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<div class="center_top">Thoughtful, detailed coverage of the Mac, iPhone, and iPad, plus the best-selling <a href="http://www.takecontrolbooks.com/?pt=TB-TAGLINE" style="color:yellow">Take Control</a> ebooks.</div>
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<h6>Mac OS X Services in Snow Leopard</h6>
<p><p>Mac OS X Services let one application supply its powers to another; for example, a Grab service helps TextEdit paste a screenshot into a document. Most users either don't know that Services exist, because they're in an obscure hierarchical menu (ApplicationName > Services), or they mostly don't use them because there are so many of them.</p><p>Snow Leopard makes it easier for the uninitiated to utilize this feature; only services appropriate to the current context appear. And in addition to the hierarchical menu, services are discoverable as custom contextual menu items - Control-click in a TextEdit document to access the Grab service, for instance.</p><p>In addition, the revamped Keyboard preference pane lets you manage services for the first time ever. You can enable and disable them, and even change their keyboard shortcuts.</p></p>
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<div class="featured_meta"><div class="meta_article">08 Mar 1999 | <a href="/article/5303?print_version=1">Print <span class="shift_up"><img src="/images/printer_icon.gif" alt="Printer-Friendly Version of This Article" border="0" width="9" height="10"></span></a></div></div>
<H2><a href="/article/5303">Groceries in the Mist</a></H2>
<div id="article_blurb_3980"><p>Since Tristan was born in January, Tonya and I have been leaving the house less frequently. We can't escape midwife and pediatrician appointments, but we've cut down on shopping - or rather, shopping that we can't do via the Internet<span class="readmore_series"><a href="javascript:void(0)" onClick="return showhide_article('3980')">Show full article</a></span></p></div>
<div id="article_text_3980" style="display:none"><p class="showhide_all_series"><a href="javascript:void(0)" onClick="return showhide_article('3980')">Hide full article</a></p><P>Since Tristan was born in January, Tonya and I have been leaving the house less frequently. We can't escape midwife and pediatrician appointments, but we've cut down on shopping - or rather, shopping that we can't do via the Internet. I'm not talking about books or CDs, but the true necessities of life - food and drink, which we now buy through HomeGrocer.com, an Internet company based in Bellevue, Washington. As much as we like Amazon and My Yahoo, HomeGrocer.com is well on its way to influencing our lives more than any other Internet-based business.</P><P><<A HREF="http://www.homegrocer.com/">http://www.homegrocer.com/</A>></P><P>HomeGrocer.com opened in May of 1998, and their concept is simple. You order your groceries on a Web site, pay with a credit card, and have them delivered at a time you've chosen. HomeGrocer.com currently serves only the Puget Sound area, but I'm sure they plan to expand. If you live near Seattle, you can try HomeGrocer.com, and if not, look for similar services near you.</P><P><<A HREF="http://archives.seattletimes.com/cgi-bin/texis/web/vortex/display?storyID=101438&query=HomeGrocer">http://archives.seattletimes.com/cgi-bin/texis/ web/vortex/display?storyID=101438& amp;query=HomeGrocer</A>><BR><<A HREF="http://dir.yahoo.com/Business_and_Economy/Companies/Food/Retail/Grocers/Online_Shopping/">http://dir.yahoo.com/Business_and_Economy/ Companies/Food/Retail/Grocers/Online_ Shopping/</A>></P><P><STRONG>Shopping</STRONG> -- HomeGrocer.com will eventually charge a $35 per year membership fee, though they currently waive it to attract customers. Once you've logged in to the site, you see a page divided into four sections with frames. The top horizontal frame provides navigation and an ever-present Quickfinder search field. Searching is quick, although the searches are broad, so if you search for "vermouth," you'll see results with words like "Vermont" in their descriptions.</P><P>The left vertical frame contains Lists, Recipes, and Products. You browse through categories and see items and search results in the middle vertical frame. And finally, the right vertical frame contains your cart, the items you've said you want to buy.</P><P>HomeGrocer.com lets you make your own lists of items that you buy regularly and maintains two lists for you automatically: Last Shop, which records items you bought the last time you shopped, and My HomeGrocer.com, which records everything you've ever bought. These lists are especially useful if you buy roughly the same food each week.</P><P>The third section in the left frame, Products, contains all the products HomeGrocer.com carries, broken down into categories. Many items appear in multiple categories, so you aren't forced to guess the proper one.