON'T GO AWAY] give me any problem [be carefull with that JAR !!!] or to anyone who is around [don't drop that jelly thing in my keyboard!].
      It's always a [DIDN'T I already said STOP IT ?] pleasure to take them with me. fkjaj giaj agij adfgi 1234567890 [ Don't f*#$ touch my laptop]
    • by mccalli (323026) on Friday May 21, 2004 @10:24AM (#9214798) Homepage
      ...and I use online ordering precisely to avoid the hassle you're describing.OI have a two and a half-year old daughter and a seven month old son, and it is a living hell to take them round.

      First off, they fall asleep on the way there. Marvellous. So now you have to wake them up before you can get out of the car - that really cheers them up, as you can imagine.

      Next up, the trolley has to be perfection. Yesterday's favourite is today's screaming fit, so you must make sure Her Majesty will deign to actually sit in the bloody thing (the son currently gets no say...). You can force the issue, but your ears will suffer.

      You then get the fun of said two year old reaching out to every shelf and grabbing what she wants. If you put it back, she grabs it again or screams. Meanwhile my son is just screaming anyway - no apparent reason, unless it's the same one I feel like screaming about as well.

      Finally, we get people such as yourself. We know we're pissing you off. We just don't get a choice about it. Some people respond graciously, others stare as if you're utter scum.

      Nope, it's online shopping from the parents' point of view too as far as I'm concerned. Chuck 'em a fiver, and let the delivery people handle it all. It's a good deal for both me and you, it would seem.

      Cheers,
      Ian

      • by Suidae (162977) on Friday May 21, 2004 @11:00AM (#9215276)
        As a parent of 5 I understand what you are talking about, and I can also say that you really ought to train that bratty behaviour outta yer kid. No offense, but bad behaviour from a kid is usually not the kids fault.

        It is amusing to me to see the different reactions people have to a bratty kid though. People at Wal-mart either just ignore you or are sympathetic. Now, try that at the local hippy foods store, Whole Foods or Wild Oats or whatever. People stare and roll their eyes like you have horns sprouting from your forehead.
    • And that five quid for delivery? You get it back by not being tempted to pick stuff up that you hadn't planned on.
  • by bobej1977 (580278) * <rejamisonNO@SPAMyahoo.com> on Friday May 21, 2004 @09:35AM (#9214295) Homepage Journal
    Wow, I hadn't realized this was a "laughing stock", I thought this was just mismanagement by the start-ups. I LOVED this service. It is one of the primary things I miss since moving from the Bay. I still have 5 of those plastic crates they deliver stuff in (which are great for storage BTW).

    I loved the searchable selection, the ability to pre-build shopping lists, and coolest of all was the one-click recipe ingredient ordering. I especially miss not waiting in line during the 5:30p grocery rush.

    I live in a smaller town now (100,000) so I'm not holding my breath until I can get access to this again, but I'd be quite willing to pay 10% more to have this service.

  • by Anonymous Coward on Friday May 21, 2004 @09:37AM (#9214322)
    I think most people who are surprised that these companies can stay in business and who don't see the appeal of the service are overlooking those people (a lot of students) who don't have cars. I used Grocery Gateway often as a student because it meant I could buy more food than I would be able to stuff in my backpack to carry home.
    • by pklong (323451)
      Yes, excellant point. Of course this could also include the elderly if they could get over their technophobia and love of the free supermarket bus (if it goes their way.)

      The other solution used by many students is to go together and get a taxi back. If the distance is short enough ( and it usually is ) the cost is not too high, and it will certainly beat the cost of running a car.
    • Grocery Gateway is fantastic. Great customer service. They seem to be genuinely concerned that their customers get what they want.

      My wife stays at at home with our son, and she doesn't drive. With all the coupons and such, it usually costs her $4 (Canadian) per delivery. Their time is worth more than that, and they can spend it at the playground instead of at the crocery store.

  • by LilMikey (615759) on Friday May 21, 2004 @09:38AM (#9214324) Homepage
    As to the submitter's question about online grocery marketing, I don't think it will change too much. I for one go to the aisle of what I want to buy and look for the little yellow sale tags... then buy that one. I don't think website shopping and flashy ads will change that so much and at 10$ per delivery, I don't think you're going to have a lot of hunt and peck shoppers getting their 69 cent soup from one grocer and their 3$ microwave pizzas from another.

