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Internet Grocery E-tailing

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. Delivery Models.

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Internet Grocery E-tailing

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  1. 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

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

  3. Preferred Service Models HED 460

  4. Fulfillment Models • Stores (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

  5. 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

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

  7. Fulfillment HED 460

  8. 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

  9. 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

  10. Returns HED 460

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

  12. Order Status HED 460

  13. Returns/Back Orders HED 460

  14. Cost as % of Revenue HED 460

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

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

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