</P><P>When you view an existing list or start browsing the products, you're essentially searching HomeGrocer.com's database. The middle frame displays the results of those searches, either a collection of items (listed with size and price) or an individual item that you've clicked for more detail. Details vary by item, although they always include name, size, and price. Pictures are often available, and occasionally nutritional information as well. Ideally, every item would feature both a picture and full nutritional information, including ingredients.</P><P>Buying items is easy, just click the Buy button next to an item to add it to your cart in the right frame. The cart is currently sorted randomly, but HomeGrocer.com plans to fix that soon. Each item has a field next to it where you can change the quantity of each thing you want to buy. After you change the number of items, you <EM>must</EM> click the Update Subtotal button at the top of the right frame to change your subtotal. When you're done, the Checkout button in the right frame takes you to a confirmation page where you pick a delivery time and add any special instructions. A final click confirms the order and you're done.</P><P>Shopping for a week's worth of groceries took us about an hour the first time or two, but that time has dropped as we become more familiar with the HomeGrocer.com site and products. Since merely driving to and from the grocery store takes us 40 minutes, using HomeGrocer.com is a huge time savings. That's important for us these days, but it's also good because the Internet businesses that have done well are those that give you time.</P><P><STRONG>Selection</STRONG> -- Everyone asks us about HomeGrocer.com's selection and produce. Their selection is good, certainly comparable to normal grocery stores. It tends toward prepackaged food and well-known brands, but you can request missing items. I asked them to add 16 ounce cans of Minute Maid frozen orange juice and Huggies newborn diapers, along with ground pork and bulk spices. Three days later, I received email telling me that they'd added the orange juice and diapers and were working on the other requests. It's best to ask for specific items - requests like bulk spices tend to throw them.</P><P>People are suspicious of buying produce through HomeGrocer.com because the idea of someone else picking out your lettuce is initially dubious. But it turns out that HomeGrocer.com's produce is as good or better than produce at a normal supermarket, although it doesn't compare to the vegetables at a farmer's market we frequent in the summer. In a supermarket, the produce is tossed on the shelves, pawed over by shoppers, sprayed by those scary little water jets, left out in non-refrigerated displays, and then driven home in your non-refrigerated car. In contrast, HomeGrocer.com's produce goes straight from their refrigerated warehouse to the refrigerated truck to your kitchen, with minimal handling.</P><P>I do think HomeGrocer.com can go farther with specialty items, large sizes, and obscure products. Shelf space in a supermarket is important, so slow-selling speciality items don't receive much space, whereas (in the U.S. anyway) most supermarkets have an entire aisle devoted to oddly colored breakfast cereal. Since HomeGrocer.com has essentially no limitation on shelf space, they should be able to offer a wider selection of uncommon products.</P><P>Although it's never guaranteed, HomeGrocer.com occasionally just gives you additional stuff. Your first order gets a bag of free produce, and our driver also gave us a baguette. Another time, we received 50 1-cent makeup stamps to account for the new U.S. first class letter postal rates, and for Valentine's Day, they gave us daffodils. Small touches like this cost little and help ensure customer loyalty and strong word of mouth. HomeGrocer.com also encourages word of mouth references by giving the referrers $20 of free groceries for each new customer. Heck, if just a few TidBITS readers list us as the reason for signing up with HomeGrocer.com, TidBITS could be directly responsible for putting food on our table!</P><P><STRONG>Prices</STRONG> -- HomeGrocer.com's prices are comparable with the more expensive supermarkets in the area. You can find cheaper prices if you drive around and shop sales, but then you have to factor your time and mileage into the cost. For minimizing costs, it's important to avoid the delivery fee, which HomeGrocer.com waives if you order more than $75 of groceries. When we're near $65, I buy a bottle of wine or something we'll use eventually. Even though we tend to bulk up our order to hit $75, we do almost no impulse buying, which lowers our weekly grocery bills.</P><P><STRONG>Delivery</STRONG> -- The delivery process works well. HomeGrocer.com has a fleet of trucks painted with huge peach logos. You pick a 90 minute window for your delivery; so far we've been able to choose a delivery time the next day, though it's not guaranteed. Even after you've scheduled a delivery, you can add or remove items until 11:00 PM the night before the delivery.