SCHENECTADY, N.Y. -- The Golub Corp. here, parent company of Price Chopper Supermarkets, has dramatically changed its home shopping service. Rather than rely on a third-party company, Price Chopper has created a separate in-house division to handle its home shopping logistics.
The new division, called HouseCalls, handles order taking, fulfillment and delivery. Previously, the third-party firm OnCart, Lombard, Ill., handled orders and delivery while the retailer picked product in its stores.
When OnCart closed its operations earlier this year, Price Chopper brought order-taking and fulfillment in-house and contracted out delivery until the new division was ready for business. Orders for the new division are picked at the company's 20,000-square-foot fulfillment center in Latham, N.Y.
"We certainly found handling home shopping in our stores to be a cumbersome process, not efficient and not cost effective," said Joanne Gage, vice president, consumer and marketing services at Price Chopper. "But we had some regular customers. We didn't want to leave them without anything, so we kept that going internally until HouseCalls opened."
HouseCalls started taking orders in a "soft launch" beginning March 11. The new division replaced the previous service, which closed in February.
HouseCalls' strategy of "controlled growth" is already producing results exceeding expectations, according to Heidi Reale, general manager of HouseCalls.
"Every couple of weeks we add more territories we will deliver to as we hire more drivers and put more trucks on the road," Reale said. The service is currently available in 14 zip codes in and around the capital district of New York.
Achieving supply chain efficiencies, from order taking to fulfillment and delivery, are key to future growth, Reale said.
"Efficiency is our number one priority next to customer service," she noted."Every time we can take cost out of the system, it brings us closer to making the business profitable."
Volume will also contribute to making the business work, "but we want to do that at a rate that does not disappoint anyone," Reale said. "If we can keep customers coming back that's what's going to keep us in business."
HouseCalls offers more than 5,000 items, including dry grocery and perishables such as fresh meat, produce, deli and bakery.
Customers can find these items on the HouseCalls home page, housecallsonline.com, or in HouseCalls print catalog. Catalogs are published seasonally and the majority of prices remain in effect for the duration of the season. In the event a change is necessary, HouseCalls remains competitive with local supermarket prices.
Customers can place an order by phone, fax or over the Internet. To make order taking as efficient as possible, HouseCalls is developing its own proprietary order entry system that links all three types of orders.
"When we looked at systems sold off the shelf, they didn't link their Internet orders with phone and fax (orders)," Reale said. "We thought that was important because if, for example, you place an Internet order from work and you have to call us to change your delivery time, we have access to your order through a system that talks to each other. The customer service representative is empowered to do all kinds of orders."
More consumers than expected are using the fax and Internet to order groceries, which Reale called a positive on the financial side. "If the Internet orders come in automatically, there is no labor," she said. "So we're pleasantly surprised with the percentages of people using faxes and the Internet."
The order Management System helps HouseCalls organize orders in the most efficient picking sequence for employees picking orders at the fulfillment center.
"We eliminate a lot of the steps that are in a supermarket by doing the picking through our customer fulfillment center," she said. "The product goes right from the shelf into the bag."
The order management system also includes a tracking system because "just like United Parcel Service, we have to track every bag that goes out of our building," Reale said.
Once the order is ready, customers can pick it up at the drive through located at the fulfillment center.
For customers who request home delivery, HouseCalls uses its own drivers and vans. It has three full-time and a few part-time drivers along with three large and three small vans. More large vans will be added to the fleet in the next few weeks.
The service is free to customers whose orders are over $65. There is a $10 delivery fee with a minimum order of $30. HouseCalls offers next-day delivery within a two-hour window.