Chapter 1 STRATEGIES AND CHALLENGES OF INTERNET GROCERY RETAILING LOGISTICS¤ Tom Hays United States Army Huntsville, Alabama
[email protected] P³nar Keskinocak School of Industrial and Systems Engineering Georgia Institute of Technology Atlanta, Georgia
[email protected] Virginia Malcome de L¶opez Pegasus Group Inc. San Juan, Puerto Rico
[email protected] Abstract One of the most challenging sectors of the retail market today is the grocery segment, speci¯cally e-grocers. Since the mid-1990's multiple companies have entered the e-grocer market. Few have survived. What is it about e-grocers that make them fail? What makes them succeed? What can we learn from yesterday's e-grocers that will enable the new players to stay afloat or even be called \the greatest thing since sliced bread?" Given that the industry is still in \transition," it is di±cult to ¯nd de¯nite answers to these questions. With the goal of gaining useful insights on these issues, in this paper we analyze e-grocers, past ¤Forthcoming in Applications of Supply Chain Management and E-Commerce Research in Industry, J. Geunes, E. Ak»cal³,P.M. Pardalos, H.E. Romeijn, and Z.J. Shen (editors), Kluwer Academic Publishers, Dordrecht, The Netherlands, 2004. 1 2 and present, discuss di®erent business models employed, as well as order ful¯llment and delivery strategies. Among the three alternative busi- ness models, namely, pure-play online, brick-and-mortar going online, and partnership between brick-and-mortar and pure-play online, we ob- serve that the latter model has a higher success potential by combining the strengths and minimizing the weaknesses of the former two models.