Safeway’s new GroceryWorks launched
Safeway has re-launched its home shopping service, GroceryWorks, now in partnership with UK-based Tesco.
Safeway’s new home shopping service in the US has been formally launched in the Portland-metro (Oregon) and Vancouver (Washington) areas. GroceryWorks, an internet-based service, is owned 50% by Safeway and 35% by Tesco, the UK’s leading supermarket chain. In the UK, Tesco operates the highly successful Tesco.com home shopping service. In June last year, Tesco paid US$22m in cash, as well as intellectual property and technical resources, for its 35% share in GroceryWorks. GroceryWorks was originally launched in the US by Safeway in January 2000.
UK experts A team of experts from the Tesco.com headquarters in Hertfordshire, England has been working alongside specialists at GroceryWorks headquarters near Safeway Inc. head office in California to tailor the successful procedures used in the UK to match the needs of American customers.
Low prices, range and convenience According to Safeway’s EVP, CFO and President of e-commerce business, Vasant Prabhu, the online grocery market in the US has changed dramatically in the last few years. He believes that success will come from those who also have bricks-and-mortar stores – which lend significant purchasing power, as well as a well-established brand and distribution infrastructure.
And John Browett, Chief Executive of Tesco.com adds: “Our research has shown that customers in the US want the same as their British counterparts from their home shopping service. Low prices, a full range of products and convenience. Unlike the warehouse models, we deliver products to customers from their local store so they can choose all their usual products at the same prices.”
Loyalty benefits When customers visit the site, software first checks to see that they live in an area covered by the service. Payment is made by credit card. Nearly all the items stocked in Safeway stores are available on the web site, at the same in-store prices. Club Card members will be able to order Club Card Specials and will be able to access their regular inshore purchases, as well as online purchases, using a ‘My Favourites’ feature. They will continue to earn bonus air miles in the Safeway/United Airlines Mileage Plus programme, and Safeway ‘savings awards’, and participate in promotions and sweepstakes.
Laid out like stores The design of the web site is similar to the stores, with products grouped into sections as they are in the store aisles. Fruit and vegetables can be selected for degrees of ripeness. Goods ordered before 10am can be delivered the same day. After that, deliveries are next day between 10am and 9pm within a two-hour window chosen by the customer. Customers pay $9.95 per delivery. There is no minimum order.
Proven formula Tesco.com is the world’s largest online grocery retailer and one of the UK’s most popular online shopping destinations. Covering 95% of the UK, the site has over 1m registered users and receives over 70,000 orders per week. Tesco.com is on target to achieve a turnover of over £300 million this year and, and according to recent statistics from NetValue received over 1.6 million unique visitors during November 2001. Tesco.com operates an internet grocery home shopping service in the UK, Republic of Ireland and will shortly be launching in South Korea. Tesco.com is a subsidiary of Tesco plc.