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Internet Grocery Shopping Slowly Gaining Ground
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."
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.
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.
The meek shall inherit the earth, in 3 by 6 plots. - Lazerus Long
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 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 written by a Prof at Wharton (free - but registration required)
More recently, a WebVan style UK Grocery operation called Occado has started too - working with upmarket Grocer Waitrose. 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.)
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.