Web grocery biz gets a new player

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Shoppers Express, bagging forays in interactive TV, online services, tries new route

After a series of experiments with Time Warner's Full Service Network and America Online, the Shoppers Express grocery delivery service is recasting itself for the Web.

The company--originally focused on shopping by phone or fax--next month will launch an Internet venue dubbed ShoppingLink.


"We've been skulking around assembling a team that has the know-how and drive to tap this market," said Richard Olson, president-CEO of Bethesda, Md.-based Shoppers Express, which last year merged with Norcross, Ga.-based ShopperVision, developer of a graphical interface for grocery shopping. Mr. Olson joined the company in January, from Procter & Gamble Co.

To get on the Web, Shoppers Express has had to write off some expensive experiments. The company initially created an interactive TV shopping service for the Full Service Network. Later, it tried home grocery shopping in a few markets with AOL.


ShoppingLink already has distribution and marketing arrangements with grocery chains in 19 markets across the country, including Vons Cos.' Pavilions in Los Angeles; Kroger Co. in Dallas; Winn-Dixie in Atlanta, Jacksonville, Fla., and Louisville, Ky.; and QFC in Seattle.

The service this month began testing has this month been conducting a beta test in Los Angeles and plans to launch there officially in May. The goal is to be in 11 markets by the third quarter.

ShoppingLink allows consumers to access product databases ranging from 20,000 to 50,000 products (depending on the retailer). Users can create custom shopping lists or search for specific products by brand, unit price, fat and calories as well as use electronic coupons.

Delivery is a flat $9.95 per order, regardless of the dollar amount of the purchase. Users can pay by credit card online or write a check when groceries are delivered.


ShoppingLink is currently selling annual sponsorships priced between $25,000 and $100,000. The company is also in discussions with several cable and phone companies to become a content provider on Internet access services.

"Everyone talks about the power of local content on the Internet; how much more local can you get than the grocery store?" said Mr. Olson.

Advertising won't begin until the service can deliver a substantial number of consumers, something Senior VP Sandy Goldman foresees happening when ShoppingLink is active in about eight markets.

"I believe online grocery shopping is going to be a significant medium," said Michael DeNunzio, VP-managing director at TN Technologies, Chicago, who plans to recommend the service to the agency's package-goods clients. "Advertisers, especially in package goods, need to get their feet wet while the cost of doing so is relatively inexpensive, as well as extremely negotiable."


Another online grocery service, Evanston, Ill.-based Peapod, is also moving to the Web next month.

The company, which has 13,000 subscribers in Chicago and San Francisco, plans to be in Boston this summer. Peapod recently did away with its $29.95 start-up fee, leaving only a $4.95 monthly membership fee and a charge of $6.95 per order plus 5% of the grocery total.

Backed by the Tribune Co., Ameritech Corp. and Providence Journal Co., Peapod has a handful of sponsors including Kraft Foods and Bristol-Myers Squibb Co.

Copyright April 1996 Crain Communications Inc.

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