LOWES ONLINE POINTS OUT PROBLEMS

JO FLEISCHER

WINSTON-SALEM, N.C. -- An Internet shopping service at Lowes Foods here is providing executives with early warnings about potential store-level problems.

A steady stream of e-mail surveys from Internet customers is being used to track 20 attributes ranging from produce quality to the friendliness of store employees, said Terry Moore, e-commerce director. "If we're seeing [satisfaction scores] in our perishables departments start to fall or trend down, we'll ask 'Is there an issue with a particular produce manager or produce quality?"'

In addition, Moore said the service called LowesFoodsToGo.com can alert executives to out-of-stocks in individual stores. "We can send that signal to the buying group, and we can send it to the operations group to re-deploy product," Moore said. "There are a lot of tools that can be taken from online shopping and applied in-store."

Launched in 1997, LowesFoodsToGo.com offers a drive-through pickup service for $4.95 per order at more than one-third of the chain's 100 stores in North Carolina and Virginia. At a few of those stores, third-party services also offer home delivery of online orders.

Since last year, the LowesFoodsToGo.com Internet site has been operated by MyWebGrocer.com, New York, which handles Internet operations for 30 other supermarket chains. Lowes Foods employees fill orders and load shoppers' cars.

Moore said customer feedback comes from e-mail surveys that follow each customer's first Internet purchase and every third or fourth subsequent order. Shoppers are also asked about the service in occasional "bag-stuffer" mail surveys and phone surveys. "We get lots of information fed back to Lowes Foods. Sometimes, it's tactical information that we have to take action on immediately such as a broken [buzzer] in our drive-through area where a customer was waiting for 10 minutes," Moore said.

He said LowesFoodsToGo.com also follows up with any repeat customers who stop ordering over the Internet. "They're not like typical in-store customers who might go to a competitor and we have no way of getting them back," he said. "We have their phone numbers and e-mail addresses, and we can send special promotions to capture those customers."

Lowes is a privately held division of Hickory, N.C.-based Alex Lee, and Moore declined to comment on site revenues or order volume. According to MyWebGrocer, Internet orders account for about 1% to 3% of sales at the supermarkets it serves, depending on factors such population density and the amount of advertising by the store.

Without discussing the size of the online service's customer base, Moore said LowesFoodsToGo.com is succeeding in attracting high-spending shoppers, many of whom are new to Lowes Foods. "These are wonderful customers to gain. The typical basket size is huge; the typical gross profit is larger than in stores," he said, adding that average orders are over $100. "So they're profitable customers with big baskets, and we borrow them from our competitors pretty freely."