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Foodservice marketing and distribution giant SYSCO Systems is poised to enter the fray of Web-based grocery retailing in a partnership to create an e-commerce system that includes free delivery to residential households.
SYSCO said it has formed a joint venture with Dezina Marketing, Inc. to create an online-only retail store that leverages SYSCO's buying power and Dezina's personalized product delivery system to provide low-cost grocery items to consumers.
"In direct contrast to the rising grocery bills most Americans are facing, SYSCO expects to offer the online customers significant cost reductions on their grocery items," said Keith Shapiro, president and c.e.o. of SYSCO Food Services of Baltimore, LLC, which markets and distributes food and related products to foodservice operators throughout the Baltimore and Washington, D.C. metropolitan areas.
"Unlike a handful of other online grocery operations, our association with Dezina and its delivery system will effectively negate the overhead costs typically passed onto customers through product pricing," added Shapiro. "Groceries ordered come directly from SYSCO's warehouses and are delivered to the customer's location through Dezina's personalized delivery system."
Dezina is primarily markets food delivery services under the trade name, Deli Around The Corner (DATC). The initial target market for the new venture will be comprised of existing DATC business customers. Dezina will provide marketing and distribution channels for delivering SYSCO food products to customers. A second phase of the project will extend to residential households falling within a three-mile radius of DATC commissary locations. The consumer customers will receive free delivery, the partners said.
"Beyond tremendous cost savings for our customers, our distinct advantage is being able to offer customers a personal shopper experience, if you will," said Kristin Hill, director of operations for Dezina. "Our expertise is in turning up the expectations of what constitutes quality and friendly services. And in this particular case, bringing the hometown grocery shopping experience where you know the grocer and the grocer knows you, into the anonymous Web-based shopping experience."
The two companies are developing an interactive, virtual grocery shopping Web site that will simulate a grocery shopping experience. The site will be made available to target audiences and will have customer use incentives built into the system in various forms, the partners said.
SYSCO is entering an online-only grocery retailing scene that has seen its share of failures. Currently, independently-owned FreshDirect and Stop & Shop-affiliated Peapod are among the more prominent players in the space.