In today’s world, grocery home delivery has become both accessible and affordable with many grocers offering this service as an option. This was not the case in the early days of this service as the initial push to start this up was quite small. Finding a grocer who offered delivery 20 years ago was akin to seeing a UFO. As with every successful service, grocery delivery did not have an auspicious beginning.
In 1996, the world was vastly different, and technology was just starting to percolate in terms of access and ease of use. The first e-commerce businesses started cropping up on the fledging internet during this year and one of them was Webvan. Webvan was one of the first grocery home delivery services available, and they started up in California. The Dot-Com Industry was at full mast with many companies profiting off of the rapidly expanding internet and the sky-high American economy reflected this.
The next year in 1997, HomeGrocer started up in Washington state with a warehouse and a fleet of vans to haul groceries to families who ordered online. HomeGrocer expanded into other markets around the country including Illinois, Texas, Georgia, Oregon, and California. As with any economic bubble, the bubble was going to burst at some point soon and unfortunately, it burst a few short years later.
HomeGrocer ended up selling their business (which by then was losing money) to Webvan in 2000. This purchase did not help Webvan’s case as they too went out of business shortly afterwards in 2001. Was it a simple case of the dot-com bubble bursting and taking these companies down with it? Was it the lack of investment into keeping the businesses relevant? It was a little of those two mixed in with a lot of operational problems being so far ahead of their time. With razor-thin margins on groceries and the large amount of capital needed to invest in infrastructure and technology, the world just wasn’t ready for grocery home delivery back then.
It was a simple case of waiting the market out for the technology to catch up and surpass the amount of money needed to run the business. With better technology comes faster speeds and lower prices and floors of entry to get into the business. It goes without saying that were it not for these two brave pioneering companies 20 years ago and their subsequent failures, the business of grocery delivery today would either be vastly different or possibly non-existent.
Source
https://www.onespace.com/blog/2018/10/online-grocery-lessons-history/
