Internet Grocer, Inc. was formed in 1993 to capitalize on a perceived opportunity that would… 1 answer below »

Internet Grocer, Inc. was formed in 1993 to capitalize on a perceived opportunity

that would result from growing use of the Internet. The concept for the venture was

based on the founders’ belief that significant unserved demand exists for home delivery

of groceries. They believe that expanding use of the Internet will prove to be the critical

success factor for a grocery home delivery venture.

Traditionally, home delivery of groceries has not been economical except in a few

unusual markets. While the concept of home delivery is attractive to consumers, attempts

to offer home delivery generally have not been successful. Most efforts have been

carried out by individual grocery stores base on telephone orders from their customers.

Taking orders by phone is time consuming for both the customer and the merchant,

products selected by the grocer for delivery often do not measure up to the customer’s

expectations, and it is difficult for customers to “shop” without being able to browse

through store aisles. As a result, customers might experiment with home delivery, but

usually would revert back to shopping at the store after a couple of attempts.

The founders of Internet Grocer see the Internet as the key to building a viable

home delivery business on a large scale. Using the Internet, a customer could shop in a

virtual grocery store at any hour. A customer’s order history could be saved and used as

a reminder list for the next order. The venture could process orders and prepare them for

delivery at convenient times, even late at night. With a large enough customer base, the

venture could offer a broad selection of products. By dealing directly with dairies,

bakeries, seafood markets, produce markets, and butchers, it could deliver products to

consumers with less handling and could eliminate retail inventories. Perishable grocery

items could be brought to a central distribution facility daily, and delivered to customers

on the same day. Eventually, the venture could begin to use its customer base as a

marketing resource. The Internet site could be used to target advertising to specific

customers, and customer choices could be used to study responses to new products and

advertising efforts.


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