HOME-SHOPPING TESTS SPREAD

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Major retailers and supermarket chains are increasingly betting that direct-order home-delivery services will appeal to a changing populace.

"The time constraints of dual-income families and an increasing elderly population coupled with the developing interactive technology are the driv-ing factors of this emerging trend," said Kevin Sheehan, president, Home Shopping Alternatives.

The Bethesda, Md., company is working with Wal-Mart Stores, which began a home-delivery test in October of general merchandise and groceries in Springfield, Mo.

Kmart Corp. started a similar test of general merchandise and prescriptions in Phoenix stores Nov. 7, and is working with another Bethesda-based shop-at-home service, Shoppers Express.

Wal-Mart and Kmart say they are starting same-day, home-delivery tests to boost sales and win customers. Both offer catalogs with about 6,000 items, and customers can place orders by phone or fax. In December, Kmart customers also can tap cyberspace to place orders through America Online; Wal-Mart's online ordering leap will happen by January.

Wal-Mart's Missouri shop-at-home test carries a $6.95 delivery charge, regardless of order size; Kmart's Arizona experiment charges $5.95 for general merchandise delivery and $2 for prescriptions. Neither would say whether they plan to expand the tests in which stores fill orders and home-delivery companies take them to customers.

"[The home-delivery market] is growing. The customer base is growing and there are increased sales for retailers. The average order for home delivery is significantly larger than an in-store purchase. Consumers buy larger-ticket items as well, so the gross margin [per transaction] is higher," said Jodi Searing, Shoppers Express marketing manager.

The $77 billion retail home-delivery industry, as estimated by new-media consultancy Jupiter Communications, New York, is expected to grow significantly to $134 billion by 2000.

About 20% to 40% of retail chain and supermarket sales will be generated through the home in about 10 years, according to data from industry consultants and analysts supplied to Home Shopping Alternatives.

Still another shopping service is Peapod, an Evanston, Ill., computer-based operation that works with supermarkets, offering phone, fax and online grocery shopping.

An average in-store purchase is about $20; an average Peapod purchase is $100-plus, said Andrew Parkinson, Peapod president.

"It is a growing need," said Les Copeland, public relations coordinator, Wal-Mart Stores. "The average age of consumers is rising across the country ... and dual-income families find it very difficult to come home and take care of the family and then shop."

"Consumers are time-pressed. It is a good convenience for seniors," said Mary Lorencz, Kmart manager of public and issues communications.

Kmart ran teaser ads from Meridian Retail, Troy, Mich., in Phoenix newspapers, and used in-store signage and catalog stands. Wal-Mart mailed catalogs to residents in its test area.

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