</P><P>We've been impressed by HomeGrocer.com's delivery people. They have all been bright, personable, and chatty. Delivering to our house is tricky, since we live at the end of a very steep, mile-long, one lane road. The drivers have all treated it with good humor; we even received a card from one driver thanking us and neighbors who had helped her turn around for being so understanding.</P><P>Finally, it's more efficient to have a single truck delivering groceries to a bunch of people than it is for everyone to drive to the store. One driver commented that she'd driven 76 miles for 7 stops in a rural area (10.9 miles per stop), but another driver had that day done 18 stops in 42 miles (2.3 miles per stop). Even considering that the trucks get worse gas mileage and pollute more than commuter cars, I suspect these trucks are better for the environment.</P><P><STRONG>Audience</STRONG> -- HomeGrocer.com isn't for everyone. If you can't hit $75 per order, the $10 delivery fee may not be worthwhile. If you aren't home to receive orders reliably, you can pick them up at HomeGrocer.com's warehouse or have them delivered to your work, but if that's not convenient, you're out of luck.</P><P>Some groups should investigate HomeGrocer.com or similar services. I've seen references to HomeGrocer.com on a multiple sclerosis resources Web page, and anyone who's homebound could benefit from grocery delivery. We started using them because we didn't want to traipse around a grocery store with a baby, but I've also heard of parents who prefer HomeGrocer.com because it's easier than keeping children away from the candy in the checkout line.</P><P>HomeGrocer.com relies on JavaScript for its shopping cart functionality and uses cookies to track the state of your shopping session, so people who won't use JavaScript and refuse cookies won't be able to use HomeGrocer.com. However, the company has a strong privacy policy that protects your registration information and tracks shopping patterns only in the aggregate (like most other Web sites analyze their logs). Better yet, HomeGrocer.com explicitly says it will never trade or sell your information to any other party.</P><P>No matter what your specific situation, if you're reading this, you're probably sufficiently Internet-savvy to consider a service like HomeGrocer.com. You might as well - I think it's a foregone conclusion that the Internet will become the preferred marketplace for commodity items. After all, how many people <EM>enjoy</EM> shopping for basic groceries?</P><!-- Groceries in the Mist Adam C. Engst --></div>
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<div class="featured_meta"><div class="meta_article">16 Aug 1999 | <a href="/article/5510?print_version=1">Print <span class="shift_up"><img src="/images/printer_icon.gif" alt="Printer-Friendly Version of This Article" border="0" width="9" height="10"></span></a></div></div>
<H2><a href="/article/5510">Internet Grocery Shopping Continues to Mature</a></H2>
<div id="article_blurb_4185"><p>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<span class="readmore_series"><a href="javascript:void(0)" onClick="return showhide_article('4185')">Show full article</a></span></p></div>
<div id="article_text_4185" style="display:none"><p class="showhide_all_series"><a href="javascript:void(0)" onClick="return showhide_article('4185')">Hide full article</a></p><P>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.</P><P><<A HREF="http://db.tidbits.com/article/05303">http://db.tidbits.com/article/05303</A>><BR><<A HREF="http://db.tidbits.com/getbits.acgi?tlkthrd=623">http://db.tidbits.com/getbits.acgi?tlkthrd=623</A>></P><P><STRONG>Update on HomeGrocer.com</STRONG> -- 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.</P><P><<A HREF="http://www.homegrocer.com/">http://www.homegrocer.com/</A>></P><P>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.</P><P>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.</P><P>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.</P><P><STRONG>The Competition</STRONG> -- 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.</P><P><<A HREF="http://www.peapod.com/">http://www.peapod.com/</A>></P><P>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.</P><P><<A HREF="http://www.webvan.com/">http://www.webvan.com/</A>></P><P>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.</P><P><STRONG>Societal Aspects of Internet Groceries</STRONG> -- 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.</P><P>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.</P><P>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.</P><P>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.</P><P>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.</P><P>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.</P><P>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.</P><!-- Internet Grocery Shopping Continues to Mature Adam C. Engst --></div>