    Not to mention at 10$ per delivery people like me who spend maybe $40 a trip on the high end will be willing to spend another 25% for delivery. That's where competition needs to happen. Drive those delivery costs below $5 and I can eliminate my single social burden!
  • by Xilman (191715) on Friday May 21, 2004 @09:38AM (#9214326) Homepage Journal
    It appears that the US is catching up at last.

    Here in the UK, the Tesco [tesco.com] and Waitrose [waitrose.com] supermarket chains have been taking orders over the net and delivering the goods by truck for several years. It's no longer remarked upon as being anything special.

    Tesco were the first to realise that using their regular staff picking goods off the shelves of their regular supermarkets was a low-investment and very cost-effective way of linking orders to delivery trucks.

    Paul

    • Don't forget Sainsburys and Iceland, as well as some smaller outfits. Asda [Walmart] are very slowly also re-implementing store-based internet shopping, after their disastrous start with the big-warehouse model several years ago.

      We currently use Tesco's but would probably switch if the Asda store in our area was up and running.
    • Here in the UK, the Tesco and Waitrose supermarket chains have been taking orders over the net and delivering the goods by truck for several years. It's no longer remarked upon as being anything special.

      Its nothing new on this side of the pond either. We used a pre-Web/pre-internet online grocery delivery service back in around 1992 (the online component was a BBS dial-up connection which let you enter your order via a TTY terminal app).

      Tesco were the first to realise that using their regular staff p
      • Labour cost must be saved elsewhere because item prices are the same.

        If you have your exact list and know the store really well, it probably doesn't take a lot longer to pick the goods off shelves than to sit at a checkout and check them all through. Delivery usually is charged for.

        Overall, they make a sizable profit on the operation, and have done for some time, see eg. here [theregister.co.uk].
  • by REBloomfield (550182) on Friday May 21, 2004 @09:38AM (#9214331)
    And what really, really annoys me, is the 'selective alternatives'. They haven't got a pack of 4 chicken wings, so they give me 2 turkeys. Hey, it's got four wings... okay, I'm exaggerating slightly, but when you can't miss noodling round the store with a trolley buying what you want.... it might be okay for the convenience, but you can't beat real shopping.
    • by malf-uk (456583)
      Never had any problems with regard to this when shopping with tesco.com.

      They allow to you specify whether you want an alternative item or not. If you do you then have a choice of specifying the alternative item yourself or leave it to the discretion of the picker (the latter option isn't particularly risky if you choose this for basic items such as sugar or toilet paper)
  • "In America" (Score:5, Interesting)

    by Vanders (110092) on Friday May 21, 2004 @09:39AM (#9214341) Homepage
    I think you mean "In America, Internet Grocery Shopping.." because certainly here in the U.K, it's pretty big business. My wife and I have been using Tescos once a week for two and a half years with no problems. Tesco and several other large stores who provide online-ordering and delivery are also turning a tidy profit in addition to their regular brick & mortar stores.
  • personal services (Score:3, Insightful)

    by whovian (107062) on Friday May 21, 2004 @09:41AM (#9214373)
    So the economy keeps going in the direction of personal services, it seems.

    This is sure to save time...fill out grocery list at work, submit it, the voila! Groceries arrive within a few hours of being home. And it might even limit impulse buying.
  • Schwans (Score:5, Interesting)

    by SpiceWare (3438) on Friday May 21, 2004 @09:43AM (#9214383)
    Schwans [schwans.com] delivers frozen foods. I've been using them ever since GroceryWorks went under and have been very pleased with their product quality.

    One thing I really like is my food arrives frozen. The nearest grocery store to where I live is 10-15 minutes away and frozen foods tend to defrost a bit by the time I get home due to the hot Texas sun. Melted/refrozen ice cream from the grocery store isn't very good.
  • by glawrie (663927) * on Friday May 21, 2004 @09:44AM (#9214389)

    Although the CNN article focuses on the US experience, the UK has had successful and profitable online grocery shopping for several years. UK chain Tesco [tesco.com] was one of the first - with an in-house developed software system - and now most of the UK major chains have followed suit with similar systems.

