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Netgrocer - Supermarkets on the Web

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Nick Anis

Netgrocer Brings Grocery Stores to the Internet

Seven years ago Daniel Nissan left Tel-Aviv in Israel to work in New York City as a software marketing manager for a leading edge technology firm that was developing breakthrough telephony software for the Internet.

It wasn’t Daniel’s first visit to the US, but it was his first experience living and working in NYC. Nissan, a typical New Yorker, was on the lookout for a convenient way to shop for groceries that would save time and money.

After observing New Yorkers in midtown Manhattan doing their shopping, Nissan pondered an idea of his friend, Evan Yri. Yri’s plan was for people to be able to order their non-perishables, household supplies, and health and beauty aids at the convenience of their keyboard using the Internet. Nissan joined his friend’s company as President and Chief Executive Officer and in July 1997, and Yri’s dream became a reality with the launching of the Netgrocer service.

Aided by advances in Internet technology and an ever-growing user base of World Wide Web shoppers, Netgrocer entered the growing world of Internet Marketers where so far, there are more failures than successes.

Industry pundits acknowledge the explosive growth of the World Wide Web and the growing acceptance of users to transact business on it, but is Netgrocer an idea whose time has come? Home banking, for example had several false starts, and although it is finally gaining momentum, the jury is still out on if it will gain wide acceptance. Nissan is confident of Netgrocer’s success because of the enormous size of the grocery and health and beauty aid business. In this industry, even a small percentage is a large piece of business, because the market is so large," remarks Nissan.

The service has an intuitive HTML interface, which is actually a proprietary, sophisticated, but easy to use "shopping cart" system developed by Netgrocer’s development team. To use the NetGrocer service customers need:

  • A Web browser such as Netscape Navigator 4.x, Microsoft Internet Explorer 4.x, or AOL 3.0
  • An active connection to the Internet
  • A valid credit card

According to Nissan, shopping cart software was developed internally in order to be able to incorporate advanced shopping features into the Netgrocer service such as cart manipulation, shopping pattern recognition, user customized product sorting.

For example shoppers can change the quantities in their shopping cart, click on items in the cart to take a closer look, and so on without having to backtrack their steps. Netgrocer’s advanced pattern recognition feature makes it possible for the 2nd and succeeding shopping visits to the service to take five or ten minutes instead of the typical one to two hour process in the conventional supermarket. The My Netgrocer feature can provide an automatic shopping list for you every time, you shop. This feature can show you all the items you have purchased in whatever category you go to. It’s akin to taking everything off the shelf at the grocery store you don’t normally buy to make it easier to find the things you probably want – a store within a store based on your prior purchases.

Just think. No searching for a parking place, no dings in your car doors, and no pickup lines. You don’t have to comb your hair, shave, or get dressed. And best of all, even if you do, you don’t have to be offended by others who don’t. [g].

For suburban and rural customers, Netgrocer saves gas and vehicle emissions. For metropolitans, the service can save cab fares and tipping. For everyone, especially dual income families, the service saves time.

Contrary to what you might think, Netgrocer isn’t more expensive than the average grocery store, according to the company’s co-founder. "Netgrocer doesn’t just offer convenience and timesaving; our service is also a significant cost saver," remarks Nissan. The service offers its members everyday discount prices for a variety of popular brand name products. Speaking from the company’s executive offices in midtown Manhattan, Nison said: "The prices are especially competitive for people in expensive markets like midtown areas of major cities, vacation areas, rural communities, and for diplomats and service members living overseas."

Netgrocer is the first, and by far the largest, online grocery store serving tens of thousands of customers throughout the USA. Currently the service offers 7,500 items, which are purchased directly from manufacturers, and sold directly to consumers. By buying and selling direct Netgrocer can save the costs of accouterments such as fancy music and bright lights typically associated with retail-based food delivery systems, and pass on the savings to consumers.

