NET.WORKING: Making e-commerce part of everyday life

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Of all the many ways e-commerce will transform American life, the most important to me by far has been in the realm of food and sundries. Those of you with kids will especially relate to the great time-saving value of this: My family no longer goes to the supermarket to do that weekly shopping nightmare.

Instead we just dial in our order via Peapod, perhaps the most successful of the fledgling online grocery-shopping services, and one of their drivers brings our groceries right into our kitchen. We have been Peapod members for years now, to the point where the kids no longer ask when we're going shopping; they just want to know when Peapod's coming.

I mention this not simply to rub it in, but because I realized recently that Peapod doesn't even seem like so-called "e-commerce" to me anymore. It's just the way we shop. And the reasons for that acceptance are crucial for other transactional online businesses to understand.

The first lesson, and by far the most important, is the extremely high priority Peapod places on customer service. This sounds like a cliche, I know, but Peapod takes this to a new level for any online entity I've dealt with.

For example, a Peapod representative will call you by phone if they have to make any substitutions in your order. If they're running late on delivery (they promise delivery within a two-hour window), they'll call and let you know. No matter where you live, even in a three-floor walk-up, they'll carry your groceries to wherever you want them. And in my experience, their representatives have been unfailingly friendly and polite.

What are the real-world lessons here for other online companies?

1) Just because you do business via computer, don't be afraid to use the telephone to strengthen the connection. Peapod's phone calls are a key part of keeping the service running smoothly. Sure, the service could offer customers some kind of "online tracking" of their order, but that pales in comparison to a real person helping you out on the phone.

2) There are opportunities for upselling, simply via the service element. People will pay extra for extra service, particularly if it saves them real time and hassle. Peapod charges a $4.95 monthly membership fee, plus a per-order fee of $4.95 and 5% of the order. For a $100 order, that comes to about a $10 surcharge to have someone else do your weekly shopping trip. For many people, not only is that worth it, but to free up even more time, they'll pay another $4.95 to have the groceries delivered within a precise half-hour window. There are extra revenue streams for the taking here.

3) Constant communication minimizes churn in the membership base. Here, of course, you only need to look at America Online for the complete opposite in philosophy. I've never considered leaving Peapod, but on the other hand, last Christmas I sent a service-oriented e-mail to Epson about one of their printers and never heard back. The company finally responded with a vague apology literally a month later, and I went out and bought a Hewlett-Packard printer instead. You mess around with customer service at your peril.

Admittedly, Peapod is still in a growth and testing phase, only in seven cities so far, and whether the company will maintain this level of service as it grows remains to be seen. But for now, it is a shining example of the right way to do business online.

David Klein is associate publisher-editor of the Ad Age Group. He can be reached at

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