    The Tesco system was initially thought to be un-economic as it simply comprised staff going round existing stores and loading carts that where then delivered using small vans to homes in the locality - but apparently its been profitable since the outset.

    Tesco's approach is compared to that of WebVan (who feature in the CNN article) in this document [upenn.edu] written by a Prof at Wharton (free - but registration required)

    More recently, a WebVan style UK Grocery operation called Occado [ocado.com] has started too - working with upmarket Grocer Waitrose [waitrose.com]. Their approach is to use central warehouses to fill orders and distribute.

    All this competition has resulted in competition between providers both on price (several offer the service 'free' for spends over a threshold of about 75) and quality (for example, discounts if delivery times are missed, or the goods / brands you order are not in stock etc.)

    • A quick question for you - when do they deliver? I'm out in the sticks, so I haven't got a Tesco or a Sainsburys, but we've got an Iceland that does online shopping.

      I'd be glad to use even Iceland's online service for bulky or heavy stuff (they do beer, toilet roll & wine, for example!) but they deliver during the day, which is no good to those of us with an all-working household. They've also got an absurdly long delivery window - something like between 11am and 4pm, so even if you were at home, you'd
  • the food is far more fresh than anything you would find in a grocery store. it goes right from teh warehouse to your door without the middle man. i guess it depends on the service. fresh direct in manhattan is actually one of the best websites i have used ever.
  • In certain major cities, supermarkets rely on foot traffic. They depend on getting the business from everybody close around them regardless of their quality, because they were the closest.

    I can describe the two local supermarkets in my major city within "quick" walking distance as
    • Outrageously expensive (Hint: suburban readers, double or triple what you usually pay)
    • Terrible quality

    What do I mean by "terrible?" How about dirty, nasty, not stocking certain common items for days or weeks, bugs, whatever. An

  • by 4of12 (97621) on Friday May 21, 2004 @09:48AM (#9214429) Homepage Journal

    From the article:


    The key struggle for grocers is to make their service convenient enough and the cost low enough -- most charge less than $10 for delivery -- to change decades of shopping habits. Online grocers also need to operate in cities with high population densities and heavy Internet use.

    Delivery costs are probably what most limits this kind of service.

    If delivery costs could be reduced, say by taking the human (driving a two ton gas guzzler 10 miles each way) out of the loop, then this service would really take off.

    The technology is almost here for cost-effective robotic delivery vehicles. With liquid fuel costs increasing dramatically, automated delivery will be here even sooner.

    There should be less and less reason to send someone in car on a Go Fetch Errand to pickup groceries, a new hard disk, etc.

    • There are some creative ways of reducing delivery costs. A few years ago when my company was shopping for a new WMS (Warehouse Management System), we visited an online grocer down in Dallas. Their ordering system would match up shoppers with existing orders for that day that were close by, and would offer a discount for selecting the same delivery time slot as the pre-existing order, thus saving both parties the cost of an extra trip by a delivery truck.

      It was an impressive facility, with top-quality foo
  • I used to use shoplink.com back in 2000 or so. I loved it - the food was great, came on time, and I saved money, both on the groceries themselves, and on a distinct lack of 'impulse shopping'. Unfortuneately, they went under a few years ago, and I now live in an area that noone services.

    I've seen people in this thread saying to 'keep it to canned goods' etc. Let me tell you - the meats I got were great, along with fresh veggies and fruits, etc. It was a great service.
  • by jedrek (79264) on Friday May 21, 2004 @09:50AM (#9214449) Homepage
    I live on a 5th floor walk up in Warsaw, Poland, without any really good shopping places in my immediate vicinity. So every couple of weeks, I'd take the bus to a large supermarket, buy stuff for 2-3 weeks and take a cab home. Now, I save both time and money just by putting orders through a local grocery store.

    For fresh produce, meat and fish, I still go to the local market. But for name branded goods with freshness seals, it's online shopping all the way. Last weekend I ordered just beverages - 60l of juices, water and pop. That's about 70kg of weight (counting bottles + packaging), so I was more than happy to not have to carry it up.