A typical supermarket has 30,000 items but many of them are duplication – different versions of basically the same product. Netgrocer’s strategy is to offer the most popular sizes and brands in order to reduce their inventory carrying cost and keep their prices competitive. Certain items, such as laundry detergent, are offered in a larger range of sizes and brands to accommodate the varying needs of apartment dwellers versus homeowners and other contemporary consumer trends.

As any mail order marketer can tell you, economical, fast and reliable delivery is essential to the success of their service. Netgrocer chose Federal Express as its exclusive delivery mechanism. But users don’t have to pay exorbitant freight charges for this high service level. Fed X’s Express Saver service, (which typically arrives overnight), is guaranteed to arrive anywhere within 3 business days for $2.99 for orders under $50, and $4.99 for orders over $50. In order to take advantage of Fed X’s favorable rates, deliveries are limited to the 48 contiguous states and diplomatic pouches, APO, and FPO addresses (via three gateway cities). You can track the status of your order on the Netgrocer Website or using the tracking number you can check its progress at the Federal Express Website.

All shipments are done from the company’s 125,000 square foot warehouse in North Brunswick, New Jersey using a space age packing system developed by Sealed Air Corporation. Instead of Styrofoam chips, a special pillow is placed into the box. Two liquids are poured into compartments in the pillow. When the groceries are put into the box pressing against the pillow causes a chemical reaction between the two liquids. In less than a minute the mixture in the pillow hardens into form fitting foam. This packaging system works so well that even potato chips can be shipped this way without being broken and crumbled in shipment.

Netgrocer is a privately held firm. Sedant, formerly SEEUSEE International has purchased a 33% interest in the firm and holds options on additional shares. The service is growing at 50% – 100% per month as more users get onto the Internet and become comfortable with transacting on the Web.

Netgrocer takes full responsibility for any missing packages; but since the service was launched in June there has been only one case of a confirmed missing shipment, which was quickly corrected. There were a few others but they turned out to be customers putting Netgrocer’s tracking capabilities to the test.

Another aspect of this service will appeal to health conscious consumers. Each of the items offered is profiled with a photograph, description, price, sodium content, fat content, calories, and other nutritional information. Not only is this information provided for each item, but you can actually sort the products based on their price, brand name, category, sodium content, caloric content, or fat content.

Recurring purchases can be set up for products you use regularly, such as cat litter, diapers, formula, soap, shampoos, laundry detergent, toilet paper, and so on.

Normally, you avoid buying heavy items by mail, but with Netgrocer’s flat-rate freight, who cares! Netgrocer is a great way to purchase those bulky heavy items that you are sick and tired of lugging to and from the car and that frequently smush your Wonder Bread and mangle your vertebrae.

Another advantage is that customers can purchase items they are sometimes embarrassed about buying such as hemorrhoid remedies, Tampax, hair coloring, Rogain, etc. Hey, just because some pitchman spouts off about these things on television doesn’t mean everyone at the grocery store has to know you are using them, right?

There is no charge to sign up or use the service other than the price of the discounted merchandise. You sign up by pointing your web browser to http://www.netgrocer.com. The service offers a secured server for entering your credit card billing information. Members are issued an account ID number and password (which they can choose themselves). Any family member, employee, or friend you authorize can use this ID to make purchases.

There really isn’t much reason to fear using credit cards on the net. Under Federal law you are only liable for the first $50 of any unauthorized credit card use. Disputing a credit card charge is relatively easy; just call an 800 number and say the word. In comparison, getting a refund when you paid cash or after your check clears can be quite an ordeal.

Besides shopping for your household, you can also shop for kids away at college, or their grandparents, or send your order ahead to your vacation destination where groceries may be harder to find or more expensive. Travelers staying at efficiencies can also easily outfit their pantry this way.

