FURTHERING THE INTEGRATION OF ONLINE MARKETING IN THE GROCERY ...

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FURTHERING THE INTEGRATION OF ONLINE MARKETING IN THE GROCERY ...

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• Publié par: akajarym
• Nombre de lectures: 104
• Langue: Français

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Proceedings of ASBBS

Volume 16 Number 1

FURTHERING THE INTEGRATION OF ONLINE

MARKETING IN THE GROCERY INDUSTRY

THROUGH BUSINESS MODEL AND VALUE

ASSESSMENT

Dickey, Irene J.

University of Dayton

[e-mail]

Lewis, William F.

University of Dayton

[e-mail]

ABSTRACT

Recent prominence of online marketing in both the academic and trade literature reveals a mounting but

confusing body of knowledge. Each year since consumer products have been available for sale online,

news of the opportunities associated with online grocery shopping has been widely reported. In the

beginning, the outlook was encouraging and grocers forged on. This article examines various business

models that could be used by online grocers and the customer value these are designed to deliver. Also

examined is the impact that the development of new, effective business models (which includes e-business)

could have on future trends in online grocery shopping. The nature and key determinants of the value

which can be delivered to consumers with an online business model in the grocery industry are examined

to assist in the development and presentation of a framework of recommendations for business model

advancement for grocers which suggests whether an online channel should be included as an ancillary

business of traditional grocers or whether online grocery businesses can succeed on their own as stand-

alone businesses. This study makes a contribution to research by expanding the horizons of previous

studies on the value of electronic marketplaces into the grocery industry. The results can be directly

applied to the grocery industry in tailoring marketing programs.

INTRODUCTION

The grocery environment is extremely competitive and dynamic with retailers constantly developing and

enhancing their product and service offerings, promotions, communications, and their formats.

The

Internet has entered into the strategy equation for many grocery retailers, either as a consideration or as a

viable communication and distribution channel.

Alba, et al. (1997) reported that non-grocery store

alternative shopping modes include telephone, television, catalogues and online shopping and that online

grocery shopping accounted for 4.2 percent of all grocery shopping in 1997.

According to Jupiter

Research, grocery is likely to become one of the fastest-growing categories in online sales in the next five

years (Internet News Bureau 2004). What is apparent, however, is that this sector is still largely under-

penetrated in online sales relative to overall grocery sales. Jupiter expects a 31% compound annual

growth rate through 2008, with online grocery sales likely hitting $6.5 billion by that time. Other market

research predicts huge growth in online groceries and the venture capital to be made available to

accomplish this. Andersen Consulting predicted that U.S. households buying food and other household

services online should grow from $200,000 in 1998 to $15 to $20 million by 2007 (Mainelli 2000). The

report estimates $29.3 billion will be spent on online groceries and related supplies by 2005.

Still, barriers exist for both retailers and consumers. McTaggert (2004) suggests that grocers are slow in

adopting online business models and the main reason is that shopping on the Internet for groceries

involves a huge behavioral shift for consumers. Such an adoption may take time for some consumers, but

that brick-and-mortar retailers might be wise to offer online ordering and in-store pickup to start with.

This is just one of many models that may offer a great deal of convenience and other value for consumers.

Therefore, the purpose of this article is to investigate how the ability of the marketer to be successful in

ASBBS Annual Conference: Las Vegas

February 2009