    There are some things I will never buy online - fruit, veggies, meat (they don't sell them anyway) - but for the other stuff, it's a great solution.
  • by |<amikaze (155975) * on Friday May 21, 2004 @09:52AM (#9214465)
    http://www.e-zgrocer.com/

    This service has been around for a few years. We're in a very sparsely populated area (35k people in my town). When it first started, we mocked it, saying that it would never work around here. Then we realized that it was still around, and aparently gets good use.

    I think their secret is that it wasn't some kind of VC startup, but rather a grocer that decided to go online.
  • I love it. (Score:5, Interesting)

    by Dman33 (110217) on Friday May 21, 2004 @09:55AM (#9214508)
    I use FreshDirect [freshdirect.com] in New York and it rocks. The produce is generally better than if I picked it out at the store. Things are fresher, and I can get a better selection of brands. Oh, and including delivery charge, ($3) it ranges 8 - 10% less than the ghetto-style grocery store at my corner! No lines, no cramped aisles, no moody checkout clerks, no overcharging...

    The delivery times are really good and it is next-day service. I will never go back to regular shopping again. This is like when I got my Tivo; completely revolutionizes everyday tasks.
  • by six11 (579) <johnsogg.cmu@edu> on Friday May 21, 2004 @09:56AM (#9214515) Homepage
    Wouldn't it be cool if you could go to the online grocery web page and
    * type in your own recipe, or
    * pick from an easy-to-use list of recipies
    * how many people will be involved w/each meal

    ...and it gives you not only the list of ingredients and how much of each you will need, but also a map in the store to optimize your time?

    You could do this from home, or from a computer kiosk at the grocery store itself. I always forget an ingredient, or spend too much time wandering around the store looking for a hard-to-find item.

    Now THIS would be a useful application of technology to a very low-tech thing. (Remember, spray on usability is bad [daringfireball.net])

    Most lowtech/hightech fusions that have gone down in publicly hilarious fireballs are due to the gross MISapplication of technology. Simply using a web page to pick out individual ingredients (separate from what the meal of which they are just a component) is just taking the existing paradigm and putting it on a web page. Won't work.
    • You can do that already in the UK, from Sainsbury's at least.

      Just go to their online shopping page, hit 'recipes and ideas' and you are presented with "Healthy Eating", "Main Courses", "Midweek Meals", "Spring Recipes" and "Top Offers". Each link takes you to a page with about 10-20 dishes on, and clicking on a dish gives calories, cost, how many people it serves, ingredients and instructions. If you want to buy it you just click 'Add to basket' and it adds the appropriate quantities of each ingredient.
  • by perly-king-69 (580000) on Friday May 21, 2004 @10:01AM (#9214559)
    All of the major chain stores in the UK do this. Asda [asda.com], Tesco [tesco.com], Sainsburys [sainsbury.co.uk], Waitrose [waitrose.com].

    You specify a delivery slot (depending on the company this can be in one- or three-hour increments) place your order and wait.

    They're delivered from the local store in small vans with refrigeration units. If something is out of stock they'll deliver a replacement item. Anything you don't want (ordered too much milk? pears overripe?) you can send back with the driver and the amount is deducted from your bill.

    Tends to work very well.

  • My experience (Score:3, Interesting)

    by khendron (225184) on Friday May 21, 2004 @10:04AM (#9214583) Homepage
    My experience with Internet Grocery Shopping was less than successful. I tried using an local grocery store that offered an Internet online shopping service.

    On the plus side, their site was well designed and easy to use. The prices were good. You could even choose to pick up the groceries yourself to avoid paying the delivery charge.

    One the negative side:

    (1) The service was unreliable. Many times, as I unpacked my order, I discovered missing products. They were charged on the bill, but nowhere in my delivery. The hassle involved in correcting this problem ("We'll deliver it to you, are you going to be home for the next little while? No... ummmmm") was not worth it.

    (2) The selection was not complete. Often, especially with fresh herbs, the store would be "out of stock". This would force me to go elsewhere to make my order complete.