The Netgrocer system takes a little getting used to at first and may require a few sessions to get acclimated. Cons: Selections are somewhat limited. The prices are competitive especially with metropolitan and remote areas, but not always as low as my local supermarket in the Southern California suburbs. Pros: Prices are lower for big cities, remote and resort areas. Delivery costs are lower than a typical round trip drive to your local grocery store. And the service offers a convenient way to do your shopping, especially for recurring items and special circumstances.

On balance, there certainly seems to be a market for this service. After trying it a few times you can log on and fill your shopping cart with whatever your want and have it delivered to your or your love one’s doorstep, gangplank, campsite, or whatever, with nothing more than a few points and clicks.

Netgrocer
333 7th avenue
11th floor
New York, NY 10001

Phone:  212-244-0031
Fax: 212-244-9893
www.netgrocer.com
Email: service@netgrocer.com

Sidebar:

Using the Netgrocer Website

Netgrocer’s website uses HTML frames. A static panel on the left gives you a view of your shopping cart. Items in the cart be viewed or changed at any time with a simple click of the mouse. The cart total is clearly displayed and a single click takes you to the checkout. A static panel on the top of the screen provides simple site navation. From there you can easily access the Grocery, Health and Beauty, Computer Software, Corporate Cupboard, Kid’s Corner, and Photo and Video departments. A site search and site map are also available here as well as access to "Shopper" shopping list searching function.

You do you actual shopping in the main panel. This panel displays Best Buys followed by the products in the department you selected. The product name, size, price are displayed. By default thumbnails are displayed of all products. The product thumbnails have links to enlargements, and there are also hotlinks to buy the product or get more information.

Immediately upon placing your order you receive an email confirmation. Once there is a Federal Express confirmation number it is also emailed to you. You can check your order status anytime by logging in the Netgrocer Website. Actually, you can do more than just check status. If it hasn’t shipped yet, you can modify it, reschedule, and cancel it. If it has shipped yet you can track it. If you like, you can even arrange to make the order a recurring.

The pages load relatively fast even though they may have several thumbnail graphics. There are hotlinks for downloading newer versions of Netscape Navigator and Microsoft Internet Explorer.

Netgrocer’s toll-free number is prominently displayed on the site. I called customer service for help with a cordless phone in one hand an a toothbrush in the other expecting to be on hold for several minutes listening to corny announcements. But, a rep was on the line so promptly I didn’t even have time to "spit" out my mouthful of Aim.

After a grabbled hello and a quick mouth rinse I asked him a few technical questions and would rate the customer service staff’s technical knowledge above average.

After shopping a few times, and going over the system with a critical eye I did find a few quirks. The Federal Express tracking pane doesn’t fit as nicely compared to their other panes, which are extraordinarily well laid out. The software isn’t compatible yet, with my special Surf Express Web cache software, but it can be easily disabled while shopping. One of my transactions didn’t go through, but to my surprise, I received a warning, and a screened popped up that allowed me to easily resubmit my transmission which was accepted. I suspect I was running too many browser windows at once. Overall, the Netgrocer Website’s design, layout, and navigation are quick good and the service’s shopping cart software is excellent.

Netgrocer
333 7th avenue
11th floor
New York, NY 10001

Phone:  212-244-0031
Fax: 212-244-9893
www.netgrocer.com
Email: service@netgrocer.com (customer service, general information)

Comments:

Email: nickanis@aol.com

Nick Anis is a computer and technology writer and the author of 24 books who also writes about travel, food & wine, entertainment, skiing and family recreation. He writes for Ziff-Davis, Microtimes, The Inland Valley Daily Bulletin, Travel Watch, TravelGram, and Restaurant-Row. He is responsible for the Restaurant Row Ethnic Dining Guide, co-published by the Long Beach Press Telegram. Nick is a member of the Computer Press Association, The International Food Wine, and Travel Writers Association (IFW&TWA), and the North American Ski Journalists Assn. (NASJA).

Nick can be reached at NickAnis@travel-watch.com, Phone: 909-860-6914, Fax: 909-396-0014.

 

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