Can grocery delivery be exploited as successfully as pizza delivery? Colin Chambers thinks so.
For the past six weeks Mr. Chambers and his two partners in Lifestyle Services Inc., a Columbia-based grocery and pharmacy delivery venture, have been dispatching drivers to pick up grocery and medicine orders at a Valu Food grocery on Columbia's east side. The orders are delivered to customers' home or business locations -- the same day if needed.
"A lot of companies have tried this and failed. So making this a success is in some ways totally uncharted territory," said Mr. Chambers, 30, a former marketing associate with the Super Fresh grocery chain.
Well, not completely uncharted territory. But it appears to be shaping up as the next home shopping battleground, at least in the Baltimore area.
One business, Bethesda-based Shopper's Express, has been at for six years. Mr. Chambers' two partners in Lifestyle are former Shopper's Express employees; Mark Mead a delivery operations director; and Nicholas Soufi, who held several posts in the operation.
Shopper's Express, which operates in 34 states, has a deal with Safeway to deliver groceries, flowers and pharmacy items in the Washington metropolitan area. It recently added Columbia to its service area and has targeted expansion into the Baltimore markets for early next year, said Kevin Sheehan, vice president for marketing.
Super Fresh has tried grocery delivery and pulled back for more study. And Giant Food, the largest chain in the Baltimore-Washington area, has scuttled the idea for now, due to concerns about customer service and liability, said company spokesman Barry Scher.
But Mr. Chambers and Mr. Soufi think grocery home shopping is the wave of the future and has national growth potential.
"We certainly think the tele-shopping business is where retailing is headed. Customers love it. The problem is on the retailers' end. They have concerns about how a third party is going to present their image," Mr. Chambers said.
The partners believe their company has a business plan that will help it be locally successful and grow into a national player in the grocery delivery industry.
"First we're building a very close bond with a grocery chain so that we're successful locally first," Mr. Chambers said.
Delivery trucks feature a "Valu Food Home Shopping Club" sign, not a Lifestyle Services logo. The business has also tried to forge links in the community by delivering a county extension office pamphlet about nutrition in deliveries and setting up a program to educate county children about the food industry at Valu Food stores.
"We're very volume-driven, which forces us to go out and find customers. You can't just set up a grocery delivery service and expect customers to come to you. Also, we have the technological support to make the system work smoothly," he said.
That technology consists of a data base that lists every item stocked by Valu Food -- about 30,000 in the inventory.
The data base is updated periodically to keep it current and highly specific.
For example, Valu Food stocks 34 different styles of Crest toothpaste -- from baking soda gel in a tube to tartar control in a squeeze package.
The data base also stores a history of customers' orders; customers get a printout of their order and Valu Food executives get a potential mother lode of information about the buying habits of customers using the delivery service.
Lifestyle shares all of its customer history data with Valu Food. One of the questions customers are asked when they call in their first order to Lifestyle is where they usually shop. So far, Lifestyle said, 55 percent of customers say that they normally shop at Giant; 33 percent say they're loyal Valu Food shoppers.
The potential for tapping new customers, particularly those who don't live near a Valu Food, hasn't been lost on Valu Food.
"I love this idea," said Dr. Allen Karpe, a pharmacist who heads up Valu Food's Pharmacy and Health and Beauty Care division. "It will help us broaden our customer markets -- and profits. If the order and our profit is big enough, I'll have these guys deliver anywhere in the state."
Among the customers the company has targeted are senior housing complexes, assisted living centers for the mentally retarded and other housing with the potential for large orders.
For example, Catholic Charities has been using the service for Emanuel Homes, a senior housing complex that it operates in the county, Mr. Chambers said.
Mr. Chambers and Mr. Soufi wouldn't say how many customers they've serviced in their first month and a half, but they claim that the customer base has grown sixfold -- a 10 percent weekly growth average.
The three entrepreneurs say they spent two years researching the venture. After rounding up some private venture capital -- they declined to say how much -- they were turned down by the major players in the grocery industry in the Baltimore-Washington area -- except by Valu Food.
In March, the Baltimore-based chain with 16 stores (three in Howard County), agreed to test market the service in the Columbia area this fall. Now the grocery chain, which targets price-conscious shoppers, has approved expanding delivery to all of Howard County, except a small area near the Montgomery County line.
The Randallstown and Pikesville sections of Southwest Baltimore County will be added next week.
From there, Lifestyle hopes to extend its service into Catonsville and then trek around the Beltway to communities in northwest and north Baltimore County.
The system works this way:
Customers, alerted to the service through in-store and mail promotions, call in their orders to Lifestyle's local phone number. The company hopes to add an 800 line as it expands regionally.
Orders are plugged into a computer and transmitted to Value Food's full-service grocery -- which includes a deli, florist, pharmacy and bakery -- in Columbia's Kings Contrivance village. Store employees fill the orders and Lifestyle's drivers handle grocery deliveries in the afternoon and evening, and flowers and medicines any time between 9 a.m. and 9 p.m.
Valu Food pays Lifestyle a set fee for each delivery and customers are charged a delivery fee; the same system applies at Shopper's Express.
Lifestyle's grocery delivery fee is $9.95; fees for delivery of pharmacy items range from 99 cents to $1.99, depending on the size and value of the order.
Shopper's Express also charges $9.95 to deliver groceries; flowers are delivered free. The fee for delivering pharmacy items will be dropped next month.