DOES COMPUTERIZED SHOPPING DELIVER?

DENISE ZIMMERMAN

Computerized shop-at-home programs have their champions -- in particular, retailers who already offer home shopping and delivery service through telephone and fax orders.

But for retailers not involved in home shopping services, key questions remain about just how popular the use of computers for purchasing products can be -- and how quickly the practice can take hold.

Clearly, a host of issues remains to be addressed before the potential of computerized shopping becomes a widespread reality. For example: How large is the potential market? How computer-literate are shoppers? Are the profit margins and other retailer incentives high enough to justify the cost of offering the service?

Other questions retailers and wholesalers are asking are:

Who's the target customer? While home shopping and delivery services are most widely used by the elderly and homebound, it's often those customers who are the least comfortable with technology and least likely to have a personal computer in the home. But that may change in coming years with the graying of the "computer generation," observers said.

Freshness first: Industry surveys indicate shoppers often choose their primary supermarket based on the quality of its produce and meat departments.

PC-based and interactive TV shopping may allow users to rotate images of product packaging for close inspection, but will they allow customers to purchase the exact produce they want and avoid buying bruised pears and black bananas, for example?

Retailers and wholesalers cited a number of issues, technical and cultural, that may well determine the path computerized shopping takes in coming years. Here is what they had to say:

Bob Marcinkiewicz

retail systems manager

National Supermarkets

Hazelwood, Mo.

In the next few years, [computerized shopping] is not going to be there. Maybe it will down the road -- five, six, seven, maybe as far as 10 years.

With the way both the husband

and wife are working, it's a time-saving tool that'll help them. But on the other hand, the supermarkets have got to be equipped to handle that, and there are going to be some costs to it.

If the customer's cost [outweighs] the convenience, it's probably not going to go far. But if the cost is reasonable, there are people who are going to do it.

I think interactive technology is a little bit different. It's basically like home shopping on TV. There are more people that are adaptable to TVs than to a computer at home.

Michael Rourke

senior VP, communications, corporate affairs

A&P

Montvale, N.J.

I feel computerized home shopping will develop as a small niche in the food buying public. I don't think it will be a very large niche, but it will be a group who likes to use the service.

People can get large orders at one time and don't have to worry about carrying more than two bags. They can order large quantities [of whatever] appeals to them.

Jann McKellar

spokeswoman

Spartan Stores

Grand Rapids, Mich.

Computers offer knowledge and communication in the business environment and now that flexibility has evolved to homes with on-line shopping. Computerized shopping provides the flexibility of up-to-the-minute availability, pricing and ease of ordering.

Faxing your order will be replaced by computer shopping as on-line technology is the normal communication mode. For those progressive retailers who continue to update their own technology, linking up with an on-line service will provide opportunities in advertising products, demonstrations, departments and services.

To a store's clientele who are computer-literate and time-crunched, ordering a week's groceries, seeing a daily meal menu and ordering all ingredients with recipes [obtained on-line] is close to reality. Wouldn't it be a tremendous consumer benefit to know the expenditure total [in advance], drive up to the store, swipe a frequent shopper card and have the groceries quickly delivered to the car?

Gary Kroupa

MIS director

Smitty's Super Valu

Phoenix

In the area of supermarkets, I think computerized shopping will have limited use because we already tried a home delivery program and it just wasn't needed. There weren't that many requests for it.

But I see it [becoming prevalent] in electronics-type stores, Sears, and for large-volume, large-ticket items. People would rather touch and feel and be able to select what they want from a supermarket.

Calvin Sihilling

VP, information systems

Alex Lee

Hickory, N.C.

Computerized shopping has potential. My main question is, what is the [optimum] customer and market profile? There is a niche out there you can satisfy, but is it a big enough niche to invest money in? To make money in?

The thing we look at in the Southeast is, how many cities do we have that can support [computerized shopping]? And what about the delivery side of it? How do you get those groceries to the consumer and not have the [delivery fee] be so high that no one's going to want to use it?

If it's worth $10 to the consumer, and it costs a retailer $20 to deliver, it's not exactly the best business to be getting into.

Bill Rohal

MIS director

G.A. Love Foods

Burlington, Ontario

We deal in fresh product because that's our marketing niche. It's very difficult to order produce from home via phone or computer. You don't know what's out there. You don't know what it looks like. I don't think it's something we'd be that interested in.

Lawrence Fernstrom

VP, MIS, EDP

Eagle Food Centers

Milan, Ill.

I think there's a place for computerized shopping in densely populated, urban markets. But in rural environments, I don't see that becoming extremely popular.

Shoppers still like to look at the produce, pick up the meat, pick out the package they want, as opposed to having someone send what they think is best. If you're buying a bar of soap, then it isn't too big a problem.