A Profitero study showed Target’s online prices were 25% more expensive than Wal-Mart’s, which were just slightly more expensive than prices on Amazon.
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The Twin Cities-based grocer, which has no stores, accepts orders for home delivery on the Internet and by phone. With the full range of supermarket inventory, it makes fresher produce a centerpiece of its value proposition by shortening the typical supply chain and investing heavily in what CEO Christopher Brown calls “chill chain management,” refrigeration storage technology in its warehouses and trucks, to support that.
SimonDelivers.com also keeps delivery costs down—a challenge that helped sink earlier web grocers—with a controlled route system instead of on-demand delivery. Consumers select a day and time from a window of several choices for regular weekly delivery, which lets SimonDelivers.com plan delivery truck routes more efficiently.
With an active customer base of about 40,000 households in the seven-county Minneapolis/St. Paul metro area, SimonDelivers.com earlier this year pushed its service area into five area satellite markets and in October expanded into Des Moines, Iowa, 250 miles from its home base. With Des Moines at the center of several other larger cities, SimonDelivers.com already is eyeing the possibility of further expansion to another city next year.
In the meantime, it’s taken on a challenge closer to home that strikes at the heart of any Internet retailer: consumers’ lingering apprehension about navigating the web. Since November, the company has promoted S.O.S., Simon’s Offline Service, on its web site and via e-mail. Under the service, shoppers who want help in negotiating the site for the first time can set up a time with a licensed, bonded SimonDelivers.com rep who will come to their home and walk them through the process. Within its first 10 days, S.O.S. handled a dozen home visits and generated five times as many calls with questions that customer service reps were able to handle over the phone, Brown says.
“People who were hesitant to call before now know that we welcome their questions,” says Brown. “It’s given the individual who has browsed the site but didn’t want to make the leap that extra support.”
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