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The way to profitable Internet grocery retailing – six lessons learned The Authors Kari Tanskanen, Kari Tanskanen is a Professor at the Department of Industrial Management, Helsinki University of Technology, Helsinki, Finland Hannu Yrjölä, Hannu Yrjölä is a Researcher at the Department of Industrial Management, Helsinki University of Technology, Helsinki, Finland Jan Holmström, Jan Holmström is a Senior Research Fellow at the Department of Industrial Management, Helsinki University of Technology, Helsinki, Finland. Abstract The launch of a wave of Internet grocery retailers over the last five years was a serious attempt to challenge the dominant supermarket business model. However, after a string of business failures, it is evident that the task of selling groceries on the Internet and delivering to the home of the consumer is more difficult than was anticipated. Six important lessons can be drawn, based on direct consumer experiences, from a pilot in the Helsinki area of Finland and the in-depth modelling and study of different logistics solution models from around the world. This paper discusses these lessons in detail. Article Type: Research Paper Keyword(s): Internet; Grocery; Logistics; Supply chain. Journal: International Journal of Retail & Distribution Management Volume: 30 Number: 4 Year: 2002 pp: 169-178 Copyright © MCB UP Ltd ISSN: 0959-0552 Introduction During the last five years we have seen the rise and fall of first-wave Internet grocery retailers. Most of the attention has been paid to the aggressive dot.com e-groceries that challenged the old players, mainly in the USA. These companies (for example, Webvan, Streamline, Homegrocer and Shoplink) invested hundreds of millions of dollars in building a grocery business from scratch but were never even near to breaking even before they ran out of money. They have all quite recently run out of money and been forced to cease their operations. The old brick-and-mortar retailers have taken over the best parts of their former challengers’ businesses and are continuing the development of the e-grocery business by integrating new concepts with the conventional grocery business. Examples in the USA are Ahold with Peapod and Safeway with GroceryWorks. This is starting the second wave of Internet grocery retailing in the USA, which combines the strengths of traditional retailing and electronic grocery shopping (see Table I for details of the major existing and former e-grocers). In Europe there have been very few dot.com e-groceries and none of them has seriously challenged conventional supermarket chains. Brick-and-mortar retail chains have dominated the development of electronic grocery shopping in Europe. The fear of cannibalising current business and a history of high investments in brick-andmortar facilities has also slowed down development. Nevertheless, electronic grocery shopping has grown in many parts of Europe. Its development and the solutions it has offered have, however, been different in different parts of Europe. The growth has been fastest in the UK, where Tesco industrialised the process of picking from the store and spread this concept quickly so as to cover 90 percent of the population in the UK. In France, all of the major e-grocers (Telemarket, Houra, AuchanDirect, and Ooshop) have dedicated distribution centres (DCs) for Internet customers. However, e-grocery markets in France are still very small. In The Netherlands Albert Heijn (AH), part of Ahold, is the furthest advanced e-grocery. In recent years they have served their customers from both shops and distribution centres, depending on location. In August 2001, they announced that they would stop home deliveries from supermarkets. They have just built two new distribution centres and will build at least one new DC to serve online customers next year. In Scandinavia, the development has been fastest in Sweden, where about 50 “physical” stores offer e- services, with a market share of about two percent. Electronic grocery shopping in Sweden started early, but its development has recently slowed down. Why did the dot.com e-grocers in the USA fail? Has the market potential of e-grocery been overestimated, as, for example, Ring and Tigert (2001), argue? Or have the egrocers so far offered the wrong solution to the right problem? Is there a way to do profitable e-grocery business? This paper will discuss these issues in the light of the results of a three-year, 1,5 million Euro’s Supply Chain Management for Electronic Commerce – ECOMLOG[1] research program of Helsinki University of Technology. Finally, we will present our prediction of when and how the e-grocery business will grow – and what the likely consequences are for traditional grocery retailing. What is the problem? A survey was recently carried out among 243 US consumers who currently buy their groceries online, asking their reasons for buying online (Morganosky and Cude, 2000). Over 70 percent of the respondents reported convenience and saving time as their primary reason for buying groceries online. The other reasons mentioned were physical constraints, hatred of grocery shopping or grocery stores, buying for business, an inability to avoid impulse buying, and the fact that