Grocery Delivery
Grocery Delivery From the early 1900・s to the 1960・s home delivery was the common way consumers received groceries, but by the 1990・s the market for delivery to the home was almost extinct. In the past, home delivery was a local service, but with the development of large supermarkets and giant all purpose retailers, home delivery virtually disappeared. ... With the rise of the Internet, home delivery is once again a popular concept. In our fast paced lives many view grocery shopping as a chore. By being online, grocery shopping can be done at the office, late at night, or anytime, with delivery that is convenient for you. Even though, grocery shopping online may seem like an excellent idea, numerous ventures are having difficulties staying in business. Two of the most well known online grocers, Peapod and Webvan are examples of companies that helped introduce grocery shopping to the Internet. ... Peapod remains in business because it has been acquired by a brick and mortar grocery store, while Webvan failed from its overzealous distribution and growth plan. Many hopefuls believe that online grocery failures are from flaws in management and not in the business model. Environmental Factors The external environment needs to be examined with great detail in regards to the online grocery store industry. The ease of sitting in front of a computer buying groceries when one has a spare moment is more appealing than running to the grocery store after a long day at work. The online grocery concept allows people to shop any place that has a connection to the Internet. Although this might be more convenient than going to the store, online grocery shopping can be very time consuming. ... Online grocery stores cannot be used as convenience stores. When shopping online most stores require a minimum order amount and charge for delivery. ... 95 may be charged per delivery. ... Even though grocery delivery would be a great asset to this group of people, most do not have the computer skills or access to the Internet to reap the benefits of the online grocery service. ... High costs have restricted online grocery retailers within certain geographical areas. ... Another factor that affects all grocery stores and especially e-grocers is the notorious paper-thin margins that the industry must deal with. The grocery business is an industry that makes money on volume and not on margin. ... The costs of items e-grocery stores are selling are very low. The small number of individuals shopping online for groceries combined with the low margins will make it difficult for an e-grocery to be profitable. Competitors Indirect The indirect competitors for the online grocery store industry are brick and mortar stores that carry the same products but do not have the service of home delivery available. With this in mind, one could say that any local or national chain grocery store can be considered an indirect competitor. ... Fast food restaurants, delivery services, and other sit down restaurants may all pose a threat. Direct The direct competitors of Peapod and, the now bankrupt, Webvan are other grocery retailers that are on the web. ... Albertson・s and other traditional brick and mortar stores are also jumping into the online grocery business and are competing heavily for customers. Online retailers that offer delivery of non-perishable goods are also competitors. ... The popularity of the Schwan Company is also a threat to the online grocery and delivery business, although not on the grand scale. The online grocery business still has more products available than the Schwan Company, which only offers frozen goods, but is known for its friendly service and no minimum purchase amounts. ... This year Peapod was acquired by Royal Ahold, a Dutch brick and mortar grocery giant and is posed to continue growing. ... Being acquired by Ahold has allowed Peapod access to its brick and mortar grocery brands and network of physical locations. ... Jupiter Media estimates that online grocery sales could hit $7 billion by 2005. ... With the weeding out of weaker grocers, many believe that Peapod is a stronger company and will hang on until a strong online grocery sector surfaces.