Amazon.com has launched a grocery-delivery service called Amazon Fresh. Currently, the service is limited to serving select areas of Seattle. Webvan,an earlier online grocery delivery company, previously serviced the Seattle market along with eight additional major metropolitan areas. The company had plans to serve at least 26 cities before going bankrupt in 2001. Webvan burned through close to a billion dollars chasing an aggressive and poorly planned growth strategy. Other online grocers such as Peapod based in Chicago and Fresh Direct based in New York City have pursued more metered growth within limited markets. Slowly proving and perfecting the business concept has allowed these companies to understand the intricacies of the local markets.
I believe there is still a great deal of untapped potential in the online home delivery market. The trend for the majority of the aging population is to stay as independent as possible. That means staying in their homes versus moving to a more expensive assisted living facility. Home delivery of groceries and medications may be a tool that caregivers will adopt. Additionally, the delivery of prepared meals for people with dietary restrictions could be incorporated into this model.
2 comments:
Interesting that Amazon has moved into this arena. But it could be a good move. Amazon already had a quality reputation for home delivery, and a large customer base that has already indicated an interest in ordering online for home delivery.
But the important question... will all deliveries of over $25 be free? ;-)
I'm not so sure grocery-delivery service is a great idea. While I'm buying more and more things on-line, I can't really envision buying my groceries on-line. While I admire the innovation and thought behind it, I don't believe it's a viable business model. Since many groceries are perishable items, I think it's quite difficult to satisfy consumers when you cannot exactly provide descriptions or pictures of the items to be purchased.
Perhaps the reason that Peapod and Fresh Direct are still in business is because they are catering to local tastes. It would be very difficult to build a model that is flexible enough to cater to different tastes and cultures in grocery.
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