E-Commerce Times Talkback
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In its latest move to keep pace with rival Albertson's, grocery giant Safeway has launched
its online grocery shopping and delivery service in the San Francisco and San Jose,
California, areas. "There is room enough for multiple winners in this space," GartnerG2
research director David Schehr told the E-Commerce Times, noting that he is not surprised
to see one-upmanship taking place.
I find it interesting that supermarkets in the US have taken so long to integrate their physical and online offerings. It must be related to scale. The bigger you are, the more complex the solution must be.
My company developed and launched an online supermarket 7 years ago on the little island of Barbados that delivers every item in the store to the customer's door, provides loyalty points and even collects returnable bottles with the amount debited from the final bill.
The supermarket (www.supercentre.com) was profitable in its first year. No extra warehouses, no specialty equipment.
Well, this should be an interesting battle.
However, I still believe that Webvan was a premier service, providing a great selection of produce as well as excellent customer service.
Safeway does not offer either and their prices are consistently high. If Zanotos - a smaller chain - offered delivery service, that would be great. But Safeway & Albertson's can be compared to HP and Compaq, too large to offer quality goods at a great price.
Although Webvan's service was great, they failed to overcome two fundamental constraints. The first constraint was that the majority of people don't order simply because they can't be home to receive delivery. The second constraint was that the first constraint causes excessively high delivery costs.
Safeway faces the same two constraints, but both will vanish when storage/delivery boxes are placed outside of consumers' locked front doors.
I love it, the reemergence of online grocers. So when is Kozmo making its return?