The holidays are upon us, and many consumers will be turning to the Web as they prepare the family feast and search for unique food-oriented gifts.
At this crucial time of the year, the link from the Web to the supply chain has to be strong, because those last-minute shoppers need their orders complete and on-time so as not to disappoint.
Many on-line grocers have increased warehouse capacity not only to handle the holiday rush but also to handle anticipated growth of on-line grocery shopping in the coming year.
Some on-line grocers have also beefed up their transportation management systems to assure the smooth delivery of those holiday goodies.
On-line grocers tell SN that they are confident that their sites will sail through the holidays. Unlike sites for toys and apparel, the grocery sites will not experience the same type of rush for the holiday season. But many are gearing up for increased activity by adding capacity to their Web servers.
Even short outages of a day or two -- like the one experienced by GroceryWorks.com, Dallas, in November -- can be disastrous during the holidays as people are depending on deliveries for parties or gifts.
John Cogno, vice president of information technology for Westwood, Mass.-based Streamline.com, said that the company is gearing up for some extra traffic although it is not expecting a stampede to its site during the holiday season. "There might be some more traffic in an indirect sense because there will be more people on-line than there has been during the rest of the year," he said.
The Web-based grocer has secured increased hardware capacity with its provider for site hosting, hardware and software application services, he said. "We are ready for three to four times the number of hits," said Cogno.
HomeGrocer.com., Kirkland, Wash., opened a new 104,000-square foot distribution center last month in Renton, Wash. The warehouse includes an automated conveyor system that routes customer orders directly to their delivery truck and a refrigerated produce preparation area. New technology also enables staff to pick orders for several customers at one time, increasing efficiency.
"We blew the doors off our first warehouse and needed a much larger facility to meet our growing Seattle customer base," said Mary Alice Taylor, HomeGrocer.com's CEO. "This new warehouse will serve as the model as we continue to grow and expand nationally," she said.
HomeGrocer officials stress that this increased capacity and improved technology is for planned expansion in the new year. The company currently serves Seattle and Orange County, Calif., and plans to expand to 20 additional locations in 2000.
"We didn't add this specifically for the holidays, although it will help us in meeting increased demand and we do expect to see a spike in sales at this time," said Stacy Drake, a spokesperson for HomeGrocer.com. "We're really in a state of rapid growth."
Fred Horowitz, president and CEO of NetGrocer.com, North Brunswick, N.J., says the on-line grocer plans for additional capacity at all times.
"We're a year-round site, so we're constantly working to improve our infrastructure. We design for excess capacity, so we don't typically experience site outages. There have been times when people have had a bit of difficulty getting on the site, but those are few and far between. We'd rather have too much than too little." The site is adding several features for the season, including holiday meal planning and suggestions for grab-bag gifts.
While the logistics of serving customers during the holidays is crucial to success, many retailers are looking to the Web for business-to-business transactions as well. Retailers spend a great deal of time looking for suppliers of produce and other products -- especially for items they only carry once a year -- and e-commerce Web sites are cropping up to connect suppliers and retailers. Several supermarket-oriented business-to-business sites have launched in the past few months, including Agribuys.com, Torrance, Calif., and Produceonline.com, Pasadena, Calif.
According to a recent study by Deloitte Consulting, New York, 30% of companies have implemented an electronic procurement solution, while an additional 61% are either planning to implement or are considering e-procurement solutions.
Retailers lead other industries in the area to strategic planning for the Internet, as more than 80% of respondents reported having an e-business strategy for communicating electronically with suppliers.
Agribuys.com recorded its first transactions between retailers and growers late last month, which included celery, apples, lettuce and grapes. "We are extremely pleased with the performance of our system," said Agribuys.com CEO Marina Kotsianas.