E-Commerce Times Talkback
See Full StoryIn retrospect, all of the signs were there, pointing to the eventual demise of Internet
grocery delivery service Webvan. It didn't take a lot of map reading or compass checking
to see that Webvan was on the road to closure and bankruptcy, not new funding and
profitability.
In the dot-com world, a strong image is half the battle and a promising bottom line is
the other half. Webvan lost on both fronts.
As a regular Webvan user and having just received my last delivery on Saturday, I was very disappointed to hear of their closure. However, I couldn't help but wonder over the months of receiving service that so much money was spent on marketing efforts. I seemed to receive a gift of some sort or another with every delivery. I was also surprised last year when they re-launched with a new logo and re-designed trucks. Did they really need to do that -- and how much did they spend? I still believe that Webvan solves a basic need for consumers who either hate grocery shopping (as I do) or don't have the time to do it. But I think that they could have been a little more frugal in their approach -- solve the need first, then do the fancy marketing tactics. I hope some company tries the SF area again soon -- I'm running out of milk.
I have to say I'm sorry this happened to Webvan. Those vans, to me, were kind of a symbol of the melding of cyberspace and the real outside world. Also, in an increasingly overly-busy society, a service like Webvan should have been an easy sell to the public. Webvan needed some more time some extreme economizing internally. Also, I have to agree with the person who said one problem was Webvan was dealing with perishable items. Any business that sells perishables has this whole other challenge that other companies don't understand.
As a maintenance tech for the operation in So. Cal,. getting to know the drivers and all the people involved in the "show," shame on the brass (you know who you are) for not practicing what you preached to those people who would, as Warren Buffett said, jump off a roof for you, but why? That's not how you treat people. It is a shame to see such greed for one's self. My hats off to those men and women who believed in the dream you only preached. To you I say, float away in your little bubble again, next time I hope people remember your names and smile and wave on your way down.
I would be interested in an update from the author about whether WebVan's bankruptcy terminates its obligation to fund George Shaheen's retirement. Was this 375k pension fully funded by an annuity at the time he hired on? If not, I doubt the company is going to be putting funds into it now!
Although Webvan was an excellent service, the company tried to do too much, too fast, as described in this article. How Amazon could get away with a massive expansion program and years without a profit, while Webvan did not, probably has a lot to do with the fact that Amazon is storing books and shipping them through 3rd parties, and Webvan was dealing with perishables and driving them around itself.
Delivery of groceries isn't anything new, indeed such was the NORM prior to the advent of the supermarket.
In fact, nothing in the Webvan concept was new, from basic grocery retailing to order fulfillment to operation of a delivery service.
Even their arrogance was pretty old fashioned, as was their greed, ignorance and lack of common business sense.
Their demise was no mystery.
Want your groceries delivered to your home? If you live in a major metropolitan area,
that service is available -- and always has been.
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