Safeway risks little in going to the web by Steven Gardner published in The Columbian, Jan. 12, 2002 Safeway will send a caravan of Safeway.com trucks to Vancouver on Monday morning to unveil its new Internet ordering service. The PR event is what's called a soft launch because the service has been running for about three weeks. Customers can get online, order, use a credit card and schedule delivery. The service is available seven days a week. The products come from Safeway, but GroceryWorks, a Safeway partner along with Tesco.com, will make the deliveries. Safeway Club members will still get their discounts. There is a $9.95 delivery charge. Safeway will have five Portland-area points of distribution for the program, including Vancouver. Clark County coverage includes La Center and Washougal. The concept has been tried in the Portland area and elsewhere with at least one notable disaster ---- Webvan. But Safeway, as a grocery store, has built-in advantages that Webvan didn't. Bridgett Flanagan, Safeway spokeswoman, said officials from her company, GroceryWorks and Tesco will discuss some of those edges at 11 a.m. Monday at an the official unveiling at the Safeway at 2515 N.E. 112th Ave. There's no word how much the new program is costing Safeway or how many shoppers Safeway expects will use the service. Years ago, Safeway allowed customers to phone in orders. Flanagan said not enough did, so the program was axed. The biggest question will be how Safeway will succeed where HomeGrocer and Webvan failed. A few years back, before I jumped back into journalism, I had a job coaching people on start-up Internet businesses. Among the first things we told our clients was the tool, (the Web) was nowhere near as important as the businesses behind it. That seems like a no-brainer, but the people at Webvan raised $375 million in the company's initial public offering and were out of business in about 20 months. The company's stock went from $30 per share to 6 cents. Webvan's troubles came from delivery glitches, a poorly executed merger with HomeGrocer, a high profile executive leaving and bad press. Customers often liked Webvan and HomeGrocer, but when problems arose, real or perceived, shoppers went back to the stores. The same thing could theoretically happen to Safeway but the company would survive just fine. Going back to the store would in many cases still mean going to Safeway. If there are few Safeway.com customers to begin with, that won't drain customers from the numbers shopping at Safeway already. For Safeway, the Internet is an added value, not the sole niche. The same is true for Albertson's, which has Internet service in Seattle and other markets. Webvan delivered groceries but marketed technology. Like scores of Internet companies now gone, Webvan looked like a huge success but bet its survival on one flimsy niche. Safeway will probably avoid that, no matter how well or how badly the company delivers. |
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