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<div id="article_blurb_4646"><p>Webvan Buys HomeGrocer.com -- The online supermarket industry has started its consolidation, with the California-based Webvan buying Washington-based HomeGrocer.com for about $1 billion in stock<span class="readmore_series"><a href="javascript:void(0)" onClick="return showhide_article('4646')">Show full article</a></span></p></div>
<div id="article_text_4646" style="display:none"><p class="showhide_all_series"><a href="javascript:void(0)" onClick="return showhide_article('4646')">Hide full article</a></p><P><STRONG>Webvan Buys HomeGrocer.com</STRONG> -- The online supermarket industry has started its consolidation, with the California-based Webvan buying Washington-based HomeGrocer.com for about $1 billion in stock. (See "Groceries in the Mist" in <A HREF="http://www.tidbits.com/tb-issues/TidBITS-470.html">TidBITS-470</A> for a look at HomeGrocer.com.) The combined company will serve thirteen major metropolitan areas by the end of the year (Atlanta, Baltimore, Bergen County (NJ), Chicago, Dallas, Los Angeles, Orange County (CA), Portland (OR), Sacramento, San Diego, San Francisco, Seattle, and Washington, D.C.) and be in a good position to dominate the Internet grocery business, ahead of companies like Peapod and Streamline.com and the efforts of traditional supermarket chains, such as Albertson's in the Seattle area. However, even though the companies expect their merger to save $200 million in capital investments, delivering groceries still requires massive infrastructure costs in a business that traditionally suffers from razor thin margins. With Jupiter Communications estimating $7.5 billion in online grocery sales by 2003, there's no question that online grocery shopping will succeed, but the players may change significantly by the time the dust settles. But the main problem with this merger? Webvan isn't nearly as good a name as HomeGrocer - what <EM>is</EM> a webvan, anyway? [ACE]</P><P><<A HREF="http://www.webvan.com/">http://www.webvan.com/</A>><BR><<A HREF="http://www.homegrocer.com/">http://www.homegrocer.com/</A>><BR><<A HREF="http://db.tidbits.com/article/05303">http://db.tidbits.com/article/05303</A>><BR><<A HREF="http://www.peapod.com/">http://www.peapod.com/</A>><BR><<A HREF="http://www.streamline.com/">http://www.streamline.com/</A>><BR><<A HREF="http://www.albertsons.com/">http://www.albertsons.com/</A>></P><!-- Webvan Buys HomeGrocer.com Adam C. Engst --></div>
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<div class="featured_meta"><div class="meta_article">30 Oct 2000 | <a href="/article/6174?print_version=1">Print <span class="shift_up"><img src="/images/printer_icon.gif" alt="Printer-Friendly Version of This Article" border="0" width="9" height="10"></span></a></div></div>
<H2><a href="/article/6174">Priceline.com Ceases Bidding on Groceries</a></H2>
<div id="article_blurb_4816"><p>Priceline.com Ceases Bidding on Groceries -- In "Name That Price on Priceline.com!" in TidBITS-499, we wrote about a good experience (not since repeated) with purchasing airline tickets through Priceline.com's auction approach<span class="readmore_series"><a href="javascript:void(0)" onClick="return showhide_article('4816')">Show full article</a></span></p></div>
<div id="article_text_4816" style="display:none"><p class="showhide_all_series"><a href="javascript:void(0)" onClick="return showhide_article('4816')">Hide full article</a></p><P><STRONG>Priceline.com Ceases Bidding on Groceries</STRONG> -- In "Name That Price on Priceline.com!" in <A HREF="http://www.tidbits.com/tb-issues/TidBITS-499.html">TidBITS-499</A>, we wrote about a good experience (not since repeated) with purchasing airline tickets through Priceline.com's auction approach. We also looked at Priceline.com's WebHouse Club program for buying groceries and gasoline through a similar method of bidding on low price. Though we have been extremely positive about the utility of shopping for groceries online through firms like HomeGrocer.com (now owned by Webvan), the WebHouse Club program made no sense at all to us. Now, after less than a year of operation, Priceline.com is closing down the WebHouse Club program (though none of the company's other services). The moral of the story? Different goods require different business models, whether or not the Internet is involved. [ACE]</P><P><<A HREF="http://db.tidbits.com/article/05575">http://db.tidbits.com/article/05575</A>><BR><<A HREF="http://db.tidbits.com/article/05303">http://db.tidbits.com/article/05303</A>><BR><<A HREF="http://www.priceline.com/infoctr/update.asp">http://www.priceline.com/infoctr/update.asp</A>></P><!-- Priceline.com Ceases Bidding on Groceries Adam C. Engst --></div>
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<div class="featured_meta"><div class="meta_article">20 Nov 2000 | <a href="/article/6208?print_version=1">Print <span class="shift_up"><img src="/images/printer_icon.gif" alt="Printer-Friendly Version of This Article" border="0" width="9" height="10"></span></a></div></div>
