HED 460 Internet Grocery E-tailing Very few consumers shop Internet for groceries 1 in 5 Internet users who are the primary household grocery shopper are.

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Presentation transcript:

HED 460 Internet Grocery E-tailing Very few consumers shop Internet for groceries 1 in 5 Internet users who are the primary household grocery shopper are interested 42% would like to spend less time shopping for groceries Almost 40% Internet users enjoy shopping for groceries

HED 460 Delivery Models Next day service (Peapod, homegrocer)Peapodhomegrocer 2 hour delivery window $19.95/month Order-on-demand (webvan)webvan 30 minute delivery window Pre-scheduled, unattended delivery (streamline, shoplink)streamline shoplink $35/month Receptacles/refrigerators

HED 460 Preferred Service Models

HED 460 Fulfillment Models Stores (beeline)beeline Distribution Centers/Warehouses Hand held radio frequency scanners to help pick products Delivery to consumers 10 drivers/150 orders, now 28 drivers/500 orders

HED 460 Financials No one is making a profit Grocery profit is usually 1-2% Potential profit percent of up to 12% Infrastructure is the main barrier to profits

HED 460 Fulfillment Issues Product availability Order processing Delivery Returns Customer service

HED 460 Fulfillment

HED 460 Keeping Customers in the Loop Circuit City Local store pick-up (Express pickup) Identify up to three local stores Checks availability at the local stores With Express Pickup no shipping Pick up at customer’s convenience

HED 460 Keeping Customers in the Loop Staples Enter zip code at start of shopping for real-time inventory availability Anything in-stock is available for next day delivery

HED 460 Returns

HED 460 Delivery/return solutions zBox (portal) zBox Eponymous bin for secure delivery and return Activated by keypad $5/month and $60 security deposit Empori.com (portal) Empori Parcel pick-up and return depots (Toronto) for Internet merchandise Free Storage lockers (climate controlled) Accessible by password

HED 460 Order Status

HED 460 Returns/Back Orders

HED 460 Cost as % of Revenue

HED 460 Fulfillment Challenges Today Fulfilling orders on time Managing peak season volume Lowering total fulfillment costs

HED 460 Fulfillment Challenges Tomorrow Distributing globally Lowering total fulfillment costs Managing peak season volume Keeping up with order volume