Finally, somebody has found a use for the Internet. I knew it would happen eventually. For years we've been hearing about how electronic commerce is changing the world, but apart from CDs and books there is rarely anything worth buying. What is available is often too expensive or too inaccessible. That was until grocery shopping and gourmet grub arrived. Now while people are supposed to be working hard at their desks they can log on to a site like WebVan.com or CookExpress.com and order prepared dindins, milk, bread, wine and almost anything that can be found in a supermarket.
OK, so you have been able to order pizza over the Internet for years but this is different. It's top nosh. Filet mignon. Seared sea scallops. Pork medallions. And cheap too. Only $15 (€14.35) per head. The company even ships prepared meals to anywhere in the US via Federal Express.
Many of the high-profile Internet investors are getting in on the action. Those still dubious about Internet stocks see that there is real money in groceries. Indeed, Americans spend over $100 billion on food every year and the research firm, Forrester, estimates that almost 5 per cent of US families will be shopping online in 2003. Small wonder then that firms such as Intel, SAP, Nordstrum, and Amazon.com, and some of the venture capitalists responsible for investing in the companies that created the Internet such as Hummer Winblad, Benchmark, and Softbank are lining up with millions of dollars in hand to invest in online grocery stores. And here, almost a dozen have opened recently. Most are small operations but about five currently have plans to go nationwide.
The publicly quoted Peapod is perhaps the longest established. It was started in 1989 and back then sold a computer with a modem as part of the service. Customers would e-mail their shopping lists to Peapod's shoppers. They would don green uniforms and go to the local Safeway supermarket, buy the groceries, and deliver them to the doorstep.
Now Peapod is on the Web. It has got rid of the shoppers and now has a fleet of delivery trucks. The problem today is who has the time to wait in for the trucks. One company, Streamline.com, mindful that most of its customers are too busy to wait around for the truck, installs a lockbox in its customers garage. The box contains fridge, freezer, and room temperature cabinet where groceries, camera film, dry-cleaning and of course frozen goods can be stored. The company will even pick up Blockbuster videos for its customers and repair their shoes.
The catch? You have to have a garage and pay a subscription fee. Of course, despite the obvious potential all of these companies, like their over-priced compatriots, are losing money hand over fist.
The New Jersey-based NetGrocer actually ships all its products via Federal Express. And once ordered they arrive one, two or three days later. In order not to inconvenience its customers with the hassle of waiting for the delivery, NetGrocer instructs Fedex to leave the anonymous brown box on its customer's doorstep. Even in New York, it seems, the packages are not stolen.
However, it only sells all non-perishables such as washing-up liquid, toothpaste, and bubble bath. Will these online grocery sites succeed? Yes, especially if the bricks-and-mortar supermarkets don't catch on and enter the market quickly. After all, there are very few people who don't view grocery shopping as a monotonous chore.
Whichever one or two companies manage to capture the market first will probably attempt to get that much-coveted last mile from warehouse distribution location to the home.
Still, I know I will use online shopping. If nothing else it will give me a use for the Internet.
