INDEPENDENTS MOVING TO ON-LINE SHOPPING PROGRAMS

DAN ALAIMO

DAYTON, Ohio -- Eight more independent supermarkets, including the widely recognized Dorothy Lane Market here, have set plans for on-line shopping programs.

The other seven are Andy's Markets, Simsbury, Conn.; Guintas Thriftway, West Chester, Pa.; Piggly Wiggly, Rome, Ga.; Snyder's IGA SuperThrift, Oklahoma City, Okla.; Nelson's IGA, Fort Worth, Texas; Hurst IGA and Harvest IGA of Saginaw, Texas; and Food Basket, San Angelo, Texas.

Using a mix of pickup and delivery plans, all are using the applications, systems and processes from MyWebGrocer.com, New York, while providing their own personnel and fulfillment.

"I saw the software, and I thought it was a good fit for us," said Norman Mayne, vice president and chief executive officer at Dorothy Lane, which will begin the program in the fall after a point-of-sale upgrade at its two stores.

The retailer has an existing on-line ordering program for a very limited number of specialty items and will add the full-line MyWebGrocer application to existing pickup and delivery programs.

"Our customers are asking for it," said Amy Brinkmoeller, Dorothy Lane's director of management information systems. "Our customers are short on time, and they want a simple way to do their shopping. If they are on-line, it will meet the needs of those customers."

Mayne noted, "We cannot spend the millions of dollars that national chains have spent entering the on-line world. Outsourcing was the solution." The MyWebGrocer application will feature Dorothy Lane's products, prices and personality, he said.

Snyders IGA SuperThrift, Oklahoma City, launched an on-line shopping program in mid- August, offering both pickup and delivery. Jim Mills, owner of the five-store operation, plans to extend the company's high-service store brand, Snyders Famous, through the initiative.

"Our customers demand and deserve the best. The demand and need for on-line shopping convenience in Middle America is growing. Snyders IGA stores want to have the most customer-friendly on-line application to match our in-store friendly service," he said.

Like Dorothy Lane, Snyders already had a delivery program. "So it gives us better utilization of the equipment," Mills said. Customers who pick up the orders at stores will pay a $6.95 fee, while delivery will cost $9.95 in areas close to stores and $12.95 beyond that, Mills said.

"We are trying to promote it as heavily as we can to get the word out there that this service is available," he added. Among the vehicles Snyders is using: a direct-mail coupon pack with gift certificates good on the Web site only, a sweepstakes offering a year of free groceries, e-mail, and the retailer's print and radio advertising. The radio station also will give away groceries.

Mills sees the e-commerce program as a competitive advantage. "It's an opportunity to differentiate our stores. Wal-Mart is invading Oklahoma City. This is a test market for Wal-Mart with their saturation strategy of supercenters and Neighborhood Markets," he said. "They are building stores faster than we can blink our eyes.

"So we have to do something that is different from the competition to keep customers. We think a lot of customers are time-starved and busy, and this will be a viable option for them to make it easier to shop for groceries. It's the wave of the future, we think. Although we are not trying to reduce our customer count in our stores, we are trying to give customers another convenience for them to shop our stores.

"Although we are not the first on-line supermarket shopping solution in the market, our proven customer commitment will enable Snyders IGA to be the best offering to the Oklahoma City Market residents for years to come."

Jim Salmon's four-store Piggly Wiggly operation, based in Rome, Ga., counts Kroger, Super Kmart and Wal-Mart Supercenters among its competition. "We have found out how to compete successfully and our success depends on us knowing our customers," said Salmon, who is chief executive officer. "There is no question that they are increasingly sensitive to anything that will give them back time. We think that the on-line service we will provide through MyWebGrocer.com will meet that need in a manner that the big guys will have a hard time matching.

"After looking at a variety of services, we found that some were pretty impressive but were either not complete or focused on 'traditional grocery' activities such as selling pop-up ads and manufacturer's coupons. MyWebGrocer.com has studied consumers and their on-line needs more thoroughly than any other supplier and their solution is in touch with what consumers want."

Bill Nelson, president of Nelson's IGA, knows people who work at GroceryWorks.com, Dallas, where the on-line grocery-shopping business is going very well, he said. "There is obviously a demand for it and I don't want to be at a competitive disadvantage," he said.

Nelson's will enter the on-line world within two months with pickup only and then consider deliveries as the business grows. "I expect to move to delivery, but I want to get it off the ground first and make as few mistakes as possible," he said. Promotion will include advertising in the retailer's fliers and some radio spots.

Many customers go to the bigger chains for their primary shopping and then fill in at the independents, something Nelson would like to change. "I'm just excited. Even though I'm one of the little guys, I'm going to be able to compete in that arena," he said.

With these eight retailers, MyWebGrocer.com now has a total of 13 signed up. The others are GA Foods Group, Lowell, Ind.; Geissler's Markets, Windsor, Conn.; USave Foods, Omaha, Neb.; Grand Central IGAs, Concordia, Kan.; and McKeever's IGA, Warwick, R.I.

"Independents typically lead major chains, particularly in technology," said a source close to the eight independents. "If they are looking at the numbers and are close enough to listen to their customers, they believe the marketplace is moving in this direction.

"How fast? They're unsure. What are the penetration rates? They are unsure. But they are hearing it and seeing it," he said.

The Webvan customer base in San Francisco has grown from zero a year ago to 150,000 households today. "That's 50 supermarkets. That had to come from somewhere. They may or may not keep all those customers, but consumers don't have any question about what they want to do here. They want to eliminate the drudgery of going to the grocery store," the source said.

The eight independent retailers "clearly see the consumer's need for a more convenient method of purchasing grocery, drug, pet and household items. The weekly trips to several grocers, the drug store, Wal-Mart, the pet store and the produce stand are a tremendous investment of time and aggravation, given the fact that most products consumers purchase are the same week to week. The grocers agree that they can build market share, increase customer convenience and make money if they more aggressively and decisively enter into this new channel," he said.