A web site that allows users to pick out recipes and determine how big a meal is desired. The web site will then calculate the ratios of ingredients required and submit an order on the user's behalf to an e-grocer site. Charging e-grocer's a licensing fee will be the source of revenue.
In the traditional grocery-buying model, customers must pick out specific products they wish to purchase either by physically pushing a grocery cart up and down the different aisles of a store or by clicking specific web pages and clicking each product to purchase. E-grocers have the potential to gain a competitive advantage by effectively being the personal shopper for the customer. It's like saying "get me what I need to cook a pasta meal," instead of saying "Select two eggs, one package of pasta, six tomatoes, a head of lettuce, two carrots, a quarter pound of cheddar cheese and a carton of milk." The added convenience of having the proportions as well as the ingredients.
Most grocery shoppers' are interested in healthy, nutritious and tasty meals. However, paying for access to online recipe content is a "dead concept" on the Internet [3]. The product, Recipe Mate, seeks to integrate content with e-commerce by setting up an application which allows a web site to feature different recipes which people can choose and adjust proportions for depending on how many people they wish to serve. Recipe Mate then calculates all relative ratios of all the ingredients and submits an order to the e-grocer site that will then handle the delivery of products.
In the U.S., online grocery sales are growing, having risen 43% over the last 18 months from March 2001 [2]. In Europe alone there are 546 e-grocers, however, ordering frequency and the e-grocers share of grocery sales is still higher in the U.S [4]. It is an industry with tremendous opportunity.
The online grocery industry is one of convenience and online grocers must deliver superior customer service [1]. Recipe Mate is marketed to anyone with an online grocery presence, either the dot-com e-grocers or traditional supermarkets branching out online. This will be an application that will be licensed to them.
The main competitors to this product will be the in-house systems designed by the E-grocers themselves (such as netgrocer.com). However there are many E-grocer sites and not all of them have this capability. Once an off-the-shelf solution is available, it is predicted that those e-grocer sites will forgo the in-house development process and purchase this product in order to maintain a competitive edge, time-wise, with their competition. Some e-grocer sites would find it beneficial to form partnerships with traditional supermarkets in order to leverage their established inventory [1]. Being able to offer the Recipe Mate service would make them more attractive then other sites that lack this functionality.
Although there are plenty of recipe-theme web sites, few incorporate the capability of actually ordering the ingredients necessary for the preparation of their dishes. One site, netgrocer.com, does have that feature but their recipes only feature brand-name ingredients (e.g. for muffins, use brand name X flour, brand name Y butter, etc.) and thus would not be the most cost-effective for consumers. Netgrocer,com has a limited recipe database since it is only limited to non-perishable food items. Thus, a recipe for seafood dish, for example, would only allow you to order the (dried) pasta, leaving it up to the client to find the fish and fresh lemons him/herself. A competitor that can provide more product variety along with the off-the-shelf Recipe Mate functionality could quickly find gain a advantage over such a business.
There are two main components of Recipe Mate. The first is the recipe database. There are plenty of recipe books and other related material. A partnership between Recipe Mate and another established recipe content provider (e.g. any of the published recipe books that are bestsellers) could quickly allow us to construct the database backend quickly. Each recipe will have the base ingredient proportion adjusted for a single serving so when a user selects a meal for multiple people, all the ingredient proportions are merely multiplied by that proportion. Every single possible ingredient will be indexed. The next step is to connect it to the client's product database. All the offered product ingredients will be linked to all the possible ingredients, including substitutes if necessary. If no substitutes are available then the links will be nulled out and any user selecting a recipe that includes that ingredient will not have the option of purchasing that ingredient from the e-grocer.
When Recipe Mate receives an order, it will work with the client's back end to "fill the shopping cart" with the smallest quantity package that meets the ingredient requirements of a recipe. So whether a recipe called for two tablespoons or two cups of sugar, the same 1 pound package or sugar will be offered for purchase. With enough client customization, the consumer may also go about and browse for other products once the ingredients are all chosen.
Recipe Mate will be business-to-business operation and will target all online grocery presence be it the dot-com e-grocers or traditional supermarkets branching out online. With the failure of big national brands such as Webvan [5] and Peapod [6], e-grocers have learned that bigger is not better and have stayed within their local markets [7]. As a result, there are many medium-sized regional online grocer businesses that Recipe Mate can be marketed to.
E-grocers that use Recipe Mate can expect more than just a novel feature to attract consumer attention. Recipe Mate will allow consumers to make more informed decisions about their purchases and reduce the time spent navigating web sties and looking for specific groceries. According to our lecture notes, the less time consumers spend looking for stuff, the more likely they are follow through an buy it.
Recipe Mate is a natural fit with the e-grocer business. Consumers use e-grocer web sites for mainly convenience purposes [3] and Recipe Mate will allow them to make quicker and more informed choices about their purchases.
[1] Alice M. Richter. Food Manufacturers Shop for E-Grocers.
[2] Lori Enos. E-Commerce Times Report: Net Grocers Gaining Ground.
[3] Matt Stamski. Checking Out Internet Grocery's Evolution.
[4] Vesa Kämäräinen. Helsinki University of Technology. Supply Chain for e-Commerce and Home Delivery in the Food Industry.
[5] Anitha Reddy. WashTech.com: Top E-Grocer Webvan Shuts Down.
[6] BUSINESSWEEK ONLINE: Decline and Fall of an E-Grocer.
[7] Lori Enos. E-Commerce Times Report: Web Delivery Services in Crisis.
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