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On-line grocery shopping is a painless way to stock your pantry – and you’re not limited to eight items or less.

Text: DON TAPSCOTT
Illustration: GREG WHITE

NOV '04

Like the tenacious little engine that could, small Internet-based grocery stores are chugging along, quietly making money and expanding across North America. A growing number of consumers are being persuaded that pointing and clicking for milk and laundry soap is more appealing than pushing a wobbly cart up and down grocery store aisles.

Does this give you a sense of déjà vu? On-line groceries were supposed to be the dot-com mega-hit of the late 1990s, tapping into a North American market worth more than $650-billion a year. For example, Webvan constructed state-of-the-art grocery distribution centres only to discover that just because they built them didn’t mean customers would come. The company burned through more than $1-billion by the time it declared bankruptcy in 2001.

Today it appears that on-line grocery shopping wasn’t such a dumb idea after all, just a bit ahead of its time. We had to become more comfortable with the on-line lifestyle before we would trust our tomatoes to technology.

Canada’s best-known on-line grocer is probably GroceryGateway.com, and my wife and I are big fans. Loblaws is running a low-profile experiment as egrocer.com in Mississauga. IGA has been at it for a few years in Quebec. Thrifty Foods has offered on-line shopping on Vancouver Island since March 2002 and the company says the profitable service is enjoying double-digit growth. In the United States, the biggest is Peapod, and traditional grocery giants such as Safeway are expanding their on-line offerings.

The naysayers argue that Internet grocery stores will never take off because people love the shopping experience. Yet most grocery shopping is simply replenishing staples – and hardly anyone enjoys purchasing detergent. The time-crunched loathe traditional grocery shopping; the elderly or infirm find it impractical. And who isn’t irritated by buggy jams or checkout lineups accompanied by a children’s chorus of “I wanna chocolate bar”? Like me, many prefer the features and advantages that only on-line shopping can offer. When shelf space becomes cyberspace, there are options available that make for a more personalized and engaging experience.

Once all the food items are in the grocery store’s database, the data can be sliced and diced any way the customer wants. On the Atkins diet? Instruct your on-line grocery site to show you only items that are low-carb. Sure, traditional grocery stores have low-carb shelves, but these are restricted to expensive prepared products; they don’t include the many naturally low-carb items sprinkled throughout the store – such as asparagus. When Peapod.com added asparagus to its inventory of low-carb items, sales of the vegetable shot up. Go figure.

It’s equally effortless to generate a list of low-fat, high-fibre or peanut-free products. Value-conscious shoppers can ask for items that are on sale or reduced in price. Choices can be tailored to anybody’s tastes, with virtually no effort.

Just as there are different business models in bricks-and-mortar grocery stores, not all on-line grocers are equal. Some offer premium products at premium prices, emphasizing quality and time-saving convenience. Others offer prices similar to traditional grocers’ and recover their delivery costs by not paying overhead for stores in high-traffic areas with acres of parking. All of the on-line companies strive to build consumer confidence, offering money-back guarantees and promising freshness.

The on-line grocers are also prospering today because they’ve gained experience and are using astute new tools, such as mapping software, to help them operate efficient delivery systems. If your neighbours are getting a grocery delivery tomorrow afternoon, the software may automatically offer inducements for you and other existing customers in the area to order, to help cut costs.

The on-line grocery mini-boom, particularly in the U.S., means there’s no better time to try the service. Many companies offer inducements for first-time shoppers, but you should make more than one order before deciding whether the company meets your needs. Market researchers have found that on-line grocery shopping is an acquired taste and our old habits die hard.

Of course, it doesn’t have to be an either/or proposition. My family doesn’t do all its shopping on-line. We still like visiting the local deli and other specialty stores for some items and much of our produce. But for the staples of the pantry, on-line shopping has unmatched appeal. [ ]

ADD YOUR COMMENTS > dtapscott@enroutemag.net

NOV '04