Internet Grocery Shopping Slowly Gaining Ground 283
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."
It's already taken ground in England (Score:5, Informative)
Long Live Naked Grocery Shopping! (Score:5, Informative)
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.
Nothing new here, move along now. (Score:3, Informative)
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
Re:Nothing new here, move along now. (Score:2, Informative)
We currently use Tesco's but would probably switch if the Asda store in our area was up and running.
Online Shopping - UK a world leader (Score:4, Informative)
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.)
Re:I use this in the UK (Score:2, Informative)
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)
online grocery shoping is amazing. (Score:2, Informative)
Internet Grocery In Western Canada (Score:4, Informative)
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.
Can't live without it (Score:3, Informative)
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...
Re:Delivery is Everything (Score:3, Informative)
It was an impressive facility, with top-quality foods. Their meat orders were split out and EDI'd to a local butcher, who would make several deliveries a day to match up with customer orders. The result is that online shoppers got fresher cuts of meat than you would see in the grocery store. The question was how quickly they could grow and service their debt load. I think they're still in business today, which is saying something...
Re:I miss WebVan (Score:3, Informative)
WebVan was one of the few "new ideas" that was based on a proven model. Almost all food stores use to deliver in the city back before cars dominated everything.
S'pore has got a few online stores doing OK (Score:2, Informative)
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 government so it isn't a surprise that the shopping cart and browsing system has yet to keep track of multiple page categories nor does the search work very well. Some items they have, you literally can't purchase because of this. Shipping is OK, but it is through our post service which while great as a postal carrier, lacks some customer service for this. No stock control if you can actually find what you want.
Coldstorage (one of the semiindependent 'chains' in S'pore) has great selection of products online, a great search and category system. However, it never has a correct stock count and some items they never stock.
Prices overall for these delivery services are comparable with the regular stores, though because of stock issues you may end up with only half of what you order. It has more than once been a problem that we must go buy missing items at actual the store, hence making home delivery quite pointless and actually time consuming.
No surprise, really (Score:4, Informative)
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)
New, happy Peapod user (Score:2, Informative)
With a 3 year old, a 4 month old and a full time job, I've reached the point where I'm simply out of large blocks of free time. I had started going shopping at 7am on Saturday, not because I like it, but because that was the only time I could go. Now I submit and order to Peapod and groceries arrive the next day.
Quality of produce and fish (my main concern) are excellent.
My only problem is that I buy my meat, milk and diapers at a warehouse club, and I do my own cooking (no higher-priced pre-packaged meals) so it's hard for me to hit the $100 cutoff for the lowest delivery charge ($4.95). But I got coupons for $5 off my first 5 orders, that plus choosing discounted delivery times should give me almost 2 months of nearly free service. They don't have everything available either, but if you have to go to the B&M store, you're in and out in 5 minutes.
I'm liking the lists feature, too. You can break things down by category (I've got lists for pantry items, baking, produce, etc), or by recipe (list everything you need and buy what you don't have - great for menu planning).
For me, what it boiled down to was this: Am I willing to pay someone $5-$8 to go shopping for me and deliver the groceries to my kitchen? Answer: Yes!
DD
Re:Do you tip the driver? (Score:3, Informative)
Internet Order / In-Person Pickup (Score:1, Informative)
They charge a $4.99 per order flat fee, but even with the fee, our grocery bill has gone down a bit (probably due to lack of impulse buys).
It's a nice service for my pregnant wife, but I suspect she won't stop using it even after the twins are born.
Re:Do it at night. (Score:2, Informative)
Typically what we do is have Peapod deliver twice a month (usually the bulk stuff like soda, detergent), then make a few quick dashes to the local Dominick's or Cub Foods for fresh vegetables and fruit and a few replacements when needed. I save a ton of time, and gladly pay for the convenience.
Who wants to pay for delivery? One answer would be people who believe that their time isn't cheap.
We have used three online grocers (Score:5, Informative)
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.