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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 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.
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Some people, when looking for a new apartment here in NYC will ask: "does FreshDirect deliver here".
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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.
We use a mixture of on-line and local stores, mind you, our on-line shopping is all from major UK chains. Not having a car, it's much nicer than battling on the bus with shopping to have assorted munchies delivered to your door.
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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.
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!
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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.
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We use Simon Delivers fairly regularly, and for us it's a nice way to cut down on grocery shopping trips . It's a bit more expensive than the big grocery chains, but if there's one thing I hate, it's sloshing through the "big box" grocery stores. :-)
Throw in an occasional trip to Sams Club (non-free reg required) to stock up on bulk staples, or a trip to the local farmers market and co-op and the hateful trips to the "big grocery" chains are all but eliminated
Schwans 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.
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.
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. And I'm talking about major chains, not bodegas here!They simply relied on there being no competition. And now all of a sudden there is. People would flee to delivery services even if they weren't easier, better and cheaper. Not to mention that carrying groceries is a pain in "carless" environments, especially for older folks, especially if you live on the 3rd floor without an elevator.
I see the grocery delivery trucks everywhere now, and every day. Judging by the frequency, I'd say the local supermarkets where I am have already lost a significant amount of business. Bravo capitalism.
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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.
"Provided by the management for your protection."
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.
Yep; I'll second that.
In London where most young professionals don't own a car, its a real pain trying to do even a week's worth of shopping. We've been using on line shopping for 2 years; service is good and there is lots of competition - Tescos, Sainsbury's and Ocado are the main ones. In fact I can't think of any of my friends in town who don't use online shopping!
There are lots of benefits; you can take advantage of special offers in bulk; you can select the temperture of some products - useful for drinks for parties!; don't put up with screaming kids; and you can reuse the same order as last time to speed up the process; you don't pay for delivery and you don't need to worry about transport costs.
Two main downsides:
i) buying fresh fruit & veg is a bit hit and miss
ii) if your product is not available they offer a subsitute product; again this is very hit and miss. However the subs are in a different bag / basket and can be sent back if they're not suitable.
Just my tuppence.
P.
I use FreshDirect 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.
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)
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 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.
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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?
Life is like a web application. Sometime you need cookies just to get by.
(We're a family of five, including three kids age 5. 5. and 4.)
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.
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One of the big outfits for online groceries in Canada is Grocery Gateway. 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 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...
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
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When our little one was born in 2000, we found that NetGrocer 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.
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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 good tomato, or fresh bell pepper. I still don't know why the hell she thumps cantalopes.
These people impressed her, and she raved about the quality all the time.
Later, when they went out of business, we started looking at other home deliveries. Albertsons.com did not deliver quite the same quality at first, but got better later... We never tried cosmo, or webvan.
Now, my wife is far healthier, and we can grocery shop again... however I think I'll try some online grocers a few more times, and see what kind of quality I get now.
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.
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. The lowest end grunts at the grocery store that have to run price checks and put returned merchandise back on the shelves know the store inside out so they could be hired as order fillers / delivery guys, you could pay them 50% more than what the grocery store pays and still make a profit. Perhaps work out a deal with the grocery store giving them ALL of your business in exchange for a 10% (or whatever) discount.
Need to scale up a little more, hire another grunt. The massive start-up costs in creating robotic facilities and food storage warehouses are completely avoided.
Glonoinha the MebiByte Slayer
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
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We used Pea-pod for a while and I have to say it never occured to me to tip the driver. I was paying $5 for delivery - so was a tip expected? Do most people tip?
Schwan's 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.
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.
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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.
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Grocery Gateway has been operating in Toronto since late 1999. When they first started you got your groceries delivered for $6, with the first delivery free. They were just picking things off the shelf from Longo's (a grocery store) and delivering it. Once business picked up they were able to have their own stock, and can now be seen up at Downsview.
As a student at the time it was a fantastic service. Each of the guys in the house (there were 4 other engineers sharing the place I was living in) would log in and add what they wanted.
Over the years they changed the delivery schedule so that you pay more for peak hours.
Their customer service was outstanding. If they didn't have the item you wanted in stock you'd get the next size up for free. Failing that you wouldn't get it, but that was rare. If you had any problems with the quality of the product they would just credit your account (over the phone, no questions asked).
Overall a great service, especially for students who don't have a car, and would be willing to make an order with room mates.
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.
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 delivery window, several different orders could be rounded up and put onto the same delivery van for economies of scale during the delivery process.
If there was a way to encourage the customers to get their orders in at least 12 hours in advance and still have the flexibility of a 4 - 6 hour delivery windows, the scheduling process can scale even higher. Allow for 'immediate processing' at a premium, but give incentives to help the queue form in a smoother manner.
I agree that the margins could be much higher if it was the store running the service, but I wonder if it would be even marginally profitable as a third party service. A lot of unemployeed high school kids could be doing something like this if the front end was developed smooth enough.
Glonoinha the MebiByte Slayer