Last week's announcement from Webvan that it was retreating from the Atlanta market saddened a lot of people here, especially my two kids.
They were always calling on me to call on Webvan, and I did a few times. The service was good and the groceries excellent. Several of my neighbors came to depend on the service. When we saw one of its trucks, we even sang the little jingle we'd made up.
So what went wrong?
Many analysts think the whole idea was crazy. People don't want groceries delivered, they said. It's a superpremium service, they said.
But despite Webvan's demise, food delivery is alive and well in my neighborhood. It's conducted from huge 18-wheel silver trucks marked "Sysco."
Not the same, you say. That's a restaurant-supply house, you say. Well, yes, it is. But Sysco, which is based in Houston, has been making a handsome profit delivering food for decades. It delivers quality products, it delivers them on schedule, and it also delivers a ton of important information on its Web site.
But when Sysco started, critics said that it had no hope, just like Webvan. Restaurateurs need to go directly to the markets to ensure they find the freshest ingredients, it was said. No one will pay Sysco's prices for a mass-merchandised solution, it was also said. Well, these days, Sysco is laughing all the way to the bank.
What exactly did Sysco do right? Here are a few things:
What should Webvan have done differently?
Webvan didn't have to fail. There is a market for food delivery, a big market, and one that the Internet makes easier than ever to reach. But you have to do your homework. You have to take it one step at a time. And you can't let "irrational exuberance" turn you into a fool.
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Dana Blankenhorn has been a business reporter for more than 20 years. He has written parts of five books and currently contributes to Advertising Age, Business Marketing, NetMarketing, the Chicago Tribune, Boardwatch, CLEC Magazine, and other publications. His own newsletter, A-Clue.Com, is published weekly.
December 12, 2013
1:00pm ET / 10:00am PT