<H2><a href="/article/6208">Internet Grocers Drop Like Flies</a></H2>
<div id="article_blurb_4850"><p>Internet Grocers Drop Like Flies -- Could Internet grocery shopping be the kind of service that appeals greatly to a few while failing to attract the necessary mass market to survive? Last week, ShopLink, an Internet grocer serving several states in the northeast U.S., shut its site down abruptly, and Streamline, another Internet grocer targeting the east coast, announced that it too would be closing up shop on 22-Nov-00<span class="readmore_series"><a href="javascript:void(0)" onClick="return showhide_article('4850')">Show full article</a></span></p></div>
<div id="article_text_4850" style="display:none"><p class="showhide_all_series"><a href="javascript:void(0)" onClick="return showhide_article('4850')">Hide full article</a></p><P><STRONG>Internet Grocers Drop Like Flies</STRONG> -- Could Internet grocery shopping be the kind of service that appeals greatly to a few while failing to attract the necessary mass market to survive? Last week, ShopLink, an Internet grocer serving several states in the northeast U.S., shut its site down abruptly, and Streamline, another Internet grocer targeting the east coast, announced that it too would be closing up shop on 22-Nov-00. These closures follow the demise of Priceline.com's WebHouse Club grocery bidding site, which at least had the excuse of being a silly idea. The remaining big fish are Webvan (which recently bought HomeGrocer.com, its next-largest rival), Peapod (which two months ago purchased Streamline's operations in Chicago and Washington, D.C.), and the Texas-based GroceryWorks (which has investment from and an alliance with grocery giant Safeway). There's undoubtedly a link between the ills of the Internet grocers and the recent performance of the dot-coms, with a number of high-profile failures including Pets.com, Furniture.com, and MotherNature.com. But if the rise of Internet grocers causes traditional supermarkets to offer Internet ordering and home delivery, consumers will have won in the end. [ACE]</P><P><<A HREF="http://db.tidbits.com/series/1184">http://db.tidbits.com/series/1184</A>></P><!-- Internet Grocers Drop Like Flies Adam C. Engst --></div>
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<div id="article_blurb_5099"><p>Webvan Announces Shutdown and Chapter 11 -- Internet grocer Webvan announced today that it has ceased operations and is filing for Chapter 11 bankruptcy protection<span class="readmore_series"><a href="javascript:void(0)" onClick="return showhide_article('5099')">Show full article</a></span></p></div>
<div id="article_text_5099" style="display:none"><p class="showhide_all_series"><a href="javascript:void(0)" onClick="return showhide_article('5099')">Hide full article</a></p><P><STRONG>Webvan Announces Shutdown and Chapter 11</STRONG> -- Internet grocer Webvan announced today that it has ceased operations and is filing for Chapter 11 bankruptcy protection. It has laid off its 2,000 employees and expects to delist its stock on NASDAQ. Though we're sad to see Webvan fail, the event comes as little surprise, since Webvan has encountered numerous financial problems and never matched the quality of Seattle's HomeGrocer.com, which Webvan acquired a year ago (see our article series on Internet grocery shopping for details). [JLC]</P><P><<A HREF="http://www.webvan.com/">http://www.webvan.com/</A>><BR><<A HREF="http://www.reuters.com/news_article.jhtml?type=internetnews&StoryID=108866">http://www.reuters.com/news_article.jhtml? type=internetnews&StoryID=108866</A>><BR><<A HREF="http://db.tidbits.com/series/1184">http://db.tidbits.com/series/1184</A>></P><!-- Webvan Announces Shutdown and Chapter 11 Jeff Carlson --></div>
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<div id="article_blurb_5109"><p>Last week's demise of Webvan came as absolutely no surprise to Tonya and me, since we'd been Webvan customers - for a while - after their acquisition of HomeGrocer a year ago<span class="readmore_series"><a href="javascript:void(0)" onClick="return showhide_article('5109')">Show full article</a></span></p></div>
<div id="article_text_5109" style="display:none"><p class="showhide_all_series"><a href="javascript:void(0)" onClick="return showhide_article('5109')">Hide full article</a></p><P>Last week's demise of Webvan came as absolutely no surprise to Tonya and me, since we'd been Webvan customers - for a while - after their acquisition of HomeGrocer a year ago. We'd seen the differences in the way the two companies did business, and while HomeGrocer certainly had an uphill battle to survive, Webvan seemed set on driving the company out of business. Here are a few of the many places they went wrong, particularly in comparison with HomeGrocer, the Seattle-based service that got us turned on to Internet grocery shopping in the first place.