Physical distribution considerations for electronic grocery shopping

Abstract

Electronic grocery shopping (EGS) with direct home delivery is gradually becoming an option for busy families. The early EGS operators offer service built on top of the traditional grocery shop and the Internet is only used as a communication tool to transmit the customer order. To become a viable option for consumers the EGS has to be supported by a completely new logistics structure in which the Internet is used to connect all parties in the supply chain to the same real time information. As a result, the supply chain, all the way from the supplier to the household, needs to be redesigned. In the USA, dedicated EGS companies have entered the marketplace with investors backing them up. Huge losses are experienced in the battle against the traditional players. In smaller markets the funds needed for this kind of action are not easy to generate. Describes an evolutionary model for traditional grocery traders to start EGS gradually, mainly based on investments already made. Studies, in detail, the cost structure of some essential elements of the new supply chain and presents the initial results.