Kroger realizes the importance of one-stop shopping. Many studies show that people today want to have more time to enjoy their quality of life. This is why Kroger has set up gas stations next to their super-markets. As people don’t necessarily like to wait in lines to get their food scanned to buy them, we are proposing to Kroger a new way of doing this key business. This proposal is not a substitute, rather a complement to what they already have by using today’s technology to better serve the public.

Reasoning:

Description of Project:

To help Kroger, as a contracted consulting group, to propel Kroger into the 21st century with leading B2C operations and processes. We would like to help Kroger implement today’s newest technology and make it work for them. To create a way for time-conscious consumers to shorten time spent grocery shopping in a manner that is beneficial to their schedules.

Kroger’s Operating Strategy:

To achieve the responsiveness of decentralized merchandising and operations combined with the economies of scale available from coordinating volume-based activities and consolidating support systems.

1. Advantages to Online Express Lane

a. Customer advantages

1. Less time spent shopping

2. Easy search utilities

3. Shopping List

4. Easy to keep tabs on your price totals

b. Advantage for Kroger

1. More incentive to join the Kroger Card program

2. Database is already designed

3. Companies will pay for special features on the web site

4. Compete in the newly established online market

2. Disadvantages

a. Possible loss of revenue from in-store impulse buys

b. Less competition for store shelf space

c. Initial setup of web site may be costly

d. Database may need modifications

e. High Bandwidth required

Outline

2. Existing Online Grocery Competition

a. Peapod.com – Boston, MA; Chicago, IL; Fairfax County, VA; Fairfield County, CT; Montgomery County, MD; Greater Washington, DC; Long Island, NY;

b. Netgrocer.com – FedEx (48 contiguous states)

c. Albertsons.com – LA, Portland, San Diego, Seattle, Vancouver.

3. Costs

a. Bandwidth

b. Database Design and Maintenance

c. Web page design

d. Additional Labor (express lane and stock crews)

Questionnaire

 

•How many hours per week do you spend at the supermarket? _____ hours

•What is your estimated expenditure on groceries per week? $______

•Do you (or someone in your household) have a Kroger card? Yes or No

•Do you feel that the time you spend grocery shopping could best be used on something else? Yes or No

•Do you have Internet access? Yes or No

•On a scale of 1 to 10 (10 being highest), how would you rate your competence at using the Internet?

•Would you take advantage of the ability to shop for your groceries online and pick them up from an express lane at the nearest Kroger Supercenter?

•If you were asked to put a dollar value on one hour of your weekly schedule, what would it be?

•Do you often buy products once you are in the store that you had not planned on buying when you walked in?

Customer Prepares order online

Customer pays for order online*

Customer arrives at store to pick up Groceries

Customer pays for order at counter

or

Typical Scenario

Restrictions:•Customer must have a Kroger Card•Orders must be pre-paid*•Orders must be $15 or above*•No post-order changes online•12-hour pickup time limitation•Additional items must be acquired by the customer on arrival

Preview order

*Customer needs additional items?*

Web Site Features 1. Secure account

a. Save shopping listsb. Save credit card infoc. Special promotions based on trends in shopping habits

2. Customer Friendly Interfacea. Purchase favorite items with a single click.b. Quick Lists (compilation of commonly purchased items)c. Search by category, nutritional values, price, and/or brand.d. Keep track of total amount spent.e. Sales

3. Featured Itemsa. Popular brandsb. New productsc. Advertising