    (3) They staff had a "couldn't care less" attitude. More than once I arrived to pick up my order to find it sitting by the front window in the full sun, with the meat browning and the herbs shrivilling nicely.

    In the end, my wife and I found that it took just as much time to do the shopping ourselves as it did to do it online. So why bother?
  • by saddino (183491) on Friday May 21, 2004 @10:05AM (#9214592)
    I've been using Peapod [peapod.com] in DC since 1999 and I can't imagine ever going back to a supermarket.

    My conversion was simple: my wife and I lived in an apartment and a typical shopping trip was capped off by parking in the basement garage and lugging countless bags (esp. those filled with cans) up a flight of steps, waiting for an elevator, walking to our door fumbling for keys, and then heading all the way back down for one or two more trips.

    When we moved into our house, I figured the need for Peapod might diminish, but if anything we use it even more. We still an organic foods market for fresh vegetables, but for staples -- especially ordering cans in bulk for the pantry -- nothing beats paying just a little more for someone to deliver it to your door.

    Now if only someone could resurrect Kozmo [disobey.com]! Ordering fresh bagels and milk on Saturday morning and having it delivered 30 minutes later -- and returning your DVDs rented the night before in kind -- amazing...
    • Uh... I'm sorry, but...

      I spent half my life living on the 11th floor. Never have I carried groceries in the way you said. It's always the same plan:

      Pull up.
      Unpack everything.
      Carry it next to the elevator. (multiple trips if needed)
      Pack it all in.
      Take the elevator up.
      Hold the door and unpack.

      • No need to apologize, you obviously haven't lived in the building I lived in. ;-)

        No way to "pull up" -- no parking in front, and spaces are in the 2nd basement, one flight of steps below the basement proper. I suppose we could have left the bags in front of the elevator and made multiple trips at the basement level. But, the basement level was kind of nasty...
  • by bshroyer (21524) <bretNO@SPAMbretshroyer.org> on Friday May 21, 2004 @10:06AM (#9214603)
    Here in the Twin Cities (Minneapolis/St. Paul Minnesota) we have one internet grocer, SimonDelivers [simondelivers.com] competing in a particularly tight grocery market. Here's my findings after a year of internet groceries:
    (We're a family of five, including three kids age 5. 5. and 4.)
    • Cost: on a per item basis, significantly higher. I estimate that we spend 5% more, on average, per item than if we were shopping brick and mortar. We'd be spending even more if we weren't watching for sale items - it still pays off to "stock up" on pantry items when they go on sale.
    • True cost on a weekly basis, significantly lower. Purchasing from my desk at work or at home in the office, I only buy what we need. We don't buy junk food any more. We get really good produce, with little wasted, as we tend to buy less each week. (I don't know why this is... It's as though you feel pressured to buy more in the brick and mortar grocery store. Is it because of the effective visual marketing, or because of the desire to eliminate a return trip next week? I hope I never find out.) Traditional grocery shopping used to be 3x per month, at $185 per trip. (Thanks for the stats, Quicken.) Simon Delivers is 1x per week (every Thursday night) for $80. Meet the $80 minimum, and delivery is only $5.00. We usually have to buy a few canned goods to get it up to $80. Where did all that extra money go? We used to buy junk food. And we used to throw out a lot of produce. Now, our refrigerator looks bare, but there's always enough quality food in there for the week.
    • Time no brainer here. We spend about 1/10th the time grocery shopping that we used to. After a couple of months, everything you're ever going to order, you've already ordered. It's on your "favorites" list. Just browse down your favorites list, noticing items on sale for stock-ups, and click to add to the shopping cart. Literally, ten minutes later, you're done.
    • Delivery Simon Delivers brings the groceries out in big totes, with both refrigerated and freezer versions. They'll leave the delivery if we're not home. Cold/Frozen foods stay that way for about six hours in those totes. The following week, they pick up last week's totes. Couldn't be easier.


