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Prize winner
Authors: Kenneth K Boyer (Michigan State University); Mark Frohlich (London Business School (LBS))
Published in: 2002

Abstract

During the US Internet frenzy of 1998-2000, numerous new, pure play Internet grocers promised consumers that they could have groceries at prices equal to or lower than existing bricks-and-mortar grocery stores, while simultaneously enjoying unparalleled convenience without having to leave the house and battle the crowds at the stores themselves. Unfortunately, as has been illustrated by the widely publicised collapses of these high profile Internet grocers, there was a substantial gap between theory and practical application. What the grocers discovered was that covering the 'last mile' to consumers' homes to deliver groceries to their doorstep represented a substantial challenge with numerous operational and logistical difficulties. This case reviews the business models employed by current grocery home delivery companies and contrasts bricks-and-mortar retailers with Ocado, a greenfield, home delivery only grocer. The case provides a forum for analysing technological changes, cultural differences (Britain vs US), and, on an operational level, provides a delivery scheduling exercise with customised spreadsheets which can be used to illustrate the challenges of developing delivery routes. These spreadsheets are available as the teaching note supplement '602-057-9' and are available on CD-ROM.

Teaching and learning

This item is suitable for undergraduate, postgraduate and executive education courses.

Time period

The events covered by this case took place in 2002.

Geographical setting

Region:
Europe
Country:
United Kingdom

Featured company

Ocado
Industry:
Grocery home delivery

About

Abstract

During the US Internet frenzy of 1998-2000, numerous new, pure play Internet grocers promised consumers that they could have groceries at prices equal to or lower than existing bricks-and-mortar grocery stores, while simultaneously enjoying unparalleled convenience without having to leave the house and battle the crowds at the stores themselves. Unfortunately, as has been illustrated by the widely publicised collapses of these high profile Internet grocers, there was a substantial gap between theory and practical application. What the grocers discovered was that covering the 'last mile' to consumers' homes to deliver groceries to their doorstep represented a substantial challenge with numerous operational and logistical difficulties. This case reviews the business models employed by current grocery home delivery companies and contrasts bricks-and-mortar retailers with Ocado, a greenfield, home delivery only grocer. The case provides a forum for analysing technological changes, cultural differences (Britain vs US), and, on an operational level, provides a delivery scheduling exercise with customised spreadsheets which can be used to illustrate the challenges of developing delivery routes. These spreadsheets are available as the teaching note supplement '602-057-9' and are available on CD-ROM.

Teaching and learning

This item is suitable for undergraduate, postgraduate and executive education courses.

Settings

Time period

The events covered by this case took place in 2002.

Geographical setting

Region:
Europe
Country:
United Kingdom

Featured company

Ocado
Industry:
Grocery home delivery

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