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Keywords
Internet Grocery, Customer satisfaction, Older consumers
Abstract
This paper argues that there are four different ways in which customer value can be created in electronic grocery shopping, but that the chosen business model will set limits to whether - and to what extent - the firm will be able to offer value-adding services for consumers. The relationship between business models and customer value in online grocery shopping is exemplified, and some practical problems and opportunities in e-grocering are highlighted by presenting the case of Nettimarket.com, a Finnish Internet grocery business that was founded by an entrepreneur with no previous experience of the industry. His company is a start-up virtual grocery shop with a business model unattainable by the big industry players. The paper reports on the experiences of the company and the outlook of the entrepreneur after two and three years in business, respectively.
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Introduction
With the Internet as a commercial medium, new ways of doing business have developed in almost every industry sector. In some sectors, new and efficient Internet business models have gained a strong foothold, whereas in others, business is done on the Web primarily in identical manners as on the physical markets. Shanklin and Griffith (1996), Vassos (1996), Klein (1998) and Phau and Poon (2000), just to mention a few, have stressed that product characteristics are important for the feasibility of Internet trading, highlighting the need for an examination of the nature of the offering when developing Internet strategies. As far as the suitability of groceries for e-commerce is concerned, differing opinions have been presented in the academic and the business press since the mid-1990s: some authors and industry representatives have conveyed a view that grocery e-tailing is about to become big business (Andersen Consulting, 1998), perhaps even the biggest online market (Killgren, 1999), while others (e.g. Corral, 1999) have been far less optimistic about the future of electronic grocery shopping (EGS). Although there may be a continuing uncertainty about the viability of EGS (Baker, 2000), the widespread demise of online grocers, including many big players and ambitious...