the respondents do not like standing in line. Time saving as a primary reason for using e-grocery is well understood when we take a look at the time spent on traditional grocery shopping. According to studies conducted in Finland (LTT, 1995, 1997), households visit shops on average 4.6 times a week, spending on average 48 minutes on weekdays and 58 minutes at weekends. A total of 57 percent of the time is spent in cars and the rest in shops selecting and paying for the goods. This is approximately 200 hours per year, which means that households spend on average five full 40-hour working weeks annually doing their grocery shopping! In the case of combined trips the time spent on other shopping was eliminated, so the result is the actual extra time required for shopping for groceries. This leads us to the conclusion that current supermarket profits are based on the exploitation of working hours and transportation carried out by the customer. Or, to put it more positively: it is based on self-service. Figure 1 illustrates the current grocery supply network structure. The last arrow depicts self-service by consumers. The challenge of the e-grocery business is to turn that last arrow the other way around and deliver the goods effectively to their point of consumption. Is self-service a problem? Do people value the time they spend on grocery shopping? Strong opinions have been presented for and against, but there have been no serious studies. The problem of self-service is most evident for some special groups; for example, disabled people and people not owning a car. Also busy double-income families are generally considered a potential user of e-grocery services. These people, however, are only a small part of the total population. This group cannot provide markets that are big enough for profitable e-grocery. The critical question is therefore if e-grocery offers sufficient value that all or most types of consumers could be considered as potential customers. This, in turn, depends on both the quality of the service that the e-grocery offers and on the customers’ valuation of their spare time. The willingness of consumers to value time-saving can only be speculated about, as long as a credible alternative to self-service is not available. It is, however, obvious that the outcome is not likely to be a clear black-and-white picture. There are people who like all types of shopping and there are people who dislike all shopping, and most people are somewhere between these extremes. Regardless of how much one likes or dislikes shopping, there are often other things to do: work, rest, play and entertainment, for example. Past experience has also shown that households are willing to invest in products that save their spare time, such as washing machines, dishwashers and microwave ovens. However, the problem in e-grocery today is that it takes some time to learn new buying routines before the time-saving element is fully appreciated. Therefore, even moderate charges for the service may slow down to a remarkable extent the willingness of customers to shift from traditional shopping to eshopping. The electronic copy of a supermarket did not work E-grocery services have so far been electronic copies of the old supermarkets. The only service that most of them have provided is selection and home delivery of the goods ordered. From the customer’s point of view they are still self-service in many respects: the ordering process on the Internet is often time-consuming and has to be repeated each time to get the goods delivered. Then the customer has to wait at home to receive the delivery. Only in a few cases (Streamline, S-group) has the e-grocer offered a reception box that enables unattended reception of the goods to take place. An e-grocery business model could also make it possible for consumers to be offered new kinds of value-added services that are very difficult for shops in a physical store to offer the consumer. With a new kind of value-added services, e-grocers would be better able to fulfil the needs of different customer segments. An example of such a service was Streamline’s “don’t run out”. In this service the e-grocer automatically replenishes the consumer’s inventory of continuously-needed items. Such a service requires regular orders and is greatly facilitated by unattended reception. The service offered by Streamline was the most advanced of any e-grocer so far, but was still not able to gain market share quickly enough to cover the investments made in both expensive facilities and service development. Webvan, financially the strongest pure-play dot.com challenger of grocers, ignored the opportunities to provide new value-added services in e-grocery. Instead, the company invested heavily in highly-automated distribution centres, with the objective of reaching operational efficiency quickly. Webvan never reached enough business volume and customer density to break even before they ran out of money. Still, because of their service concept – ordering-based service, attended reception, short delivery windows and not focusing on building customer loyalty – they would probably have had difficulties in breaking even at any customer density. The value of the service offered was quite low to the customer. It also