LINKING UPSCALE

DAVID GHITELMAN

WESTWOOD, Mass. -- ShopLink.com here said it wants to be the Internet grocer of choice for upscale suburban families with children.

Two distinctive ShopLink offerings the company said should have particular appeal to these time-pressed shoppers are unattended delivery and what the company calls "home-concierge services."

Unattended delivery frees busy customers from having to wait at home to receive their orders, as well as freeing ShopLink from having to schedule deliveries in narrow time slots, the company pointed out.

The home-concierge services include dry cleaning, bottle and can redemption, film developing, shoe repair, postage, UPS shipping and flower delivery.

Incorporated in 1996 and serving the public since 1997, ShopLink said it is currently available in two market areas -- the Boston region, where it serves more than 100 communities, and Connecticut/Westchester County, N.Y., where it serves 57.

To succeed with these demanding consumers, the company emphasizes "quality first," according to John R. Icke, ShopLink chairman and chief executive officer.

This means "restaurant-quality cuts of meat, farm-fresh produce, just-off-the boat seafood and gourmet prepared meals," he told SN.

A close second to quality, Icke said, is convenience. ShopLink has pioneered the unattended delivery of its products, using its trademark Chill Containers that maintain products at their ideal temperature for up to 24 hours.

Icke said unattended delivery will be the wave of the future in the Internet grocery business. "We believe our competition will be moving toward unattended delivery," he said.

However, unlike some other Internet home-delivery grocers, ShopLink does not permit customers to choose their delivery time. Instead, shoppers must select a weekly delivery day (usually from a list of two or three) and place their order on the company's Web site (www.shoplink.com) one day in advance.

Payment is accepted only through credit or debit cards. And delivery is not free. Customers must pay a $35 monthly fee.

Icke said the company keeps its prices roughly equivalent to those in the best supermarkets in the upscale communities it serves.

He said the service has met with strong customer acceptance. He said it has the fastest growth rate among Net grocers in the Boston market and has the industry-leading frequency-of-purchase and customer-retention rates nationwide.

According to the company, 70% of its Boston-area customers place orders on a weekly basis, with orders averaging $100 and capturing about 85% of its customers' total weekly shopping needs.

ShopLink plans to accelerate its growth over the next few years. It launched its Connecticut/Westchester service January 2000 and has plans to expand into two more market areas by the end of the year.

Icke declined to disclose where these expansions will occur, although he did say the company will stick with its upscale suburban focus and that the new market areas could be contiguous to the communities it currently serves.

ShopLink plans to be active in 30 market areas by 2003, he added.

In contrast with its ready acceptance by consumers, ShopLink has had to work hard to get industry vendors to meet its deadline requirements, according to Icke.

"We are asking people to re-engineer the way they do business," he said. For example, ShopLink calls in its fish orders to a wholesaler at 2 p.m. for delivery at 8 that evening, pretty much the complete opposite of the evening order, morning delivery typical in that field.

Atypical for the Net grocer field, ShopLink has been publicity shy. "Not a lot is known about us -- and that's by design," said Icke.

One important reason for this, he explained, is that the company does not want to let its competition know its next move.

Also, as a closely held private company, ShopLink does not have to appeal to Wall Street types. Principal investors in the company include Andersen Consulting, Soros Private Equity Partners, MF Private Capital and BancBoston Ventures.

Barry M. Stouffer, senior analyst at J.C. Bradford & Co., Nashville, Tenn., said the element of ShopLink's business model most favorable to its potential success is that it charges a fee.

"Paying a monthly fee and offering weekly delivery helps customers develop discipline," he said. "It tends to make them use the service more." He noted that services that offer weekly deliveries tend to have higher rates of repeat business than those providing next-day delivery.

He also said unattended delivery helps both the consumer and the company. "It makes a tremendous amount of sense," he said. "From the consumer standpoint, the unattended delivery adds flexibility. For the company, it makes it easier to schedule deliveries."

The home-concierge service is also potentially a money-maker, he added. "Anything you can can add to the truck that's already going to the home increases your gross margin per delivery," he said. "The point is convenience to the consumer."

ShopLink.com

Web address: www.shoplink.com

Headquarters: Westwood, Mass.

Areas served: Boston, Connecticut (including Westchester County, N.Y.).

Delivery option: Weekly unattended, monthly fee.

Expansion plans: Two more market areas in 2000, 30 market areas by the end of 2003.

Major investors: MF Private Capital, BancBoston Ventures, Soros Private Equity Partners, Andersen Consulting.

Key executives: John R. Icke, chairman and chief executive officer; L. Jamison Hudson, chief financial officer.