Slim Pickin's For Wireless Grocery Service

Online grocery shopping via wireless phones has been slow going for Peachtree Networks, which introduced the service last summer.

The provider of online shopping infrastructure for supermarkets has added the wireless application for 10 grocery stores in the United States and Canada through Bell Canada and several U.S. wireless phone companies. Retailers are responsible for taking orders and delivering groceries, while Peachtree updates their prices and specials and offers additional services, such as recipes and an Ask the Dietician forum.

Though cell phone users appear to be ideal candidates for online grocery shopping, Peachtree executives and their retailers said only a minority are currently interested in the service.

“Online shopping is already a small percentage [of people], and wireless is extremely small in that market,” said Bob Mackalski, vice president of marketing at Peachtree, Montreal. “WAP online grocery shopping is a niche within a niche.”

He estimated that wireless orders account for 1 percent to 2 percent of a store's total grocery delivery orders.

Wireless users who have logged on to Peachtree from their phones have tried the service for its novelty and to check out retailers' weekly specials rather than to make a purchase.

“People are going to wireless more for information,” Mackalski said. “Then [they] are more likely to go to stores [than order online].”

Shoppers using wireless phones will likely use their Quick Lists, which include a list of groceries they purchase regularly, said Gregory Kahnin, president/CEO of Peachtree. They also view a limited number of recipes offered through Peachtree.

Louis Montuori, co-owner of Jefferson Market, New York, which uses Peachtree's services, said Internet orders are rare. Of Jefferson's average of 120 orders per day, about two are generated via the Internet, and he is unsure whether the Internet orders are placed from PCs or cell phones.

“Most people prefer to speak to a person,” he said.

Jefferson Market has had a home delivery service in place for 40 years, with eight full-time employees who take orders and pick groceries in addition to three trucks and six bicycles that are used to deliver the orders.

However, Montuori noted that customers who are new to his delivery service place Internet orders.

“This is something that can only help,” he said. “It will pick up as people get more computer-savvy.”

Peachtree executives also believe the wireless grocery shopping market holds promise for the future.

“As the wireless market grows, this may be a very valuable tool for driving people into the store,” Mackalski said.

Because Peachtree has an agreement with Bell Canada to promote its wireless service, Canadian grocers such as Strong's Market in Vancouver and Mourelatos Supermarkets in Montreal are using the service more than American grocers.

Future wireless offerings that Peachtree executives are considering include redeeming coupons via phones, paying for groceries using wireless phones and sending targeted e-mail with individual retailers' promotions to interested consumers.

Wireless ads are also a possibility, but “the eyeballs are not there yet,” Mackalski said.

Peachtree's technology supports personal digital assistants. Peachtree is not yet working with PDA manufacturers on the initiative, however.

Peachtree also recently launched its eFlyer service, allowing its grocers to e-mail targeted specials and new product information to their customers. The eFlyer will be integrated with grocers' loyalty programs. Grocers will be able to customize the flyers to shoppers' purchase profiles and interests.

Consumer goods manufacturers are interested in communicating with supermarket loyalty cardholders, Kahnin said, as are manufacturers outside the grocery industry. For example, an auto manufacturer could target a minivan flyer to people starting a new family.

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