MyWebGrocer, A Survivor of the Online Grocery World, Plots Growth Strategy with iPhone Apps

8/20/09

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enable shoppers to use mobile phones to navigate grocery retailers’ online weekly circulars and make shopping lists. The second iPhone app, which he expects the firm will launch in mid-October, will let shoppers look at grocery store inventories and potentially submit an order to purchase those items. Just like the grocery store websites that use MyWebGrocer’s software and other Web tools, the mobile apps will bear the brands of the retailers, Tarrant says.

MyWebGrocer appears to have learned from the sins of previous firms in the online grocery business. Perhaps the most famous flop in the business is former California-based online grocer Webvan, which, according to CNET, went bust in 2001 after burning through $1 billion in investors’ money to build an infrastructure for delivering groceries to consumers in several markets around the U.S. Tarrant says that he launched MyWebGrocer back in those same heady days, in 1999. But MyWebGrocer never bet big on bricks and mortar. It chose instead to better enable existing grocery stores—which already had the bricks-and-mortar infrastructure for selling goods—to gain more online shoppers.

“Our view was that there are already 36,000 conveniently located warehouses across the U.S.—they’re called grocery stores—and they already have a supply chain, labor, brand recognition, and a customer base,” Tarrant says. “So our view was to bring the technology and expertise to them.”

MyWebGrocer is headquartered in Tarrant’s native Vermont, where he runs the company with his two brothers Brian and Jerry. (Tarrant previously founded Amicus Healthcare Living Centers, a Connecticut-based operator of assisted living facilities for people with Alzheimer’s disease, which he sold a few years back.) The software firm does most of its new product development in Vermont and operates sales offices in Atlanta, Minneapolis, New York, and San Francisco. The firm also uses outsourced technical staff in India and Romania.

On the advertising front, MyWebGrocer’s ad network competes for dollars with Internet giants like Yahoo and Google and other major online destinations. Google’s YouTube was the No. 1 site in terms of the number of ads for consumer packaged goods in the first quarter, according to Nielsen. Also, Quincy, MA-based startup Modiv Media operates a grocery ad network that distributes ads via its in-store handheld shopping scanners and self-service kiosks at grocery store delicatessens, commonly found at Stop & Shop. In an even more direct sense, MyWebGrocer competes with Minneapolis-based Grocery Shopping Network on both the online advertising and the grocery e-commerce software businesses.

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