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Monday - May 22, 2000

Online Grocers Will Succeed Eventually

US Internet users will spend $8.8 billion at online grocery stores in 2004, in comparison with $200 million in 1999, according to IDC's new report, "Online Grocery Market Forecast and Analysis, 1999-2004".

Despite this optimistic prediction, online grocers can expect difficult times ahead. They will have to spend at least $25 million to become established players and this figure does not include customer acquisition costs, which are high in this market.

They will also have to suffer low product margins, heavy competition and other problems that are faced by grocers in general, such as achieving capital efficiency and overcoming obstacles to market penetration.

IDC says that profitability is possible for online grocers, particularly if they aim at older suburban markets. and expand their product ranges to include higher margin goods and services.

These would include health and beauty products, pet supplies, household cleaners, dry cleaning, video rental and prepared foods.

Internet Users Like Choosing News
Reading online news is Internet users' second favourite online activity after email, according to a new survey from the Zatso, Inc and the Radio and Television News Directors Foundation (RTNDF).

One in 3 respondents said they read online news and information every day. Local or community news, statewide news and US news and weather were of most interest to those polled. Only 1 in 10 respondents did not think it was important to keep up with the news.

Almost 3 in 4 Internet users would be interested in "news on demand" services and 2 in 3 would like personalised news.

The survey report noted that respondents liked the idea of controlling the news they see instead of watching or reading news items selected by others. Over two thirds of Internet users believe they would be better at selecting news of interest to them than a professional news editor would be.

The survey, "A View of the 21st Century News Consumer," was designed and conducted by Frank N. Magid Associates.


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