The online retailer has spent nearly $300 million acquiring three shipping software vendors over the past nine months.
Stop & Shop Supermarket Co. is installing web-enabled kiosks from NetGrocer.com to offer items that the stores don’t stock.
How many ways can the web and stores be integrated? NetGrocer.com has created another example of how the two channels can support each other via a kiosk. And the Stop & Shop Supermarket Co., New England’s largest food retailer and a division of Dutch company Royal Ahold, is helping NetGrocer prove the concept.
NetGrocer.com, which offers non-perishable food items delivered by Federal Express, reasoned that its depth of products might appeal to supermarket chains which can’t carry everything any shopper might want, but still would like to not risk losing a customer who can’t find what she wants. And so it developed a web-enabled kiosk for supermarkets that will feature only products the supermarket doesn’t carry.
When a customer asks for such an item, store personnel can direct her to the kiosk, branded “The Endless Aisle,” where she will order it from NetGrocer. It’s up to the store whether the item is delivered to the customer’s home or to the store for pick-up. “The sale is 100% incremental,” says Lisa Kent, CEO of Nexpansion, parent of NetGrocer.com.
While the kiosks are just rolling out now, consumers in tests have been enthusiastic about the concept, Kent says. “The idea was extremely compelling to them,” Kent says. An astounding 50% said they would switch supermarkets to take advantage of the Endless Aisle, she reports.
Retailers get the revenue from the sale and mark up the price according to their own guidelines. They pay a fee to NetGrocer for processing and fulfilling the order. Retailers are responsible for marketing the service and providing the real estate for the kiosks.
The concept grew out of NetGrocer’s work with brand-name manufacturers. NetGrocer had worked out a deal with certain manufacturers that when a customer called looking for a product that was not available in her immediate area, the manufacturer would arrange with NetGrocer to take the order and deliver the product to the customer. “The manufacturers didn’t want to turn the customer away, but they also didn’t want to send her 100 miles to a store that carried the product and they didn’t want to make her buy a case quantity,” Kent says. “So they turned to us.”
NetGrocer will match its product list against the store’s product list, then make available only what the store doesn’t carry. The program can be configured so that smaller stores in a chain have available via the kiosk all the items that larger stores carry, Kent says. The kiosks are provided by Kiosk Information Systems Inc., but Kent says NetGrocer does not have a long-term contract with KIS.
Kent says NetGrocer has already signed two other chains, which were not ready for public announcements, and is in discussions with others.