caused high operational costs: transportation could not be optimised and the unevenly-arriving nature of orders would not allow for a high utilisation rate of the automated distribution centre. An electronic copy of a supermarket did not work for Webvan. Recognising new opportunities to offer has also been difficult for European e-grocers. Because Internet sales have been a marginal business for the supermarkets, and because profitability has been difficult to reach, investments in developing service innovations have been small. Companies tend just to follow what their competitors are doing and none of them is willing to take risks by investing in developing services that the others can copy if they turn out to be successful. Therefore, European e-grocers too have adopted the easiest solution: copy the supermarket model onto the Internet. What is the real customer need? If the electronic copy of the supermarket does not work, what would be an alternative approach? In order to find that out, let us take the customer viewpoint on grocery shopping. To find out real customer needs we should be able to understand what the needs are that are actually created by what the current supermarket service offers. We argue that there are three common beliefs (often based on consumer surveys) about customer needs that should be questioned: 1. (1) Customers need to get all the items they have purchased instantly. 2. (2) Customers need a wide assortment from which to choose each time purchases are made. 3. (3) Customers want to choose fresh goods themselves. The customer is used to getting everything instantly by going to the store, but how often are the products used immediately? Usually only some continuously-used products that are out of stock in the consumer’s home are used immediately. These are typically items such as milk and bread. Providing an express service for small orders of such items for occasional customers is the surest way to ruin the profitability of an e-grocer. Instead of an occasional express service the e-grocery should focus on customer demands that can be fulfilled effectively and that correspond to the bulk of consumers’ purchases. Fulfilling instant needs will be good business for physical retail outlets, in the future as well as now, but the stores can, on average, be much smaller than today’s large supermarkets. All other demand could in principle be fulfilled by efficient e-grocery systems. The continuous need for a wide assortment is also, at least partly, a misunderstanding. According to studies made by the e-tailer GroceryWorks consumers typically buy repetitively the same goods each time they make grocery purchases. Approximately 200 items count for over 90 percent of a typical consumer’s continuous needs. These 200 items are, of course, different for different consumers, and this explains why physical supermarkets need a wide assortment so as to serve the mass market. But from the individual consumer’s perspective, the basic idea is that only very few choices are made in a supermarket that may have tens of thousands of items in its range of products. In grocery shopping, most of the consumer’s purchasing is routine work that is repeated over and over again, several times a week, from week to week, the whole year around. The routine purchases that evidently account for most of the average consumer’s groceries can effectively be shifted to an e-grocery service. This would enable the consumer to focus on those purchases where he or she wants to make real choices and that bring positive feelings. One common argument against e-grocery service is that consumers want to be able to touch and select the fresh goods that they buy. However, touching and selecting; for example, tomatoes in the supermarket, is not an actual need of the customer. The customer just wants to be sure that the quality of the tomatoes that he or she receives is high enough. In e-grocery this is just a question of trust. If the e-grocery is able to reliably provide customers with high-quality fresh goods, the consumer starts to trust the service provider and is no more interested in selecting the tomatoes while grocery shopping than in a restaurant. In many cases, e-grocers have even better opportunities to offer high-quality fresh goods than supermarkets. A former e-grocer, Homegrocer (CIES, 2000), conducted a study of tomato buying. It showed that in a supermarket supply chain each tomato is touched on average 11 times before it ends up in the home of the final customer, primarily because of the various stages in the supply chain and finally because of the people who want to squeeze tomatoes before buying them. With e-grocery, tomatoes are touched only three times before the final customer receives them. A blueprint for profitable e-grocery business What does a grocery retailer need to do to set up a profitable e-grocery channel? Next, we will present six actions that together outline a blueprint for setting up a successful e-grocery operation: 1. (1) Focus on customer density and build operating systems locally – copy and paste the working system to make it big. 2. (2) E-grocery is loyalty business – build and maintain trust. 