</P><P><<A HREF="http://db.tidbits.com/series/1184">http://db.tidbits.com/series/1184</A>></P><P><STRONG>Too Much Money to Burn</STRONG> -- I've seen differing numbers for the amount of money that Webvan burned through, but it's between $800 million and $1 billion. That's a lot of money, and is indicative, I think, of both the exuberance of the Internet investment community when Webvan started and the belief that any sort of shopping could be done better on the Internet than in person. Significant investment is normally a good thing, but in this case the vast sums acted to Webvan's detriment, not to mention the detriment of the entire industry. Webvan used its money in two basic ways: to build up an expensive infrastructure and to expand rapidly across the country.</P><P>Webvan spent huge sums on high-tech warehouses that were designed to revolutionize distribution, but they turned out to be mostly a waste of money. The problem is that all the technology was meant to reduce labor costs, and labor is relatively cheap. Worse, Webvan designed the warehouses so they could scale to 8,000 orders per day, but that's a lot of unnecessary expense when you're receiving less than half that many orders. So Webvan would spend something like $35 million on a warehouse, whereas HomeGrocer spent only about $15 million for a much less automated warehouse - you can buy a lot of labor for $20 million. The fancy warehouses didn't even necessarily work better. For instance, Webvan created an automated freezer room that required only a single employee to pick items for customer orders. But since the freezer room was in fact <EM>freezing</EM>, no one could stay in there for more than a few minutes without suffering hypothermia. In contrast, HomeGrocer's low-tech freezer rooms worked fine, since the pickers could quickly run in and out to get the necessary items and stay warm in the process.</P><P><STRONG>Infinite Expansion Creates Infinite Dilution</STRONG> -- The grandiose expansion plans Webvan executed even in the face of the dot-com bubble bursting were problematic at best. Most significantly, they put pressure on competing Internet grocers in those markets. In an established, profitable business, pressuring competitors in key markets makes sense, but in a situation where everyone is losing massive sums of money in attempts to gain market share, forcing head-to-head competition just makes it all the more likely that everyone will fail. Numerous high-flying Internet grocers such as ShopLink, Streamline, and, most recently, HomeRuns have fallen by the wayside in vain attempts to compete with one another while trying to set themselves apart from the traditional grocery stores.</P><P><<A HREF="http://db.tidbits.com/article/06208">http://db.tidbits.com/article/06208</A>></P><P>The incredibly complex logistics surrounding Webvan's expansion plans also made it difficult for management to concentrate on the basic business of serving the customer. (In this case, I'll give them the benefit of the doubt and assume they were distracted, not just incompetent, though as you'll see, opinions vary on that count.) We'd had essentially no complaints with HomeGrocer, particularly in terms of customer service, where they always answered their email promptly and were great about providing refunds for the occasional mistake or damaged food. As Webvan took over, our exchanges with customer service gradually became more and more generic, until the last few, which disappeared into the ether.</P><P>The final straw for us, though, was when produce quality started to suffer. HomeGrocer employees had always done a good job at picking good produce, so you didn't feel as though you were losing anything by letting them pick out your peppers and apples. After we received an entire bag of rotten oranges and were subsequently ignored by customer service, we decided to patronize local grocery stores once again. It's entirely possible that Webvan was buying inferior produce in an attempt to save money at that point, but one of our drivers said that orders were being picked by temporary employees with no incentive to do a good job.</P><P><STRONG>Merge and Die</STRONG> -- Acquiring HomeGrocer was also a mistake. Though it made sense on the surface, Webvan botched the acquisition almost entirely, failing to merge the organizations in some ways and overriding HomeGrocer's leaner approach in others. One painfully obvious mistake was eliminating HomeGrocer's widely recognized peach logo on the delivery trucks frequenting Seattle's congested freeways. The peach immediately conveyed the idea of delivering fresh food, whereas Webvan's unremarkable, characterless "W" logo indicated, well, nothing. Tonya and I jokingly awarded each other "peach points" for being the first to spot a HomeGrocer truck while driving; after the change, we mostly didn't even notice Webvan trucks. And as we complained to our drivers after the trucks were repainted, they threw away a brand that even toddlers like Tristan recognized.