Online Grocery in Delhi NCR

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Online Grocery in Delhi NCR By: http://rationhome.com HED 460

Transcript of Online Grocery in Delhi NCR

Online Grocery in Delhi NCR

By: http://rationhome.com

HED 460

HED 460

Internet Grocery (E-grocery) 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 groceriesRationhome.com

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Internet Grocery (E-grocery) E-grocery can boost loyalty and increase

market share E-grocery is projected to be 2% of total

grocery shopping

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Webvan – “pureplay” Launched June 1999 – Hi capital Hub and spoke strategy $260 mil. Sales in 2000 $1 bil. expenses Acquired HomeGrocer.com in August 2000

Mid 2003 relaunch in S. CA?? CEO resigned ~ March/April 2001 Shut down July 9 2001Rationhome.com

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Peapod Launched 1989 Profit 1st Q 2001 in Chicago market Various strategies (from supermarkets

to dedicated distribution centers) Acquired in 2000 by Royal Ahold ($73

mil.) Pulled out of some markets and aligned

with different Ahold supermarket chains Rationhome.com

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New to Peapod?

 

  

              

  

               Groceries foryour home

Groceries foryour business

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Tesco – U.K. Reports profit 1 mil customers/ 90,000 orders/week 90% customers reached with existing

store network – lower delivery costs National store base Bought US GroceryWorks.com (35%)

(Safeway owns 50%)Rationhome.com

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Regionals PublixDirect – small dedicated warehouses

Palm Beach/Broward Counties 28 zip codes plus 13 more by 2002

2002 Atlanta and Orlando

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Regionals Albertson’s

Central warehouse/existing stores 37 states: Seattle, Las Vegas, Los

Angeles, Vancouver, San Diego Average order $110/52 items Produce and meat in top 10 items $9.95 deliver, $5.95 pickup

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Delivery Models Next day service

2 hour delivery window $19.95/month. $9.95/order

Order-on-demand (ensenda) 60 minute delivery window

Pre-scheduled, unattended delivery (most are out of business) $35/month Receptacles/refrigerators

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Fulfillment Models Stores

Pick, pack, deliver – special carts Use existing assets

Distribution Centers/Warehouses Hand held radio frequency scanners

to help pick products Delivery to consumers

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Fulfillment – Logistics provider Whyrunout.com

California based – Statler Bros. stores Purchased customer referral rights from

Webvan, webvan emailed giving options Deliver drycleaning, film, health/beauty More than one store ($9.95, + $1.00 each) Deliver 2:30-8:30 p.m.

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Fulfillment – logistics provider Ensenda

Delivery service in local markets Uses existing stock from local retailers Delivery within 60 minutes Couriers in 75-100 markets $19.95 delivery charge >sales and >order size reported

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Preferred Service Models

29

47

28

67

23

51

23

46

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All I nternetI nterestedRationhome.com

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Financials Few making profit Grocery profit is usually 1-2% Potential profit percent of up to 12% Infrastructure and volume are the main

barriers to profits

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Future Not dead Partner with large food retailers Focus on concentrated urban areas

with wealthier clients (volume/profit) Lack of national supermarket chain

means success of local e-tailers

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Fulfillment Issues

Product availability Order processing Delivery Returns Customer service

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Fulfillment87 85 84

78 75

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0102030405060708090

Fulf illment Capabilit ies Expected

Verify rcpt .AvailableVerify shipStat usBack orderLocal return

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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

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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

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Returns

29

41

53

0

10

20

30

40

50

60

Ret urn Experience

Ret urnedToo much HassleNo Effect

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Order Status (capability)

94.597.491.7

53.8

83.3

48.7

77.8

48.7

0102030405060708090

100

Conf irm Back Order Shipped Tracking

Pure PlayMult i-channel

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Returns/Back Orders

4.3

5.1

3

5.9

0

1

2

3

4

5

6

Ret urns Back Order

Pure PlayMult i-channel

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Fulfillment Cost as % of Revenue19

1314

11

02468

101214161820

Today 2 Years

Pure PlayMult i-channel

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

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