3. (3) The buying power should be at least as strong as supermarkets have. 4. (4) Take care of operational efficiency and provide a high service level – utilise reception boxes and start with a store-based service – switch to a hybrid model and build dedicated fulfilment centres when local business volumes justify it. 5. (5) A good ordering interface and availability of product information are basic requirements – eDemand and eCategory management are powerful new opportunities. 6. (6) Enlarge the range of products offered to high margin non-grocery items when an effective logistics system to households is built and there is a base of loyal customers. Customer density One of the misconceptions about e-tailing has been that the Internet makes all businesses global or at least enables sales to large geographic areas. In e-grocery the reality is quite the contrary: the effectiveness of operations depends critically on local customer density. An empirical analysis made at the Helsinki University of Technology with a sample of real purchasing data (Yrjölä, 2001) suggests that the critical factor in reaching a profitable e-grocery business is sales per geographical area. According to these analyses, to reach the break-even point in Finnish markets, an egrocer’s annual sales per square kilometre should exceed 170,000 Euros. These calculations are based on picking the orders from a dedicated order fulfilment centre with a low level of automation. The cost of home delivery has been estimated by modelling home delivery with different service models with real grocery shopping data. From a logistical viewpoint the home delivery grocery business is quite similar to the garbage collection business: the markets should be taken over street by street. After an effective system for operating locally is developed, the way to make the business big is just to copy the concept to new local areas. Loyalty The cost of acquiring a new e-grocery customer is high, especially in relation to the low margins of the grocery business. Estimates of acquisition costs vary from $50 (Sherman, 2000) to $200 and up. For example Webvan spent $133 on marketing and administration for every single shopping basket purchased from the company during its lifetime (Business Week, 2001). When this is compared to the typical gross margin of a grocery purchase, that is, around $10 (Sherman, 2000), it is clear that occasional customers can never be profitable. Achieving customer loyalty requires the systematic building and maintaining of trust. In practice, this means putting high-quality and fast customer response in first place. The e-grocer is different from the supermarket in many critical ways. The most important is, however, that what you see is not always what you get. For fresh products and other items that are not uniform in quality it is the e-grocer that makes the final selection. For frozen foods the e-grocer takes responsibility for the food staying frozen. And also, in e-grocery, the consumer cannot easily substitute a product that is out of stock with one that is available when there is an error in the inventory record. The point is that without self-service picking and home delivery there are many situations where consumer preferences need to be identified and acknowledged and where quality easily suffers from poor organisation. To be competitive, the egrocer must win the trust of the customer and bridge the gap between what the customer sees and what he or she gets. Customer loyalty is also the cornerstone of effective logistics. The logistical costs of serving occasional customers’ momentary needs are substantially higher than those of serving the continuous needs of permanent customers. No other products are purchased as continuously and as frequently as groceries. Even though most e-grocery users will also use multiple channels for grocery purchasing, the e-grocer should always aim to supply the majority of each of their customers’ purchases. Selling 500 Euros’ worth per month to one household is much more profitable than selling 50 Euros’ worth per month to ten households. In a supermarket there is not such a difference. Buying power Starting a business from scratch is difficult and in grocery retailing it is even more difficult, because the merchandise comes from so many different suppliers, all having long-standing relations with established businesses. The customers of an e-grocer are not willing to pay more for their groceries than in the average supermarket. They might be willing to pay something for home delivery but definitely not more than is needed to cover costs. To be able to offer competitive prices the purchase prices should be at the same level as those offered by the competition. This means that starting from scratch will require a lot of capital, because the higher purchase prices at start-up volumes have to be subsidised. Only when the sales volume grows does the buying power grow. This clearly gives a huge advantage for established grocery retailers in comparison to the pure play start-ups when starting e-grocery as a complementary channel. Acquiring a traditional grocery retailer and expanding the business by developing a new e-channel is one way to break this barrier to entry. Operational efficiency and service level The cost of home delivery does not depend only on the density of drops. The service model, the way