    I can't imagine going back to traditional grocery shopping. I've seen the light - and I'd gladly pay an additional 10% to keep buying my groceries online.
  • by alphax45 (675119) <kyle.alfred@gmai ... m minus language> on Friday May 21, 2004 @10:07AM (#9214608)
    My g/f is visually impaired and has many friends that are visually impaired and blind. Because they cannot drive it is often hard for them to get all the groceries they need. Services like this are really helping that segment of the population. They all love it and think it's one of the greatest things ever. It is truely amazing how much you learn (as a fully sighted person) when you interact with people that do not have the luxuary of full sight. Services like these are just another thing that makes their lives much eaiser. I hope they stay around for that fact alone.
  • Grocery Gateway (Score:4, Interesting)

    by Inexile2002 (540368) * on Friday May 21, 2004 @10:09AM (#9214622) Homepage Journal
    One of the big outfits for online groceries in Canada is Grocery Gateway [grocerygateway.com]. At my last job I worked with them for a couple of weeks (mostly looking at some of their IT systems - they run a tight ship and have good IT people if that matters) and got a good understanding of their business from the inside.

    Essentially, they started out as, and still are, a shipping company. They don't just ship groceries, but pretty much anything that you would normally think to pack into a truck and ferry off somewhere. They partnered up with some grocery supply companies and basically inserted themselves as a delivery company and website. They don't really charge much for delivery, but they don't have to to stay profitable. Bulk buy directly from the wholesalers and distributers, mark up items so they're competitive with the grocery stores and charge a nominal fee for delivery and bang, you've made money.

    As for the quality of the foods, they partner up with Sobey's for much of it, and the produce is about the same quality as what you'd get off the shelf in a good Sobey's. (For non Canadians, or people who don't live near a Sobey's - Sobey's is a grocery store that can definitely boast well above average quality produce.) I'm not a shill for these guys, and I don't work with them any more, but I can say that the quality isn't bad at all.

    One of the other things I've done is try out Green Earth Organics [greenearthorganics.com] and Fresh Piks. (No link because their site is down. Fun fact: When it couldn't find the server, M$'s built in auto search suggested www.Fleshpics.com as an alternative. Not the best suggestion when looking for an organic fruit and veggie delivery company. Probably a fun site though.) Both provided better produce than anything I ever bought in a grocery store, it was delivered and since I didn't want to waste anything I ate more fruits and veggies, and cooked more than I ever did at any other point in my life. If I weren't living in Spain now (where restaurants prominently feature recognizable animal parts where they cut the meat from and many don't serve salads at all) I'd still be getting a weekly delivery from these guys.

    Someone has to pick stuff out and ship it to the store, why the hell not have someone pick it out and ship it directly to me. They know that if they drop the ball on quality I'll take my business elsewhere so they do better than the grocery store does. Anyway... I think that this is something that was a long time coming...
  • I tried out some of these services when there was little or no delivery charge, but I still couldn't make it make sense.

    The problem was the 4-5 hour delivery window. The main attraction of such a service is for busy people to save time. I realized pretty quickly that I could just get off my ass and go get my grocieries in that time--no waiting around.

    Now I'm sure many people have easily schedulable chores/work at home etc., but as a young guy I don't have 4 hours when I want to chain myself to my house ea
  • For the elderly (Score:5, Interesting)

    by MonkeyDluffy (577002) on Friday May 21, 2004 @10:11AM (#9214644)
    It's really tough for many elderly people to go grocery shopping - some are too old to drive a car safely, many grocery stores don't have powered carts so you have to walk the store, and the bags are heavy. Unfortunately, there are no online grocers where my parents live (both are in their mid 80s, and have the above problems). I was worried that the concept was going to die when Peapod and (I think it was called) Homerun ran into problems. But it sounds like it's catching on.

    -MDL
  • When our little one was born in 2000, we found that NetGrocer [netgrocer.com] had a much better selection of packaging options for the baby formula we had selected than our local grocery stores. We bought quite a bit from them.
  • The biggest complaint I'm reading is "who wants to pay for delivery?" Well, me, for one. The charge is $7, but otherwise the food isn't much more expensive (some more, some less).

    Is it worth it? You bet. I hate grocery stores -- they are usually jam-packed with rude assholes, and even a modest shopping list will take an hour from your day. I'd happily pay $7 to avoid that frustration-filled hour of my life.
  • The justification I always give for using FreshDirect is that I can go online and buy 5 boxes of Twinkies without the accusing glares I would get in the grocery store when I dump a shelf-full into my shopping cart.

