SHOPLINK EXPANDS IN BOSTON, EYES NEW MARKET ENTRY

LINDA PURPURA

WESTWOOD, Mass. -- ShopLink here began expanding its home-shopping service in the Boston market this month, and is exploring adding another Northeast market in early 1998. ShopLink is also expanding its offerings, to approximately 15,000 stockkeeping units in grocery and nongrocery items. During a test with approximately 50 Boston-area consumers in February 1997 the company offered fewer than 10,000 SKUs, said Mike Winton, director of business development at ShopLink.

ShopLink is currently building a 50,000-square-foot distribution center in Canton, Mass. The company's expansion plans in Boston would bring it into more direct competition with other home-shopping services, including those from Hannaford Bros., Scarborough, Maine; Streamline, Westwood, Mass.; and Peapod, Evanston, Ill.

While these services accept orders via phone, fax and Internet connections, a ShopLink customer uses a PC, a CD-ROM provided by ShopLink and a modem to communicate with the company.

To use the service, consumers install the CD-ROM, which contains information about ShopLink's products and services, on their PC's hard drive. ShopLink plans to employ advertising, direct mail and a variety of other marketing tactics to get the CD-ROM into potential customers' hands, said John Rindlaub, senior vice president and chief marketing officer at ShopLink.

Once loaded, the customer can browse the program to become familiar with the service and register. Once registered, users can create a shopping list using data on the CD-ROM. This list is then transmitted, via modem, to ShopLink for updated pricing and product availability as well as specials and promotional information. This process takes one to two minutes, said Rindlaub.

When this process is complete, a final purchase order comes up on the screen. The user can accept and transmit the order, change the order or reject it.

If the order is transmitted, the customer receives a reference number. The order is charged to a customer's credit card, which goes on file when the user registers for the service. The time and date of delivery, via ShopLink's own vans and trucks, is determined by the service plan selected by the customer.

ShopLink offers two unattended home-delivery plans. One plan uses the company's proprietary chill container, which keeps perishables fresh for hours. The other plan involves ShopLink providing a refrigerator and shelving unit for customers who won't be home within a 36- to 48-hour time period.

Rindlaub noted the fulfillment aspect of its model involves keeping as little stock on hand as possible, to reduce carrying costs.

"Basically, all the product we offer is not stocked, but available on a just-in-time basis each day from our suppliers," Rindlaub said.

"We will operate out of a product-consolidation center, so when the consumer order comes in from their computer, it will be parceled out from our server to various product-fulfillment center partners and suppliers," he added. "We will try to keep the stock in the product-consolidation center as low as possible to reduce carrying costs."

For items ShopLink does house in its product-consolidation center, its plan is "over time, as capacity and volume improve, to use state-of-the-art technology, which might be any combination of radio frequency, pick-to-light, pick-to-display and carousel picking."

Andersen Consulting, Chicago, is a minority shareholder in ShopLink, a privately held start-up company formed in January 1996. ShopLink uses a proprietary electronic commerce system from Elcom International, Norwood, Mass.