the delivery is received and the picking system also have a substantial effect on the cost structure. The most expensive service model among the ones generally used is attended delivery on the following day in one-hour delivery windows. The least expensive service model, unattended weekly delivery on a defined weekday, will reduce home delivery costs to less than a half (Punakivi and Saranen, 2001). The key to efficient home delivery is the unattended reception of goods. This can be achieved with a refrigerated reception box at the customer’s location or a delivery box. The delivery box is an insulated box that can be locked near the door of the customer’s home and keeps the merchandise cool or frozen until the customer comes home. The most efficient unattended delivery, however, can be achieved with shared reception box clusters. This is similar to garbage collection from a block of flats or an office building. One box is allocated to one delivery for a certain day. When the customer collects the order the box will report itself empty and can be used for the next customer’s delivery. The clusters can be located in an office building car park, where people can load their groceries into the car when leaving for home. Another option is to place the clusters in dense residential areas where a sufficient amount of households have access to the boxes, making the utilisation rate high enough to justify the investment by lower transportation costs. Our research has analysed the cost of picking from a simple distribution centre compared to picking from an existing store (Yrjölä, 2001) and the implications of investments in picking efficiency (Kämäräinen et al., 2001). The findings suggest that, in early phases, picking from an existing store is clearly the least expensive alternative. When the sales volume grows, picking from a dedicated centre becomes less expensive. This will happen when e-grocery sales volumes reach between Eur. 2 million and Eur. 5 million per annum. The cost of picking at this volume becomes less than 17 percent of the value of the goods, which has been estimated to be the cost of picking from a store. In volumes exceeding Eur. 10 million the cost of order assembly at a dedicated fulfilment centre approaches 10 percent of the goods value and in positive scenarios is well below it. This will enable profitable overall operation, supposing that the home delivery drop density is reasonably high. The required productivity can be achieved without substantial investments in automation. The profitability of heavy investments in automation in picking requires not only large volumes of orders, but also that capacity utilisation is high. High capacity utilisation is difficult, because of demand fluctuation between different days of the week. One operational option between picking from a store and a dedicated fulfilment centre is a hybrid model. This is a combination of a traditional store and a fulfilment centre. In this model, goods from selected product groups are delivered to the fulfilment centre on the basis of consolidation of confirmed customer orders. Thus, incoming goods can be sorted to customer orders without ever visiting the store’s shelves. This reduces work and costs. Ordering interface and product information The self-service supermarket did not take off before the manufacturers of grocery products started packaging their bread, milk, cereal and washing detergents for easy identification and handling by the consumer. To build the supermarket and put in the shelves was not enough. Change in the store’s structure also needed change in the packaging of the products to be put on the shelves. The situation in e-grocery is today comparable to having built a supermarket, but having no packaged products for the shelves. The basics for easy identification and handling on the Web still need to be put in place by product manufacturers. The requirement is for both easy product display and easy selection. Suppliers need to provide “pre-packaged” electronic product information that can be used directly by the e-grocer or be linked to the e-grocery site over the Web. However, it is not enough to display the product. The customer must also be able to select it easily. One popular solution is the standard shopping basket, where only frequently purchased items appear. For the manufacturer this means there is also a need to develop easy-to-use links between product information and ordering. For example, suppliers may need to provide a way to replace a product in a customer’s standard shopping basket when a product replacing a previous one is introduced. Also, suppliers need to develop new types of activating reminder – in other words, commercials – that help the customer change the selection him- or herself when an interesting new product is being introduced on the market. The supermarket and e-grocery services are not substitutes but complements. This is because you can use Web-based information technology to provide service offerings that the supermarket cannot provide on a cost-efficient basis. The simplest example is in category management. In a supermarket there are only a limited number of ways to present the products to the consumer. Using information technology, every customer can have their grocery