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Web supermarkets were featured in Don Peppers and Martha Rogers rst book, The One to One Future. Peapod, a Web supermarket, was used to explain how one-to-one marketing was the wave of the future. Unfortunately, Peapod is in trouble today, and most of its competitors have failed. Why The reason is not dif cult to discover. Supermarkets have become so competitive that their pro t margin is only about 1
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percent. That means that out of every dollar you spend there, the store gets only a penny in pro t. A Web supermarket has to operate in that environment. It has to take that penny and use it to pack customers orders in boxes (using either low-cost workers or high-cost technology), put the boxes in refrigerated trucks, and deliver them to houses scattered all over a metropolitan area. No one can make any money doing that, and no one did. The Web supermarkets had to charge more than bricks-and-mortar supermarkets, but even the extra charge did not pay for the service they were providing. Furthermore, most Web supermarkets failed to achieve the pro ts from the impulse buying that takes over when people visit a real supermarket. No one goes to a supermarket to buy a quart of milk and comes home with just a quart of milk. But if you are ordering on the Web, you haven t made the investment to get into your car and drive to a supermarket, park, nd a cart, wander down the aisles, and then wait in line at the checkout counter. Everyone wants to make that investment worthwhile, so people pick up a few more items while they are there. A buyer on the Web who needs only a quart of milk doesn t see all the colorful vegetables piled up at the entrance. She doesn t see the ladies handing out samples to eat. She doesn t see the magazines at the checkout line. Her only investment is the $10 delivery charge. To avoid that delivery charge, she decides to pick up the milk at the 7-11 on her way home from work.
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So, What Is Left A Huge Research and Transaction Tool
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Consumers buy books, credit cards, travel, pornography, and nancial services on the Web. A much smaller number of people than had been anticipated in the 1990s look at or respond to ads. What they often do is research. Ordinary households use the Web as a combination of Yellow Pages and Consumer Reports. They look up maps, cars, appliances, real estate, and interest rates, and they use this information when they buy. Because of the Web, consumers are far better informed today than they were 5 years ago. It is not unusual to see a consumer going to a dealer carrying a PC printout that has all the background on what she plans to buy.
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Selling on the Web
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Dealers have to be more informed about their competition (and they nd it easier to be thus informed) because their customers are better informed as a result of the Web. My wife, Helena, and I were confronted with a problem. We had bought a condo in Fort Lauderdale, but our two cars were in Arlington, Virginia. We wanted to move one car to Florida and keep it there. I am not up to driving to Florida, and neither is Helena. So what could we do We used www.Google.com and entered Automobile Transportation. The rst name on the list was www.intercitylines.com, which specializes in moving cars in closed vans. The price was right, and we made a deal then and there on the Web. How could we have found such a rm without the Web The company is in Massachusetts, and it does not advertise in our Yellow Pages. This is what the Web is all about. So what does this mean for those who want to use the Web to sell to consumers today Manufacturers and catalogers need to have a really good site that has pictures and images of all their products and those products features. They need to: Make it easy for customers to look up their products. Have a guide to local dealers by Zip code. Use the Web to sell spare parts that dealers cannot or will not stock. Make it easy to print on a PC what the consumer sees on the Web.
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