CHRISTIANSBURG, Va. -- Home shopping may ultimately have the potential to dramatically alter the way consumers buy groceries, but Wade's Supermarket here said it had next to no effect on its customers during a home-shopping program test.
David McIntyre, data processing manager at Wade's, said its pilot of home shopping late proved unsuccessful. While many customers signed up to use the service, it only attracted two actual users.
"The break-even point for profitability was calculated to be 60 customers per week," said McIntyre. "We came nowhere near that, so it was clearly not going to pay for itself."
Of the two customers who did use the service, one was a single parent who picked up his children at a day care center next to the store. The other user liked home delivery because the customer had three children at home, which made it difficult to get to the store, McIntyre said.
While many retailers offering home shopping partner with third-party services to handle all or part of their programs, Wade's kept virtually all functions in-house, including taking orders, picking products and packing orders, said McIntyre.
In the pilot, Wade's offered the service free when customers picked up orders at the store, and home delivery for an additional $5 per order. The retailer hired a local company that delivered pizzas in the area to deliver its home-shopping orders.
Customers could place orders using an on-line service, selecting from more than 5,000 items, McIntrye said. "I could merge the orders into a single pick list and an employee could go through the store and pick for four customers at one time," he explained.
The picking process could be very time-consuming, he added, taking anywhere from 45 to 60 minutes to pick four orders.
Industry excitement about home-shopping's potential has been growing recently, with several high-profile retailers and third-party companies offering the service. However, significant questions still remain about what type of home-shopping model will be efficient enough to keep costs low and also attract enough customers to achieve significant growth.
McIntyre was unsure about why Wade's home-shopping program was unsuccessful. "Everyone we talked to said they loved it and it was a great convenience. Hundreds of people signed up, but when it came to actually using it, they didn't. Perhaps we're just in the wrong market for this type of thing."