offer tailored exactly to his or her needs – taking into consideration occasions, personal budget constraints, dietary preferences, medical treatments and even possible food allergies. But you do not have to restrict development only to product display. Using information technology, a product can be purchased in many different ways by the consumer, depending on the situation and the customer’s other daily activities. The egrocer can also make offers in a range of different situations outside the actual Webstore. For example, a consumer with a standard shopping basket could add a new product to the basket in many different ways. If the consumer has a bar-code scanner attached to his mobile phone, a new product may be selected by scanning the product package and adding it to the standard shopping basket using a short message (SMS). This could also be achieved without the scanner by just recording the product code from the package or an advertisement. Another opportunity is for the e-grocer to integrate with the activity planning of the consumer. For example, based on the occasion and number of people attending a party, the e-grocer can propose a menu and create a shopping list based on the menu. Web-based personal calendars and organisers may provide a practical basis for the service. Information service providers, such as Microsoft, have already started to look for new ways to make personal applications and passports central in simple e-business transactions. The step from transaction support to planning is short once the basis – the personal application – is in place. Enlarging the range of products E-grocery home delivery can help in building a new delivery network from suppliers of tangible products to households. In this network, adding a new product group into the selection is like adding a new TV channel for a cable TV subscriber. This distribution system could potentially deliver even purely local products or seasonal products that are not available in today’s stores. The home delivery network would become a critical part of community infrastructure (like water mains, electricity supply and garbage collection). When home delivery has reached a critical volume of business and density of drops it will also be economical to include mail delivery and smaller local distribution tasks from other freight carriers. These lessons can be summed up in three main considerations. First, in e-grocery retailing it is critical to link logistics strategy and marketing strategy. Marketing and logistics should be planned hand-in-hand in all phases of development. Second, profitable e-grocery is not just copying the old supermarket onto the Internet. Competitiveness is created by leveraging the real power of the Internet and the home delivery model in developing new value-adding services for customers. Third, egrocery should be seen as a means to develop unique relationships with consumers. A company that has integrated consumers to its information systems and brings daily groceries to his or her doorstep has powerful tools for developing new businesses. When will e-grocery work on a large scale? After the collapse of the first wave dot.com Internet grocery retailers there have been many comments about their mission being impossible in the first place. Most likely this is true. The way these companies tried to beat traditional grocery retailing was simply fighting too many wars at the same time. To gain buying power when dealing with suppliers, a large sales volume was needed. To get a large sales volume you needed a lot of new customers. To get a lot of new customers you needed attractive prices and to be able to offer an attractive range of services. And, most importantly, you had to make a profit before you ran out of money. Maybe the toughest part in this fight was the need to change consumer behaviour. The change is possible if the value offered is good enough, but it simply takes too much time for a challenger to succeed. When we look at today’s grocery market, after the pure play e-grocers have either collapsed or been taken over by “brick-and-mortar” grocery chains, there are two strong global alliances. Tesco and Safeway, as co-owners of GroceryWorks, will gain market share with their store-based picking model developed in the UK. The other strong player globally is Ahold, with Peapod. These companies have buying power, existing customers and sufficient funds to develop a profitable business out of egrocery. Tesco claims that its e-grocery is already profitable now and that 50 percent of the business comes from new customers. If the e-business is seen as purely incremental and all investments and general running costs of stores are allocated to the traditional business, a store-based model can be very profitable. Tesco allocates 12 percent of the value of the shopping basket as “other store costs” to the e-grocery orders and achieves 5 percent net profit per order with a 6 percent delivery fee (Business Week, 2001). Tesco claims that the distribution of cost between e-grocery and conventional shopping is not favoring the new channel. However, when the business volume grows it will eventually start cannibalising the traditional business and affect its profitability. This is the point in time when the new channel