</P><P><<A HREF="http://db.tidbits.com/article/06004">http://db.tidbits.com/article/06004</A>></P><P>If it looked bad from the outside, it was worse inside. HomeGrocer founder Terry Drayton, who left HomeGrocer a month before the acquisition, has been widely quoted as saying, "All I can say is that I am astonished at how staggeringly incompetent [the Webvan management has] proven to be. In our wildest dreams we never imagined that they would be this bad." After the acquisition, morale among the HomeGrocer employees dropped precipitously, to the point where they were openly disgusted with management changes. In the early days of HomeGrocer, the drivers were excited by what they were doing, and that excitement encouraged customers to have faith in the then-unusual notion of buying groceries online. The difference in attitude after the acquisition was particularly shocking.</P><P><<A HREF="http://www.thestandard.com/article/0,1902,27911,00.html">http://www.thestandard.com/article/ 0,1902,27911,00.html</A>></P><P><STRONG>Was Survival an Option?</STRONG> If Webvan had held onto much of its money, spent the remainder wisely, concentrated on its original San Francisco area market, and expanded carefully once it had perfected its model, the company might still be around today. The drive to capture market share that was so prevalent in the exuberant days of Internet commerce makes sense in some fields, but in the grocery field, where margins are razor-thin, it's difficult to see how an unprofitable business model can easily be turned into a money-making one if only there are enough people ordering - 750,000 in Webvan's case. (It's a perfect example of the saying: "We lose money on every sale, but we make up for it in volume.")</P><P>More interesting is the question of whether HomeGrocer could have survived if the acquisition hadn't happened. The company was still losing money at the time Webvan came knocking, but customer loyalty in Seattle was extremely high, they had great brand recognition, and they hadn't lost sight of the fact that their customer service had to win over people who were utterly accustomed to visiting physical grocery stores every week. Terry Drayton has even talked about bringing HomeGrocer back, and although we're no longer in Seattle to take advantage of it if he does, I'd certainly encourage him to give it a try.</P><P><<A HREF="http://seattlep-i.nwsource.com/business/30729_drayton10.shtml">http://seattlep-i.nwsource.com/business/30729_ drayton10.shtml</A>></P><P>Despite the tremendous failures of Webvan and so many other Internet grocers, it strikes me that the lesson is not that Internet grocery shopping can't succeed, but that it requires tremendous care and attention to detail when working out the business model. As indication that it's here to stay, look no further than traditional grocery stores, which are continuing their limited forays into Internet grocery shopping. Albertsons has slowly expanded their coverage for delivery of orders place over the Internet, the Dutch grocery chain Royal Ahold has a controlling stake in Peapod, and Safeway has a significant investment in Texas-based GroceryWorks. GroceryWorks also just received more money from the UK's Tesco supermarket chain, which apparently has done a good job of making its Internet delivery service profitable.</P><P><<A HREF="http://www.albertsons.com/">http://www.albertsons.com/</A>><BR><<A HREF="http://www.peapod.com/">http://www.peapod.com/</A>><BR><<A HREF="http://www.safeway.com/">http://www.safeway.com/</A>><BR><<A HREF="http://www.groceryworks.com/">http://www.groceryworks.com/</A>><BR><<A HREF="http://www.tesco.com/">http://www.tesco.com/</A>></P><P>In fact, the moral may be that creating a new distribution network and stocking warehouses simply costs too much when much of the infrastructure is already available from existing supermarket chains. That may be bad news for Terry Drayton in any attempts to revitalize HomeGrocer, but I think the communities that can take advantage of Internet grocery shopping will appreciate the services no matter who provides them.</P><!-- Where Webvan Went Wrong Adam C. Engst --></div>
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<div class="featured_meta"><div class="meta_article"><a href="/index.cgi?tbcat=16" class="category">Just for Fun</a> <a href="javascript:void(0)" onClick='markdown_copy("", "11 December 2007", "9356")'>|</a> 11 Dec 2007 | <a href="javascript:void(0)" onClick="open_podcast_window('http://db.tidbits.com/podcasts/9356.m4a')" title="Listen to an audio version of this article">Listen <span class="imglift"><img src="/images/listen_icon4.gif" width="12" height="10" border="0"></span></a> | <a href="/article/9356?print_version=1">Print <span class="shift_up"><img src="/images/printer_icon.gif" alt="Printer-Friendly Version of This Article" border="0" width="9" height="10"></span></a></div></div>
<H2><a href="/article/9356">Amazon Delivers Like It's 1999</a></H2>
<div id="article_blurb_8240"><p>A new grocery delivery service from Amazon being tested in Seattle reminds this author of the heyday of the early dot-com era. This time, however, there's a chance for a company to make money.<span class="readmore_series"><a href="javascript:void(0)" onClick="return showhide_article('8240')">Show full article</a></span></p></div>
