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Publix supermarkets to offer online ordering
Can Southeast-based grocery succeed in profiting where so many others have failed?
Wed, Aug 11 2010 at 1:02 PM
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Image via Wikimedia Commons
In Tampa and Atlanta, Publix customers will soon be able to order their groceries online for pick up at a store location of their choice. A boon for busy folks who don't want to spend time shopping for groceries but still want fresh food, the new service is set to debut at the Toco Hills store in Atlanta on Aug. 9. No minimum is required, though a $7.99 handling fee will be tacked on to every order, regardless of size.
For now, this service is a test, and considering how many companies have failed at the seemingly simple idea of grocery delivery in the past (including Publix itself, with its now-defunct Publix Direct service), it's a wise move by the grocery giant to take it slowly.
Huge losses have made the online grocery business a cautionary tale; Kozmo, founded in NYC in 1998 by venture capitalists, promised home delivery within an hour via bike, car, truck or foot for urbanites in Portland, Boston, San Francisco, Atlanta and other cities. After allegations of racism surfaced (the company was later exonerated), the company spectacularly flamed out. It was only able to capture the not-big-enough student and young professional market. The company lost $23.6 million, despite initial heavy capital investment of $250 million and plenty of promotion. The failure was blamed on the dot-com bubble bursting, but some analysts said the model itself was flawed; there was just no way to make money delivering small-value items to disparate populations, even in urban environments.
Similarly, WebVan, based near Silicon Valley, went bankrupt in 2001 because it couldn't profit from its 'credit and delivery' service which promised drop-off within 30 minutes. At its peak, WebVan also operated in Atlanta, Dallas, San Diego, Los Angeles and others. Also WebVan was initially well-invested, critics say the company spent too much in infrastructure investment before the business got going, and when it never did, major losses ensued. But companies keep trying the idea, and with millions more people online in every age group, and high-speed Internet widely available, perhaps it was just an idea ahead of its time.
Fresh Direct is probably the most successful version of the grocery-delivery biz, but the company only operates within the lucrative (and very concentrated) population of New York City, where hauling the basics home can be a strain, and delivery services are commonly used in other categories. Zifty.com delivers DVDs, magazines, snack foods and restaurant to-go orders, but not groceries, and Peapod by Stop & Shop (which has a minimum order of $75 and a fee of $11.95) serves the Northeast, New York, New Jersey, parts of Maryland and Virginia, and Chicago. Interestingly, the bulk of the delivery services that have been successful existed before the rise of the Internet. Peapod was founded in 1989, and Mr. Case in Toronto started up in 1984 and both still profit today.
Publix runs more than 1,000 stores in Florida, Georgia, South Carolina, Alabama and Tennessee. The chain operates 145 stores in the Atlanta area alone. Perhaps the time is finally right for low-cost home delivery of groceries ordered online. Considering Publix has already tried and failed in this area, they could be poised to do it right this time around.
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I AM DISABLE, AND IT IS VERY HARD FOR ME TO LIFT MY BAGS, FROM MY CAR PARING LOT TO MY DOOR. I WOULD LOVE TO HAVE PUBLIX CARE ENOUGH TO PROVIDE DIRECT DELIVERY. THANK YOU SO MUCH.
I live in South Daytona and am in a wheechair. I would love delivery service because I can't get out and bring home all the groceries I need. I am a senior citizen and this would be a wonderful help to me.
i and so many others would definitely use this service. we are located in pal beach gardens florida and love publix. however i am inable to drive and am looking for a delivery service.
My mother used the delivery service from King Soopers when she lived in Colorado. It was convenient for her because she had no transportation and was disabled. She often complained about substitutions though.
I lived in the suburbs of NYC for the last 3 years and used Peapod weekly. They do not charge $11.95 as the article states but $6.99 under $100 and $9.99 over $100. Their services is excellent. I now live in S. Florida and would love to have that service through Publix which is one of the best supermarket chains in the country. Offer the service Publix and I'll be waiting to sign up!
Peapod here is very popular but the fee here (in the Chicago suburbs) is 11.95 for over 150.00 and 17.95 for orders under 150.00. (with a 75.00 minimum) There is a fuel surcharge as well.
The fee in Manhattan is 9.95 over 150 and 11.95 under 150.00 but over 75.
I suspect that the price varies quite a bit depending on zip code and local labor prices. I also know that it seems fairly easy to get a coupon to cover their fee-but most of those seem to be first time orders.
I did not know the Publix stores offered delivery service until I saw the ad in the paper announcing the discontinuation of the service. I was heartbroken as my husband was ill and it would have been so nice. He is now deceased and this service would be a Godsend. Please re-instate it. Please.
I have used their delivery service in the past .... and... it was wonderful...
I would use it again if they start delivering in my area.... I would be the first
person probably
With online marketing strategies, such as a large article marketing campaign, banner advertising as well as local TV ads, companies like fresh direct were able to get the buzz going.
Of course targeting "the lucrative (and very concentrated) population of New York City" certainly did not hurt them.
I think Fresh Direct is a great service. I use them often here in NYC.