Magazine article Marketing

Delivering the Goods

Magazine article Marketing

Delivering the Goods

Article excerpt

New technology looks set to create a demand for grocery home shopping services, giving food retailers a massive logistical headache.

Although home shopping is one of the latest marketing buzzwords, it is not entirely new. Bill Bryson tells us in his book Made in America that by 1906 US mail-order business Sears Roebuck was so successful it needed 2000 workers to process the 900 sack-loads of orders it received daily. Such was the volume of business that the post office, railways and telegraph companies all opened branch offices at Sears Roebuck's Chicago headquarters.

What is new, however, is technology's potential to spark a massive upsurge in home shopping. The burgeoning number of electronic commerce sites on the Web may be just a taster of what is to come. It is the impending birth of digital TV that could well open the floodgates.

If digital TV delivers easy-to-use interactive technology that is readily accepted by the mass market, it could cause a revolutionary change in our shopping habits. For many, the weekly trudge up and down supermarket aisles may become a thing of the past. Instead, fresh produce and FMCG brands could be purchased from the comfort of home.

Should it be proven that this is what the public wants - and the indications are that it may be - then the supermarkets will have to provide it or risk a haemorrhage of consumers to rivals prepared to grasp the nettle. Some are already trialling home shopping using ordering channels such as the telephone, fax and Internet as a way of ironing out problems at an early stage.

Tesco began testing home shopping in September 1996. Shoppers in 11 areas can use the Internet to order groceries which are delivered in refrigerated vans for a [pounds]5 fee. With Tesco Direct, next-day delivery is possible for orders placed before 4pm.

Iceland, however, has gone further. It has invested in a fleet of 900 delivery vans able to store foods at ambient, chilled and frozen temperatures and now boasts a national home delivery service making 300,000 deliveries per month. Bearing in mind that Internet access among Iceland customers is low, orders are made by phone or fax.

Home shopping is clearly being taken seriously by the leading food retailers. But if it does catch onto the extent that many believe it will, there are huge logistical problems that will have to be overcome.

"The management of the logistics chain and success of delivery will be one of the big factors in the success of product-driven companies in the next century," says Ian Hughes, sales and marketing director of delivery solutions company Mail Marketing Group. …

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