Considers reasons for failure among pure play Internet grocery retailers. Notes that two factors seem to be significant. First, they did not achieve anything like a competitive advantage over the traditional``bricks and mortar'' food retailers on those dimensions that drive the consumer store/channel choice process. Second, they did not develop a business model that reaches profitability, perhaps ever. They apparently did not foresee that total operating costs per customer were substantially higher for Internet grocery retailing than for``bricks and mortar'' grocery stores, and that this new channel would have to charge consumers substantially more to reach breakeven operating levels. In fact, many pure play Internet grocers tried to price competitively against traditional food retailers and as a result, did not even cover variable costs. Hence, the more they sold, the more they lost. Eventually, they ran out of cash and were unable to raise additional monies in the market. Finally, there is some evidence that Internet grocers dramatically overestimated the size of the market for grocery shopping from the home. In the final analysis, pure play Internet grocer retailers appeared sexy and were hot for a short period of time because of the romance of the Internet. In fact, they were nothing more than fancy grocery delivery companies ± which have never made money in the mass market and probably never will.

Revisits the strategic resource management (SRM) model, a framework that was developed 20 years ago as a managerial tool for performance measurement and integrated decision making in retailing. Shows certain modifications to the SRM model, focusing on the gross and net margin return on retail space (i.e. GMROF and NMROF) as the key metrics. Authors contend the new focus gives the SRM framework a firmer grounding conceptually, and makes the SRM model more directional in practice. The paper also extends the SRM framework from its traditional gross margin metrics to net margin. Authors believe the greatest benefits of the SRM framework continue to be in benchmarking, planning, and executing alternative inventory, space, and people strategies in an integrative fashion.

The purpose of this paper was to better understand the impact that wordof-mouth recommendations (WOM) source (i.e., personal vs. impersonal sources) and WOM valence (average vs. excellent) have on satisfaction and trust following a failure and recovery event. Our results showed that customers who received WOM recommendations from personal rather than impersonal sources (WOM source) were less dissatisfied with the organization when severe versus mild failures occurred. Likewise, failure severity had less negative impact on customer satisfaction evaluations when the valence of WOM information was excellent versus average. These results were more pronounced for severe failures. In addition, WOM source and WOM valence both moderated the relationship between recovery quality and trust with the organization. Specifically, excellent recovery quality had a much greater influence on trust when WOM information was obtained from personal versus impersonal sources (WOM source). Finally, when customers received WOM information that rated the service organization as excellent (WOM valence), customers also considered recovery quality to have a greater impact on their perceptions of trustworthiness than if these recommendations were average.

No abstract