Internet Grocery E-tailingDelivery ModelsPreferred Service ModelsFulfillment ModelsFinancialsFulfillment IssuesFulfillmentKeeping Customers in the LoopSlide 9ReturnsDelivery/return solutionsOrder StatusReturns/Back OrdersCost as % of RevenueFulfillment Challenges TodayFulfillment Challenges TomorrowHED 460Internet Grocery E-tailingVery few consumers shop Internet for groceries1 in 5 Internet users who are the primary household grocery shopper are interested42% would like to spend less time shopping for groceriesAlmost 40% Internet users enjoy shopping for groceriesHED 460Delivery ModelsNext day service (Peapod, homegrocer)2 hour delivery window$19.95/monthOrder-on-demand (webvan)30 minute delivery windowPre-scheduled, unattended delivery (streamline, shoplink) $35/monthReceptacles/refrigeratorsHED 460Preferred Service Models2947286723512346010203040506070Store PickupDeliveryC-Store/ mediaC-Store/ mealsAll InternetInterestedHED 460Fulfillment ModelsStores (beeline)Distribution Centers/WarehousesHand held radio frequency scanners to help pick productsDelivery to consumers10 drivers/150 orders, now 28 drivers/500 ordersHED 460FinancialsNo one is making a profitGrocery profit is usually 1-2%Potential profit percent of up to 12%Infrastructure is the main barrier to profitsHED 460Fulfillment IssuesProduct availabilityOrder processingDeliveryReturnsCustomer serviceHED 460Fulfillment8785847875490102030405060708090Fulfillment Capabilities ExpectedVerify rcpt.AvailableVerify shipStatusBack orderLocal returnHED 460Keeping Customers in the LoopCircuit CityLocal store pick-up (Express pickup)Identify up to three local storesChecks availability at the local storesWith Express Pickup no shippingPick up at customer’s convenienceHED 460Keeping Customers in the LoopStaplesEnter zip code at start of shopping for real-time inventory availabilityAnything in-stock is available for next day deliveryHED 460Returns2941530102030405060Return ExperienceReturnedToo much HassleNo EffectHED 460Delivery/return solutionszBox (portal)Eponymous bin for secure delivery and returnActivated by keypad$5/month and $60 security depositEmpori.com (portal)Parcel pick-up and return depots (Toronto) for Internet merchandiseFreeStorage lockers (climate controlled)Accessible by passwordHED 460Order Status94.597.491.753.883.348.777.848.70102030405060708090100Confirm Back Order Shipped TrackingPure PlayMulti-channelHED 460Returns/Back Orders4.35.135.90123456Returns Back OrderPure PlayMulti-channelHED 460Cost as % of Revenue1913141102468101214161820Today 2 YearsPure PlayMulti-channelHED 460Fulfillment Challenges TodayFulfilling orders on timeManaging peak season volumeLowering total fulfillment costsHED 460Fulfillment Challenges TomorrowDistributing globallyLowering total fulfillment costsManaging peak season volumeKeeping up with order
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