needs its own supply chain solutions and dedicated picking solutions, so as to gain better operational efficiency. The supermarket profitability equation is based on low operational costs in relation to sales volume. If the sales volume of the supermarket grows, the profit will also grow, because there is very little incremental cost as the customers do most of the work. Unfortunately, this also works the other way round. If sales volumes decrease, there are only limited opportunities to cut costs. This is why most supermarkets cannot loose more than 10 percent to 15 percent of their sales without going into the red. In our opinion, this leads to a development where a substantial proportion of larger supermarkets will gradually be closed in order to save costs and their business will be taken over by the e-grocery channel. The development will not be very fast in the next few years. This is because all the elements of the new services are still underdeveloped. The user interface, especially the ordering process and service models that make ordering unnecessary, are still a few years away. Unattended reception capability and delivery density will grow hand-in-hand, but very slowly. Unattended delivery solutions decrease home delivery costs substantially and it can be anticipated that, for e-grocery to succeed, the capability for unattended reception will increasingly have to be built in in new houses, office buildings and even houses in the city area. The development process has started with separate reception boxes, but to solve the problem on a large scale we will also need intelligent goods lifts as an integral part of larger buildings. This will also help in deliveries between companies. These changes will take time and the financial justification for the necessary investment will not be there before there are delivery services available. Market share growth is going to be slow up to around 2010, ending up between 5 percent and 10 percent. After 2010 there will be a period of faster growth, due to the fact that all parts of the service will have improved considerably and also that time has replaced a quarter of today’s consumers with youngsters brought up with personal computers. It is hard to predict what the “final” market share of e-grocery will be, because the market will look completely different when the change reaches saturation. The smaller stores near where people live and grocery shops in connection with petrol stations are likely to remain competitive. They also offer an easy way to get groceries that are instantly needed. Even the larger supermarket in shopping centres can survive by changing the emphasis from “large and bulky” to “small and enjoyable” shopping. All the indications are that people will have more spare time in the future and they will spend it on, among other things, shopping. We believe they are going to do it for their enjoyment – not to be a voluntary and unpaid labour force for the grocery supply chain. Note 1. Supply chain management for electronic commerce (ECOMLOG) is a threeyear (1999-2002) research program that focuses on finding new solutions for the last mile problem in electronic grocery shopping and on developing methods for collaborative planning leveraging e-business capabilities. The detailed results from the program have been reported in several journal articles: International Journal of Retail & Distribution Management, International Journal of Physical Distribution and Logistics Management, International Journal of Logistics Management, Supply Chain Management: an International Journal. Detailed information about ECOMLOG program can be found at www.tuta.hut.fi/ecomlog Table IThe major existing and former e-grocers Figure 1Structure of the traditional grocery supply network References (2001), "Tesco’s advantage by the numbers", Business Week, . [Manual request] [Infotrieve] CIES (2000), CIES conference in Berlin, Germany, . [Manual request] [Infotrieve] Kämäräinen, V, Saranen, J, Holmström, J. (2001), "The reception box impact on home delivery efficiency in the e-grocery business", International Journal of Physical Distribution and Logistics Management, Vol. 31 No.6, pp.414-26. [Manual request] [Infotrieve] LTT (1995), "Households’ buying habits for daily consumer goods 1994 and problems experienced by customers in shopping", . [Manual request] [Infotrieve] LTT (1997), "The perceived availability of daily consumer goods shopping services", . [Manual request] [Infotrieve] Morganosky, M.A., Cude, B.J (2000), "Consumer response to online grocery shopping", International Journal of Retail & Distribution Management, Vol. 28 No.1, pp.17-26.. [Manual request] [Infotrieve] Punakivi, M, Saranen, J (2001), "Identifying the success factors in e-grocery home delivery", International Journal of Retail & Distribution Management, Vol. 29 No.4, pp.156-63. [Manual request] [Infotrieve] Ring, L.J., Tigert, D.J (2001), "Viewpoint: the decline and fall of Internet grocery retailers", International Journal of Retail & Distribution Management, Vol. 29 No.6, pp.264-71. [Manual request] [Infotrieve] Sherman, R.J (2000), "Fulfilling the demand of a new economy", Council of Logistics Management Annual Conference, New Orleans, . 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