DALLAS (FNS) -- As supermarket operators explore home meal replacement to attract busy, hungry professionals, some of them are also using electronic shopping to entice consumers back to meal preparation.
And, ironically, as the practice of shopping electronically grows in popularity, it is likely to become more directly integrated as a tool for supermarket fresh-meal programs, said executives whose businesses are on the cusp of computerized food retailing.
As the ordering and distribution system becomes more streamlined and volume grows, delivery of fresh, hot meals as an extension of supermarket HMR programs will become more feasible, according to Tim Dorgan, executive vice president of Peapod Interactive, Skokie, Ill.
Retailers attending the recent HMR Summit in Dallas heard how two versions of electonic shopping -- interactive on-line shopping and in-store touch-screen kiosks -- are making meal decisions convenient for consumers who may not be opting for a fully prepared meal.
But for now, electronic shopping in practice is "almost the opposite of HMR," Dorgan said. "We are giving consumers time and customized ideas to prepare meals at home."
Dorgan's firm is the largest on-line computer-shopping service provider; its 75,000 members placed $70 million in supermarket orders last year.
On-line, or consumer-direct, shopping eliminates the drudgery of weekly food excursions by letting customers shop via the Internet, he said. Members order by computer, and purchases are delivered direct to their homes. Some estimates show the concept may be an $80 billion business by 2003, representing 20% of grocery volume.
The demographic target for on-line shopping is similar to HMR's, Dorgan noted. The typical on-line shopper is a high-income professional woman, aged 25 to 49, who is too busy to spend the same time shopping as women did a generation ago.
While she hasn't time to plan her family's meals and spend hours cooking, she has high expectations of herself and feelsguilty that she isn't doing enough for her family, he said. Shopping electronically eliminates a weekly chore yet provides meal ideas, help in menu planning, and, thus, more time for food preparation.
On-line shopping lets the consumer buy her weekly groceries wherever and whenever she wants -- whether in her office or late at night after the kids are in bed.
Sophisticated software lets the member "customize the supermarket to her needs, any way she sees fit," he said. Products can be organized by category, price, items on sale, or by a dozen nutritional factors such as calories or amount of fat, salt, or cholesterol. "That's a very empowering shopping tool for the customer," Dorgan noted.
She can order any product the supermarket carries -- from perishables to canned and packaged products -- and specify delivery time within a 90-minute window.
Members can add comments to guide Peapod's order-fillers, such as directing that three bananas be ripe and another three be green. He noted that because Peapod's trained order-fillers do the selecting, the quality of fresh foods and meats tend to be higher than the customer may choose herself.
But consumer-direct shopping also benefits the retailer and manufacturer as much as it does the consumer, he said.
Peapod, for example, works through one highly regarded supermarket chain in each city, which builds customer loyalty. Since members otherwise would divide their shopping among competing supermarkets, 70% of Peapod's volume is incremental business for the chain partner.
"In Chicago, we are giving Jewel Food the volume equivalent of 1.5 stores without their having to build with bricks and mortar," he remarked.
Manufacturers can use on-line shopping to track purchase histories, to conduct surveys whose accuracy can be checked against actual buying patterns, to create customized recipes that stimulate product purchases, and to promote sale items.
"We can put a banner ad right at the point of consumer decision and see how that affects purchase behavior," said Dorgan.
"The last key barrier is cost," he said, adding that the cost now averages $10 on a $100 order. "It is still pricey to a lot of people. The key is to get the price down to a small flat fee, or even free, to the consumer."
Another electronic retail pioneer, John McMenamin, president and chief executive officer of San Francisco-based CompuCook Interactive Marketing Solutions, said that in-store kiosks using touch-screen technology present retailers and manufacturers new opportunities for sales growth and store excitement.
Like on-line shopping, McMenamin said CompuCook kiosks target today's convenience-oriented shoppers "who are looking for meal solutions and to increase the productivity of their shopping trips, not necessarily for discounts and coupons."
Located near a supermarket's entrance, the kiosks draw about 10% of store traffic -- customers who come to rely upon them as a store information center for regular usage.
These shoppers find touch screens easy to use and a good generator of meal ideas, he said, noting that "content is key. It must contain information that is compelling, actionable, diverse and fresh. Technology alone doesn't do it for you."