While many of the “me-too” e-tailers of the web boom are going under, the truly innovative ideas are also under threat.
Webvan is truly innovative. The idea is to build a huge home delivery infrastructure and fill it with online orders. That means a line of warehouses, a fleet of trucks with refrigeration units, and some fancy technology for procurement and personal delivery.
Despite its purchase of rival Home Grocer, which is still pending, and its entry into the Chicago market this month, the stock has been unable to get out of its own way. It’s currently trading at a little more than $5 per share; its 52-week high was 34.
This can’t go on. Webvan needs continued access to capital in order to build out its network.
CEO George Shaheen told CBS Marketwatch recently that the company’s strategy is to go beyond groceries. He insists that’s just a foot in the door. Once someone is accustomed to using Webvan, it can sell them anything.
For that to work, however, lots of people have to use Webvan every week. Like many Atlantans, I tried the service when it launched here, and the service was excellent. But I only tried it once, and I’m not rushing back.
The reason is that Webvan has only one element of convenience. It saves me a trip to the store. There’s another, equally important element of convenience they haven’t considered: What am I going to cook?
Many newspapers publish weekly menus, and thousands of shoppers buy groceries based on them. The menus feature food items that are seasonal or on sale each week, and each day has a theme a big Sunday dinner, leftovers, a meal just for the kids, and a meatless meal, for instance.
What if Webvan could deliver that whole thing as a package the menus and the food? You could order the week’s groceries by the number of parents and kids in the family, essentially subscribing to your groceries, and take your order at about the same time each week. (When someone starts ordering this, don’t forget to ask if they have enough milk and cereal before they hit the buy button; I am so tired of those onesie-twosie trips.) Now Webvan is coming regularly to your door, and it’s in a position to do that up-selling Shaheen is talking about.
Catering could be another great Webvan business. Given a little notice (preselling on the web site), Webvan could deliver all the elements of a party an hour before it starts. By getting together with some cooks on comarketing deals, Webvan could deliver the food and organize the entire party.
If Webvan can sell mental convenience as well as physical convenience, in other words, I think I’ll become a regular user of the service. And so will thousands of other people. Once we’re getting deliveries every week, then you can up-sell and move toward profitability.
Oh, and this can work for your business, too. Don’t just save your customer time. Save them thought. That’s what will make them a regular.
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