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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'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.
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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.
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.
"Those who would give up essential liberty to purchase a little temporary safety deserve neither liberty nor safety."
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.
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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.
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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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.
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.)
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.
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.
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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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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
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.