Internet grocer SimonDelivers.com plans expansion
With $21.3 million in new financing secured earlier this year, Internet grocer SimonDelivers.com is moving forward with plans to expand beyond its Twin cities base into a second market, the company tells Internetretialer.com. While the location of the planned expansion isn’t yet disclosed, the strategy is already clear: SimonDelivers.com will use the same model of one-step distribution and controlled route delivery that’s made it profitable on operations in the Minneapolis-St. Paul area.
The company cuts out middleman brokers wherever possible to supply its warehouse directly from farmers. Chief Financial Officer Chuck Karpinske says that not only trims handling costs, but time. Customers get produce that’s up to a week fresher than they’d get in a supermarket that obtains produce via other distribution channels, he says. “As a result, a higher percentage of our sales come from produce than at a typical grocery store,” he adds.
The rest of SimonDelivers.com’s strategy is controlled route delivery. Unlike an on-demand delivery model in which customers can schedule delivery for virtually any time within a window of two to three hours, SimonDelivers.com narrows the choices for customers so as to schedule deliveries on regular routes. “We don’t want to do on-demand delivery. That model isn’t able to get enough orders per day to get delivery costs down,” says Karpinske.
Instead, SimonDelivers.com requires shoppers to commit to a regular day and time for delivery, allowing them to choose from up to four days and two to three time slots per day. Concentrating more deliveries within a shorter time span and knowing in advance when the orders are coming in lets the company keep its delivery costs down, Karpinske says. Shoppers unable to take delivery on their regular day can arrange to add their order to another route on another day, a service that’s available on a first-come, first-served basis, he adds. SimonDelivers.com fulfills orders out of its own 150,000 square-foot warehouse.
Back...
