Understanding What The Internet Is Good At

At the risk of confirming whatever suspicions you may already have about my being an Internet-worshipping geek, I’m going to confess that the highlight of my week last week was when I came home and found a postcard in the mail from Peapod.

As you may know, Peapod is an “online grocer,” and allows the ordering of groceries over the Internet for home delivery. The reason I was so excited was that for the first time, Peapod was offering its service for free where I lived, as long as I ordered over $60 worth of groceries. With no cost to me, I could finally justify the convenience of online grocery shopping.

Peapod is a great example of how the Internet can often improve on the physical world:

• Searching. I can type in any product (by brand or by item) and Peapod brings up a list of all items that contain that sequence of letters. If I type in “spice,” for example, I get a list of about 20 different spices, along with detail on Old Spice Deodorant (don’t worry, I don’t use that brand). If you’ve ever wandered the aisles looking for a specific product at the market, you can appreciate the benefit of a search capability.

• Sorting. Within any product category, I can sort alphabetically, by size, price, special offers, etc. My favorite is the ability to sort by “unit price,” a function that allows me to easily ascertain the true cost of products. This is particularly useful when buying something for which I am brand neutral, like salt, where the price ranges from $.02 an ounce to $.09 an ounce, a 350% difference that is not obvious at the market itself.

• Personalization. I can create a standard shopping list for myself. Once it’s entered, all I have to do each week is bring up my saved list, and click on the items I want. Given that about 85% of what I buy each week is the same, I can quickly complete my list. Peapod meanwhile, has introduced a considerable barrier to exit for me, as any decision to switch to a competing provider down the road will require that I reenter the 125 items on my personal list somewhere else.

What I find most interesting about the introduction of Peapod into my area is the impact that it will have on the other supermarkets. Peapod partners exclusively with Stop and Shop in the Boston area, and as a Peapod customer, I now have only one choice in who I shop with. Although Star Market has had my business for about five years, overnight I have made the decision to switch to Stop and Shop.

For those of you who are in a “traditional” business, and who think that you don’t yet have to incorporate the Internet into your planning, consider what it will cost Star Market in market share when all the people in my area start shopping with Peapod. Although Star may beat Stop and Shop along traditional supermarket parameters — more parking, shorter lines, longer hours, etc. — Stop and Shop’s foresight in forging an exclusive partnership with Peapod, even though they are not a web centric business, will cost Star many of the customers it has worked so hard to acquire. Only by becoming familiar with the Internet and its evolving business models, was Stop and Shop management able to recognize the opportunity that Peapod represented.

Now if I could only teach Peapod how to pick out birthday cards for my mother.

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