  • e-mart is probably the best as they are restaurant quality (a restaurant stockist that sells to anyone) so they have great meats, frozen, and non-parishables. Not a large selection though. Site doesn't reflect stock well and things you can put in your cart may be not in stock and vice versa. This is the only one not backed by a regular store chain.

    The NTUC (gov't ran trade coop) Fairprice borg of small low selection stores has an online site for non-parishables. The thing was a .net partnership with the

  • I've used them (Score:2, Interesting)

    by Gnaythan1 (214245)
    About two years ago, when it was Homegrocer.com, I used them at least ten times, buying enough food to feed a family of three healthy eaters for two weeks at a stretch.

    The produce and meat cuts were better, consistently that what I could find myself in any of the four local stores close to my Kirkland Washington apartment.

    My wife loves to cook, but had some health issues at the time so she couldn't stand or walk for more than a two to three minute stretch. According to her... I truly suck at finding a goo
  • I mean, it'd be an awfully big vending machine, but if they automated the process and had certain items pushed onto a conveyer belt, automatically packed up into a bag, and put into a refrigerated delivery truck, this could be fast and efficient, plus you can probably sell the stuff at near wholesale prices rather than relying on frantic shoppers pulling stuff off shelves at a mile a minute.

    Also, this would be a good way to hire more of the packaging engineers in this country, to figure out how to transpor
  • No surprise, really (Score:4, Informative)

    by jht (5006) on Friday May 21, 2004 @10:35AM (#9214917) Homepage Journal
    The problem was never whether there was a viable business model in the idea of delivering groceries to homes. The problem was that it's a low-margin business, and it doesn't lend itself to the massive "economy of scale" theory behind most of the dot-com era companies.

    Think about it for a second. Chances are that there's more than one grocery store in your town. Here, in my town of about 40,000 people, we have two Stop & Shop stores (both on the borders), a Shaw's, a Market Basket, both Wal-Mart and Target (selling a decent amount of groceries), and a smaller local store run by a guy who has four stores in the area. Plus a number of smaller specialty and convenience markets, and a couple more supermarkets right outside town - including a Trader Joe's.

    My point is that all these stores have enormoous fixed costs. It's expensive to run a grocery store - for personnel you have deli staff, bakers, cashiers, baggers, management, stockers, butchers, etc. Depending on the store size, that's 10-30 people per shift. You also have high real estate costs, because your store needs to be in a nice, desirable shopping area, high advertising costs (though manufacturer co-op dollars help), and perishable merchandise that has to be disposed of if it doesn't sell. Not to mention high electrical costs, lots of water consumed, and high trash costs.

    Now, take the same or better merchandise, stock it in a warehouse that's much cheaper to maintain, and pay delivery drivers instead of cashiers and baggers. You save on some of the fixed costs but make up some of that on the electronic infrastructure.

    Altogether, it's a potentially viable business model that can work at least as well as the brick & mortar version. The catch is that the giant brick & mortar chains didn't spring fully formed from a venture capital infusion. They grew over time to become the giants - generally with one or two stores that did well enough to fuel expansion over a generation. Try and build big from the start, and you've got big costs. You don't have time to wait for the customers to find you. Start small, service a few markets well, and you won't run out of cash before the shoppers come. That kind of growth isn't good enough for either the VC market or Wall Street.

    But it's good enough to build a company if done right.
  • Peapod (Score:4, Informative)

