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BUSINESSWEEK ONLINE: Business Week ebiz | |||||||||||||||||
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How Priceline's Grocery Service Delivers Headaches The name-your-own-price site known for travel bargains may save you a few bucks on food but doesn't get the packages to your door. In fact, it adds to your shopping hassles What a bargain! A huge 13 1/4-ounce bag of Lay's Potato Chips for only $1.74. That's at least one-third off the sticker price. After bidding -- and paying -- at priceline.com's new name-your-own-price grocery site, I go to a participating Manhattan store to pick up the goods. But there's one problem. The chips aren't there. In fact, the manager says, they will never be there. This store doesn't stock that brand in this size. But perhaps I can get it at another supermarket 10 blocks away. I cringe. Even die-hard shoppers find it tough to get excited about buying groceries, and that's why priceline.com is the latest online venture to bet it can grab a share of this $500 billion market. Americans spend an average of 47 minutes on each supermarket trip, devouring up to three precious hours of our week, according to J.C. Bradford & Co. The Tennessee brokerage firm says that more than 60% of consumers dislike grocery shopping.
Instead of delivering groceries, priceline's two-week-old grocery service delivers headaches. For now, it's just available in Manhattan, selling more than 500 brands of 140 grocery products. Here's how it works: Instead of clicking on a virtual shopping basket and paying the list price, users bid on items ranging from pet food to peanut butter. If the bid is accepted by one of two major brands chosen by the buyer -- such as Jif or Skippy for peanut butter -- the item is automatically charged to the buyer's credit card. WebHouse Club members then print out a bar-coded list of what they've bought. Then they take the list and their WebHouse Club card to a participating store to pick up the items. Sounds daunting? You better believe it. In fact, WebHouse Club is so time-consuming and unwieldy that only the most budget-obsessed shoppers will bother. Instead of using the Net to gain greater convenience and efficiency, WebHouse Club has managed to make grocery shopping an even longer and more painful experience. Even if the process becomes faster once you get used to it, the site fails to deliver on several levels. First, there's not enough variety. WebHouse Club simply offers too few brands, sizes, and items to finish your shopping online. You can't bid for basics like milk or eggs, for example. And you can, with apologies to Henry Ford, have any color bread you want, as long as you want it white. That means two checkouts at the real-world store: one for your WebHouse items and one for everything else. People behind you in line are going to think that's great. Really great. BRAND DOES MATTER. WebHouse also has only about three big names in each product category -- and not always the first three that come to mind. When I think of tortilla chips, I think Doritos or maybe Tostitos. Priceline sells Bravos, Santitas, and Snyder's. Sometimes brand really matters. WebHouse is a bet that it really doesn't. Another problem: Because WebHouse is heavy on brands like Cheerios that go on sale often at regular stores, there's a risk that priceline won't always deliver the best price. The whole process feels like a cyber version of The Price is Right, the game show where the object is to guess the price of the goodies in order to win them. But a game show is a gimmick, and so is WebHouse. How does one make an intelligent bid on the price of yogurt, anyway? WebHouse Club tries to help by listing the normal price range for each product and the odds that certain bids will be accepted. For example, 8 oz. cups of yogurt normally cost between 69 cents and 89 cents each, according to priceline. If I bid 61 cents, I have an 85% chance of getting accepted. A bid of 57 cents gives me 66% odds, while bidding 50 cents is only 33% likely to put that yogurt in my fridge. (Priceline doesn't explain how they know this.) Daring bargainers can also go off the list of "suggested" bids to truly name their own price for yogurt. Or so the story goes: WebHouse accepted all my bids, even the ones I deliberately set at levels priceline said were too low. So did I pay too much on the rest? Maybe, but my credit card had already been charged and I was too bothered to try again. Who has the time or energy to guess at grocery prices every week?
In all, it took at least two hours, I saved about $10, and you can do the math. For bigger families, true, the savings could add up -- but only at the price of more inconvenience. Big, budget-conscious families tend to have children. Children tend to drink milk. And big families often use coupons, buy house brands, or follow sales, which would cut into any savings priceline delivers. And so on. In New York, we have two words for this: Oy vey. I might try WebHouse Club again: I definitely saved money. But it took a lot of legwork to save a few dollars on brands I might not even want. Brady covers priceline.com from Business Week's Connecticut bureau. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ |
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 WEB POINTERS Read our review, then try the sites: WebHouse Club priceline.com Webvan Peapod | ||||||||||||
