RELIABILITY FOSTERS LOYALTY FOR SIMONDELIVERS

JON SPRINGER

MINNEAPOLIS -- Simon Foster knew he wouldn't be the only game in town forever, but his Internet grocery firm here, called SimonDelivers, has a good running start in the competition.

Foster, an entrepreneur with a background in software and with food processing at Pillsbury here, launched the area's first Internet grocery shopping site a little over a year ago. The business has been growing at a rate of 10% per week this year, Foster said, leaving him searching for more warehouse space. A move to a 100,000-square-foot facility is expected within the next few months.

SimonDelivers allows customers to shop on-line and have their orders delivered during selected prerouted delivery routes, Foster said. Most customers have three days per week to choose among and delivery is free on orders of more than $75. A key to the success of SimonDelivers is that its delivery drivers maintain the same routes week to week, which builds trust between Simon and its customers, Foster said.

"Our drivers are professionals who have ownership of their neighborhoods," Foster said. "Since the customer deals with the same people every time, they know they can trust them."

About 70% of Simon's customers now choose to receive their deliveries unattended, he added.

SimonDelivers offers around 8,000 stockkeeping units, with groceries provided by Nash Finch based here. Through strategic agreements with area specialty food retailers, Simon also delivers coffee, bagels, fresh bread and prepared foods.

Minneapolis ranks high among U.S. cities in working women and households with personal computers, and as a result is an excellent market for Internet grocers, Foster said. He was not surprised when Streamline.com, Westwood, Mass., said late last month it would expand to Minneapolis this fall.

"I think it's good in that there will be two voices shouting about Internet groceries," Foster said. As for competition, Foster said that Streamline's high-end target customers are different from the ones SimonDelivers aims for.

"I think they'll wind up taking a more upscale customer than we do, partially because their customers pay for their service," Foster said. "I think we'll have a broader appeal. In some ways, we'll complement each other."