    by Heem (448667) on Friday May 21, 2004 @10:37AM (#9214946) Homepage Journal
    I've been using peapod [peapod.com], which is stop and shop's online service. I can say nothing but good things about them. The biggest benefit is that we save alot of money and time. My wife and I used to go on sunday afternoon to the grocery store, and just basically impulse buy what we thought would be enough food for the week. We'd end up with far to many cookies and ice creams and not enough healthy food. Peapod has helped us alot with this since we can just log in anytime we think of something we need or have run out of, and then save the cart until next time. We typically start making the order right after we recieve previous order, and will add items for the next couple of weeks (I find it easier to order 2 weeks of groceries at a time). Delivery fee is only about 5 dollars if you order over $100 worth of groceries. They also remember all your previous orders so you can look back and see what you ordered last month or last year, and you can copy/paste a text list into their search program to speed up searching for items. It's really a great program, and I reccomend you try it at least once if it is available in your area. And now for the shameless plug, if you do sign up as a new customer based on my positive thoughts: my account is peapod at heem.org of course substituting the word at with the @ symbol.
  • What I'm waiting for is for every item I buy at the grocery store to be RFIDed, and for my fridge and pantry to read all of these. My computer would keep a list of my desired inventory of staples and upcoming menu and any special order items and I would get a weekly delivery from the grocery store willing to provide refills at the least cost.

  • by drfrog (145882)
    ive been using spud for a while know these guys are awesome!
    spud urban delivery [www.spud.ca]
  • Kosher Food (Score:3, Interesting)

    by Erwos (553607) on Friday May 21, 2004 @10:51AM (#9215124)
    While I doubt many/.'ers keep kosher, for people who do, it's very difficult to shop online. Here's why:

    Basically, the way you can tell if something is certified kosher is to examine the packaging for a "hecsher" - it's that little circle with a U inside, or the Star of David with a K in it, or any similar looking thing (obviously, different markings are from different kosher-cert orgs, so you've got to be careful to know which ones to trust).

    However, it can be VERY difficult to ascertain what's kosher certified or not from online photos of the good. A lot of the time, the packaging shown online won't have the hecsher, or it'll be too small to see what it is, that sort of thing. Online shopping is therefore a bitch for the kosher consumer, and will continue to be until someone figures out how to exploit this problem for some commercial gain.

    Seeing as kosher Jews (forgive me for stereotyping) tend to be pretty good eaters (ie, would order quite a bit), you'd think there would be _some way_ to make some money off this. Hmm.

    But, anyways, there's one kind of person that an online supermarket just doesn't help too much these days.

    -Erwos
  • Change Your Model (Score:3, Interesting)

    by nicktripp (717517) on Friday May 21, 2004 @11:13AM (#9215466) Homepage
    Schwan's [schwans.com] got it right in the U.S. They've been doing home grocery/food/meal delivery for years. When Internet popularity rolled around, they took advantage of technology to improve their business rather than to create it.
  • by markdj (691222) on Friday May 21, 2004 @12:24PM (#9216552)
    I've used Acme's online ordering and delivery twice so far. Both times there were errors in what they delivered versus what I ordered. The driver/delivery guy did not want to spend the time for me to make sure that I checked the order (he was nice enough, but he acted like he was in a big hurry), and both times I had to call the toll-free customer service number to get a refund or redelivery with the right stuff. To their credit, they made it right both times. Until drivers take the time to ensure that what they deliver is what was ordered, and they have the authority to fix the problem on the spot, there will still be some bad word of mouth press.
  • by dbc (135354) on Friday May 21, 2004 @01:29PM (#9217673)
    We used to have a choice of both Webvan and Peapod back in the day. Both were great. Right after our daugher was born, by C-section, my wife was ordered not to carry loads and to avoid stairs where possible.... we had a flight of stairs to the front door to our townhouse at the time. She was a heavy user of Peapod for groceries and DrugStore.com for diapers. She once said: "How did people ever have babies before the web?"

    Anyway... Peapod was great, they did a wonderful job of selecting produce for you... always first rate stuff. But they pulled out of the area because they were competing with Webvan and were not interested in bleeding money in exchange for market share.

    Webvan continued for a while, but let's face it... they were clucks. They had *no* control over their costs. Very stupid. In the grocery business the margins are thin and you *must* be on top of your costs. Webvan were completely brain-dead idiots in this regard, they did lots of things in expensive ways for no benefit at all over the cheaper ways. They deserved to die.

    We have used Safeway.com a few times... but don't use them for anything other than food-in-a-box. Their produce is marginal to begin with, and what they select for web orders is the dregs of the bin. Both Webvan and Peapod delivered *great* produce... Safeway.com is a health hazard on wheels in that regard.

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