NETGROCER ADDS NONFOOD PRODUCTS

NORTH BRUNSWICK, N.J. -- As third-party home-shopping companies continue to reach out to customers on-line in an attempt to gain a share of grocery dollars, these organizations also are striving to carve out a niche and gain customer loyalty. In the newest effort, the nationwide on-line retailer NetGrocer here has reorganized its home-shopping Web site to a new supercenter model, where home shoppers

NORTH BRUNSWICK, N.J. -- As third-party home-shopping companies continue to reach out to customers on-line in an attempt to gain a share of grocery dollars, these organizations also are striving to carve out a niche and gain customer loyalty. In the newest effort, the nationwide on-line retailer NetGrocer here has reorganized its home-shopping Web site to a new supercenter model, where home shoppers can purchase items ranging from nonperishable grocery items to books and music.

Since the switch to the supercenter model, the on-line retailer has seen each customer's transaction size increase 25%, according to Fred Horowitz, president and chief executive officer of NetGrocer. "We've increased the number of conversions into the store by 50%. That means we converted 50% more of the lookers into buyers," he said. NetGrocer made the switch to its new model Feb. 10.

"Basically, we turned from an on-line grocery store into an on-line supercenter," said Horowitz. "That's one of the benefits from the Internet. You can sell a broad range of products ranging from bread to candles."

The site, www.netgrocer.com, now offers items in three categories: a grocery center; a health, beauty and medicine center; and a gift center including CDs and books.

"We're not going to compete with Amazon.com," Horowitz said. "Like any major supercenter, we carry only the Top 50 books and the Top 50 CDs."

Of the more than 6,000 stockkeeping units offered, 90% are stored in Netgrocer's 100,000-square-foot warehouse here. The on-line retailer delivers its products nationwide via Federal Express. The shipping charge is typically 10% of the order total, beginning at a rate of $5.99.

The site offers on-line shoppers a weekly instant coupon page, which Horowitz described as the equivalent of an "in-store circular." Customers click on the coupon, which is automatically put in the shopping basket along with the order.

"We depend greatly on the 'word of mouth' to spread our name," said Horowitz. "Our repeat customers make up 60% of our business. Seeing that type of retention is very exciting."