GRAND RAPIDS, Minn. -- A Gordy's Foods store here has unveiled an online shopping service geared in large part to the summer resort community in this area, providing vacationers with groceries before they even check into their cabins.
The service has been available since June at www.gordysfoodsgrandrapids.com, which first emerged on the Internet six months earlier. The store is one of eight units in Minnesota operated by Gordy's, based in Worthington, Minn., which also runs seven stores in South Dakota. Each has its own Web site, though most don't offer online shopping.
The shopping service is hosted by HometownGrocers.com, Northfield, Minn., which provides online shopping for over 100 Hy-Vee stores, among others. In addition, the store offers a catalog-based toll-free phone service, also hosted by HometownGrocers.com. "The phone is simpler than the Web and some older people lack a PC," said Ron Cash, store director of the Grand Rapids store.
The overall service, which offers the same products, prices and ads as the store, has generated about 40 orders per week, averaging more than $100 each, with about half of the total dollar volume coming from the resort community, said Cash. Other orders have come from local residents and from the Elder Circle community service group that shops for the elderly and shut-ins.
Cash expects to do a brisk online business during the harsh Minnesota winter among both residents and winter sport enthusiasts. He said his is the only site to date in Northern Minnesota offering online grocery shopping.
The store, located in a popular vacation area replete with hundreds of lakes, has partnered with 12 of the larger resorts "within a reasonable distance of the store," said Cash.
The resorts "are excited to offer this service to their customers." The resorts have built in a link to the store's Web site, offering vacationers an opportunity to buy groceries online in advance of coming to the resort and have the goods delivered and stocked in their cabin's refrigerator prior to their arrival. "The last thing they want to do when they get there is go to the supermarket," Cash said.
Offering both home delivery (with its own truck) or store pick-up, the store charges $4.95 for picking the order and varying amounts for delivery, based on distance from the store. About 75% to 80% of orders are picked up. The store has a separate "online" door where shoppers can drive up, announce their name into a voice box, and wait in their car no more than 10 minutes for the order to be brought out, without getting out of their car -- especially significant in the winter.
Cash said he treats the online activity as a separate business, paying for labor and advertising separately. He uses one full-time employee just for picking and delivering online orders, plus three part-time workers. He also plans to partner with a local liquor store to offer alcoholic beverages, which his store can't carry. Ads for the service run in regional shoppers, weekly fliers, on billboards, on cable TV and on the radio.
So far, the bottom line for the online operation looks like it will be higher than that of the regular store business, Cash said. In particular, resort orders, which often have long delivery trips, are indicating an 8% net profit, he noted "If you deliver six to eight orders to one resort that's 18 to 25 miles away, you can charge $25 to $30 for delivery plus the $4.95 picking cost," he said.
The store's customers provide plenty of feedback on the online service, said Cash. And they are forgiving if the store makes a mistake. "They want the service," he said. The challenge for the store has been learning the technical side of online selling. "We're not any more computer literate than we have to be," he said.
Cash said he sees the online service as "a marriage of our supermarket expertise and the technical expertise of HometownGrocers," with whom the store has worked closely.
