E-Commerce Times Talkback
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The shutdown of long-struggling Webvan on Monday leaves several major
U.S. areas without any online grocery service, as well as with no clear
indication of how quickly the sector's remaining competitors will rush
to fill in the gaps.
In particular, large pockets of the South appear to have been at least
temporarily abandoned by Internet urban delivery providers, and could
remain so until industry survivors feel secure enough to pursue expansion.
However, Gartner research director Whit Andrews told the E-Commerce Times
that the next five years will bring about a "major innovation" in channel
mixing, sales and methods.
Now there is someone that delivers the full grocery list on a national level (and in the south)
http://www.HomelandDelivery.com - National
So there is somewhere to turn.
I've also seen some positive press coverage about Grocery Shopping Network being a major player in the Online Grocery Shopping arena as well. AND I've actually had the opportunity to use this shopping convenience at my local Coopers Market grocery store here in Minnesota.
My personal opinion is that Online Grocery Shopping is certainly not going away any day soon - on the contrary I hope to see it double or even triple in the near future. The demise of WebVan is a shame, but other providers are out there and should be given a chance. I am overwhelmingly pleased to be able to order my grocery items online! Here's to the brave providers like Grocery Shopping Network and Simon Delivers that continue to plow forward!
We have an on-line grocery service in the Toronto area called Grocery Gateway. They have been operating for a couple of years and claim to be profitable on an operating basis. Yet I haven't seen any mention of this company in your news reports.
Why is it that Americans have so much trouble looking beyond their own borders?
Hugh, While your inferiority complex concerning the U.S. is a bit melodramatic, I will say that it appears that Canadian grocery delivery companies are a bit smarter than their American counterparts. After researching the Grocery delivery company that you mentioned, I found that they have a minimum order of $60 and a delivery charge of $8.00, regardless of order size. In other words, delivery is NEVER free!!
While George Shaheen opens his golden parachute, Webvan stockholders have to be shaking their heads. A look at the math tells the story.
Avg. margin for grocery sales - 3%
Avg. order size - $75
Gross margin - $2.25
Avg cost per delivery stop - $6-$8 (depending on delivery density)
At more than $3 loss per delivery, it is amazing how long Webvan lasted.
I read that HomeGrocer's breakeven point was $90 of groceries per delivery, based upon their customer base at the time. The question here is the business model that online grocers adopted, that GroceryWorks/Safeway are now moving away from...the hub & spoke.
I'm curious as to what PublixDirect is going to do...they've been promising home delivery for almost a year now, and have yet to begin. I bet they are rethinking their strategy as well, and will probably drop their proposed distribution centers for out-of-store deliveries.
Our family had used HomeGrocer/Webvan for about 7 months. For us it was a godsend. I'm disabled, my husband is critically ill and it's very hard for my 79 yr. old mother to do the shopping. We live in Long Beach, CA and are wondering if there's ANY online grocers that services our area. We usually order about $400-500 in groceries monthly. I know of many other people that would gladly use online grocers.