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Internet Grocery Shopping Continues to Mature

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Last March, I wrote about how we had started using HomeGrocer.com, a local Internet grocery service, in place of trips to the supermarket. The article prompted much discussion on TidBITS Talk of issues surrounding the move of something as basic as food gathering from the real world to the virtual space of the Internet. And since March, a number of changes have occurred in the Internet grocery field.

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Update on HomeGrocer.com -- I've enjoyed watching HomeGrocer.com grow over the last few months. With most Internet-related companies, it's hard to get a feel for the changes in the company because your experience of them is so divorced from the real world. But with HomeGrocer.com, a truck arrives at our house each week, and most of the drivers are happy to chat while they unload our groceries. In May, HomeGrocer.com expanded to the Portland, Oregon area. The demand took HomeGrocer.com by surprise; within five weeks of announcing the Portland expansion, order volume there had reportedly increased past where it had been in Seattle after a year of operation. The surprise hit in multiple ways; HomeGrocer.com had chosen to send long-haul trucks from the company's Seattle warehouse to Portland rather than take the expensive step of building a warehouse in Portland.

<http://www.homegrocer.com/>

Local HomeGrocer.com service has improved in various ways as well. You can now schedule deliveries for any day of the week during a wider range of hours. HomeGrocer.com's Web site has had several usability improvements, along with the occasional step back, such as when someone decided it would be clever to force some items into a "Natural & Organic" category. That category had the effect of scattering items around your lists; some fruits and vegetables might be under "Produce," whereas others were "Natural & Organic." It was a dumb move, but to HomeGrocer.com's credit, our outraged messages received immediate responses and it quickly became a secondary categorization method.

HomeGrocer.com continues to add new products, but we've been disappointed with the amount of locally grown and seasonal produce they carry. Similarly, it doesn't seem as though they've added significantly more unusual or hard to find items. I fear that as HomeGrocer.com grows, they'll focus more on the least common denominator rather than on the aspects of grocery retailing that differentiate them from standard supermarkets.

The biggest news for HomeGrocer.com of late was a $42.5 million investment from Amazon. Although speculation about how the two businesses might combine their core competencies was rampant, little has changed externally. It makes little sense for HomeGrocer.com trucks to deliver Amazon orders given the efficiency and ubiquity of other delivery services, and perishable groceries are a significantly different market than what Amazon normally sells. I would like to see a consumer comments section for grocery items, along the lines of the reader comments section for Amazon's books. Although such comments aren't guarantees, any additional information when deciding what brand of refried beans to buy, for instance, would be helpful for those of us who don't buy refried beans often enough to develop much of an opinion on our own.

The Competition -- Although Amazon's investment will help HomeGrocer.com expand to new markets (the San Francisco Bay Area is probably next), other companies are also moving to fill the need for Internet-accessible grocery stores around the world. Peapod received good but not great reviews from TidBITS Talk participants; one of the reasons for the mixed reaction was that Peapod recently switched (at least in some places) from partnering with local grocery stores to creating its own warehouses. Although the move should make Peapod more efficient, it has also reportedly hurt selection.

<http://www.peapod.com/>

Webvan, a Bay Area startup, has also garnered quite a bit of press. Webvan is attempting to set itself apart from the other Internet groceries by waiving its $5 shipping fee on orders over $50 and by reportedly offering lower prices than you'd find in supermarkets. No one has yet reported in to TidBITS Talk on Webvan's service.

<http://www.webvan.com/>

I'm amazed at how many supermarkets the Seattle metropolitan area seems to support. The Internet grocers are only now starting to bump into each other in local markets, and it remains to be seen how that competition will play out.

Societal Aspects of Internet Groceries -- In my original article, I touched on a few societal aspects of shopping for groceries on the Internet, and more came up on TidBITS Talk.

Shopping for groceries has more societal baggage than most other forms of shopping, simply because food gathering isn't optional. One way or another, we must all acquire food each day, and the ways in which we've done that characterize society throughout the ages. In broad strokes, we've jumped from hunter/gatherers to nomadic herders to agriculturists; more recently, populations have shifted from farms to cities, farming has become significantly more mechanized, and we now take for granted immense food distribution networks. Overall, Internet grocers are only a minor shift in the overall ways we gather food - in fact, grocery delivery was commonplace in many cities not all that long ago.

However, Internet grocers deliver to a wider geographical area than old-time grocers delivering to local customers. These regular deliveries have the potential to change driving patterns, and given the tremendous impact of automobiles on society and environment, I expect that for some people the reduction in driving, with the concomitant reduced pollution and congestion, will prove especially important.

The social aspects of shopping also prove interesting. Although the traditional marketplace was often the primary opportunity for socialization for agrarian societies, many of today's shopping experiences do nothing to bring people together. Some stores realize the importance of encouraging community, so it's not uncommon to see bookstores with coffee shops or grocery stores with food courts. Many people crave community, and physical stores may find that providing a place to gather helps them compete against the increased efficiencies of the Internet grocers.

Some people on TidBITS Talk expressed fears about Internet grocery shopping being yet another excuse for people to avoid others, but I don't believe there's any real danger there. People who aren't interested in socializing don't do so at traditional grocery stores; folks who do can use the time saved with online grocers with friends and family. Sure, the possibility for abuse is always present; the individual must still take responsibility for his or her life.

On a larger scale, Internet grocery shopping represents a fairly fundamental shift in consumption patterns. Internet grocers affect local employment, taxation, and other issues related to the presence of traditional supermarkets. I can't predict how these issues will play out, since I think Internet grocers will have to maintain significant local presences in the markets they serve due to the perishable nature of many foodstuffs.

Finally, TidBITS Talk participants raised some concerns about the economic requirements to participate in Internet grocery shopping. Vast numbers of people can't afford computers or Internet access and as such, undoubtedly can't participate. Traditional supermarkets will continue to serve those areas, but I think we may also see innovative ways of providing hardware and Internet access to lower-income families. For instance, an Internet grocer making inroads into a geographic area could provide inexpensive computers and Internet access in exchange for a service contract, constant advertising, or a certain level of shopping. If the "free PC" movement proves successful in general (as it has in the cellular telephone market), there's no telling how far it might spread.

 

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