<div id="article_text_8240" style="display:none"><p class="showhide_all_series"><a href="javascript:void(0)" onClick="return showhide_article('8240')">Hide full article</a></p><p>Seventy-five percent of my family recently suffered an awful virus: emesis, to be polite about it, followed by fever which laid low first our toddler Ben, then our baby Rex, then yours truly. My wife Lynn was initially untouched - the fever eventually hit her after I'd recovered - and so had to minister to a lot of sickos. </p>
<p>The cupboard was already a bit bare, and she was trying to sort out how to get some more food in the house even with Ben (now well) back in childcare - she didn't want to take the baby out in public and expose others, and I wasn't well enough to look after him on my own. Despite my addled state, I recalled that we could get groceries delivered via a new Amazon.com service in testing in Seattle: <a href="https://fresh.amazon.com/">Amazon Fresh</a>. (Lynn fortunately didn't think I was having hallucinations that flashed me back to the dot-com era.)</p>
<p>Your first thought, like mine, is probably, "Great. They're taking an idea that failed dramatically several years ago and throwing more money at it." (See "<a href="http://db.tidbits.com/series/1184">Groceries in Our Midst</a>" for TidBITS coverage of HomeGrocer, Webvan, and other grocery delivery services.) But I think Amazon occupies a unique position in the marketplace that could allow them to succeed where Webvan and others failed. Amazon already ships millions of items a day. </p>
<p>It's not that strange to think that instead of using UPS, USPS, and other shippers, Amazon could direct some of the shipping to their own operations by throwing groceries into the mix. Grocery stores have extremely thin margins, as little as 1 to 2 percent, and require huge volume to produce any reasonable return.</p>
<p>If you can add in the high-margin items that Amazon already sells, conserve shipping through internal operations (thus shifting the few dollars an item from shipping companies to your own trucking fleet), and add grocery to provide regular neighborhood stops and a tiny margin, you might have a winning model.</p>
<p>It's also worth noting that there are still many grocery delivery services, often run by major chains, that typically charge a fee for deliveries of any size. The idea became more widespread but less interesting after Webvan's spectacular crash. One of the crummier supermarket chains, Albertson's, has <a href="https://www.albertsons.com/delivery.asp?">online ordering for home delivery in several cities</a>, for instance.</p>
<p>Amazon could combine some of the best aspects of its own massive warehousing of products, of <a href="http://en.wikipedia.org/wiki/Kozmo">Kozmo</a> (a totally ridiculous snack and small-item delivery service that I loved; ironically, Kozmo was funded in part by Amazon), and grocery delivery. Consider ordering a DVD and having it delivered along with broccoli later the same day. That's not a new idea, but it requires a lot of scale and infrastructure to carry out with the potential of profit.</p>
<p>In this test phase of Amazon Fresh, the company offers three delivery options: unattended delivery before 6 AM or between 7 PM and 10 PM; attended delivery in one-hour blocks between 7 AM and 10 PM; and pick-up service at a few limited locations, many of which are currently within corporations like Google, available only to employees.</p>
<p>The unattended service has a $25 minimum purchase to avoid a $9.95 service charge; attended service requires $50 or more in an order for free delivery; pick-up service is always free. You can place an order for attended delivery or pre-dawn delivery by midnight the night before; for after-dinner delivery by noon the same day; and for pick up as little as four hours in advance.</p>
<p>We placed an order in the afternoon for delivery in the 8 to 9 AM slot the next day. The driver arrived in a spiffy new truck around 8:10 AM. He offered to bring the bags in, but with Lynn and the baby asleep and the miasma of virus, I suggested he leave them on the porch.</p>
<p>Pricing is comparable to Whole Foods, which many people also call "Whole Paycheck." Whole Foods tends to have the highest prices for foods we buy regularly; we often cycle through Trader Joe's, QFC (a division of Kroger), and PCC, a local food co-op, to get the best deals. Unless Amazon is more competitive on pricing, we'll use it only in a pinch.</p>
<p>Now, I can't predict if Amazon really will shift shipping to its own trucks, or whether this isn't just a small-scale test that they'll never roll out. All I know is that with a house full of sick people, I'm glad to be living in what seems to be the past with the promise of the future.</p></div>
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