Katie Hrinda,Rebecca Murphy,

&Tina Hrinda

What is Webvan?

Sought to revolutionize grocery shopping by taking orders online and delivering to customers’ homes and businesses.

Founded in December 1996 by Louis Borders (Border’s Books)

Offered services in 7 U.S. markets: San Francisco, Los Angeles, Orange County, San Diego, Seattle, Chicago, and Portland.

Planned to expand to 26 U.S. markets. Never intended to limit themselves to groceries. Had hoped to

expand into other markets such as videos, books, and airline tickets.

What is Webvan cont.?

When launched in Mid-1999 had raised about $800 million from venture capitalists and Wall Street.

About 2 years after the start of operations, Webvan filed for Chapter 11 bankruptcy.

Reportedly burned through about $830 million dollars without generating any sort of profit.

Why did Webvan fail?

Devoted too much time and money to the latest and greatest technology.

-Warehouses and distribution centers worth millions

-Fleets of delivery trucks

-Computer systems Hired big guns from consulting and technological firms, rather

than industry professionals who knew the ins and outs of the grocery business.

Tried to build everything on their own, instead of partnering with existing supermarket chains, wholesalers, or independent grocers.

Why did Webvan fail cont.?

People are use to clipping coupons and examining the produce themselves, are they really ready to entrust somebody else to do that for them?

Tried to do too much, too fast, with too little money!

Could it be successful?

What is the demographic of online grocery? Online Grocery vs. Amazon What would be a successful way of having

online grocery based on what you’ve seen with Webvan’s mistakes?

Future of online grocery

Why might places like Kroger and Ingles be more successful than Webvan was?

Would they use online delivery? What about place the order and pick it up? Will this hurt the existing set up of these stores?

Sources

Bassett, Lydia. “Why Did Webvan Fail?” (2001). 11 Jul. 2005

<http://students.washington.edu/llb/webvan.html>.

Glasner, Joanna. “Why Webvan Drove Off a Cliff.” 11 Jul. 2005

<http://www.wired.com/news/business/0,1367,45098,0.html>.

“Online grocer Webvan closes.” (2001). 11 Jul. 2005<http://www.

enquirer.com/editions/2001/07/10/fin_online_grocer_webvan.

html>.