webvansattemptedcoupdetatinthegroceryindustry.docVIP

Webvans Attempted Coup Detat in the Grocery Industry Cara Peters, Marilyn Okleshen, and Dinesh DCosta Louis Borders was an innovator. He began his career in the book business, and started to delve into other domains after he sold Borders Books in 1992. In 1996, Borders had a vision for revolutionizing the grocery industry. He dreamt of creating a web-based firm that delivered any product to the consumers front door within a thirty-minute time frame. This was the inception of Webvan. Borders was aware of the risks involved in such a venture, and predicted that Webvan would either turn into a huge success or a dismal failure. Grocery Shopping At the time, in the United States, consumers spent about $650 billion annually on groceries.1 Most of these groceries were purchased at local supermarkets. In fact, a study conducted by Supermarket G found that 83% of grocery products were bought at a supermarket.2 The average American household made two trips to the supermarket per week and spent approximately eighty-six dollars on groceries each week.3 Grocery shopping behavior was considered a routinized choice behavior, requiring little thought, effort, and decision making. Most routinized choice behaviors consisted of merely carrying out an existing decision plan.4 Consistent with this, consumers reported that most of their supermarket purchases were pre-planned.5 As such, consumers often considered grocery shopping part of their weekly chores. Almost fourteen percent of the adult population in the United States stated that they hate shopping for groceries. Women, ages thirty-five to forty-nine years old, were the most likely group to dislike grocery shopping, a fact attributed to time and family constraints.6 Even those consumers who did not necessarily hate grocery shopping, reported that their supermarket shopping experiences were time consuming and inconvenient.7 In fact, forty-two percent of consumers were looking for ways to reduce the amount o