Forum Moderators: buckworks
I seen to remember that Webvan made -- or started to make -- very big investments in new hi-tech warehouses and a delivery fleet that ate up a lot of cash.
And, while most users were happy with the service, well, there just weren't enough users to sustain it or justify what was being spent.
I think it's an idea that was ahead of its' time. They tried to build too much too fast. 13 huge automated distribution centers across the us and the one in san fran was just starting to work.
I think the industry was so small margin and price sensitive that it was hard to break in. It is not that inconvenient for people to go to a grocery store since they're all over the place. They didn't offer the average person a real good reason to switch, and with such small margin products they needed new customers to jump in with both feet.
who knows...maybe amazon or walmart will do this the right way. peapod is still around here in chicago. I expect to see the business model come up again when tech gets a second wind.
another thing to look at...their ceo, Shaheen - former anderson consulting - made out like a bandit and seemed a tad shady.
They expanded rapidly despite never proving viability in a single market. They also didn't appear to make adjustments that may have facilitated viability (e.g., wider delivery windows, high margin items, etc.).
