Analysts like Webvan’s delivery and loyalty changes
Webvan’s recent changes to its delivery pricing structure to cater to customers who spend more than $100 per order may help the online grocer maintain its customer base and capture some of the anticipated growth in the online grocery sector, analysts say. Webvan last week dropped delivery charges for orders of $100 or more and added a rewards program to encourage customers to shop more often. Paul Ritter, managing director of Strategic Research Advisors in Boston, says the delivery charge policy change is a sound strategy that will increase order size, which is critical to profitability. And offering the rewards program will help to convert many of the unprofitable customers into profitable ones and help to strengthen the bond between Webvan and its customers, he says.
But Webvan shouldn’t stop there, he says. “Webvan has to create a relationship with its online customers that is so tight that the customers would never be tempted to go elsewhere, online or offline, for their grocery needs,” says Ritter. “The company must continue to research what its most profitable customers like to buy, what motivates them to purchase one brand versus another, what limits their online buying, how they spend their time and grocery-related dollars. The more the firm knows about its customers the more it will be meeting their expectations.”
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