Loblaw launches gift site on-line

Loblaw Cos. Ltd., the country's largest grocery chain, has quietly rolled out a President's Choice Web site selling gift baskets on-line — with an eye to expanding it into a major cyber gift shop. As well, Loblaw has launched two Web sites under two of its banners, Zehrs and Fortinos, allowing shoppers to order prescription drugs, photo-processing items and flowers on-line.

The Globe and Mail
December 12, 2001

Loblaw launches gift site on-line
Marina Strauss

TORONTO — Loblaw Cos. Ltd., the country's largest grocery chain, has quietly rolled out a President's Choice Web site selling gift baskets on-line — with an eye to expanding it into a major cyber gift shop.

As well, Loblaw has launched two Web sites under two of its banners, Zehrs and Fortinos, allowing shoppers to order prescription drugs, photo-processing items and flowers on-line.

By next month, the Toronto-based company will start a site for its Loblaws chain and, later in the year, for its other banners across Canada selling similar items, said Calvin McDonald, director of e-commerce at Loblaw.

"We're setting the benchmark," Mr. McDonald said in an interview. "We're putting our brand on-line."

Industry watchers have been closely watching Loblaw's on-line activities, expecting it to lead the way in a sector that major supermarkets have generally shied away from.

Almost two years ago, Loblaw began testing an e-grocer operation in Mississauga, although the company has not signalled that it will move beyond the pilot project in the near future.

"It's a real tough nut to crack," said David West, a consultant at J.C. Williams Group Ltd. in Toronto.

But he said Loblaw's latest move into the cyberworld establishes it as being "first and foremost in consumers' minds when they're thinking of buying those products on-line… . It shows them to be a more progressive retailer."

He said Loblaw's on-line business will give shoppers exposure to its products, prompting them to head for the stores.

Local on-line players, such as Grocery Gateway Inc. of Mississauga, have so far dominated the virtual universe in the industry, while major U.S. grocer e-tailers have faltered.

Mr. McDonald said Loblaw is still ironing out the wrinkles of cyberselling. For example, at a symposium yesterday on on-line holiday shopping, organized by Canada Post, Loblaw's http://www.sendpc.ca gift site couldn't confirm immediately an order that was placed during a demonstration.

"We entered this game knowing there would be a steep learning curve," Mr. McDonald said.

He said Loblaw is testing some "on-line solutions" with AOL Canada Services Inc. and Sympatico-Lycos Inc. Still, he said the site has already "met and exceeded" the company's targets, although he wouldn't provide details.

About 20 per cent of the orders are from U.S. customers, while the rest are Canadian, he said.

The President's Choice site allows shoppers to assemble a gift basket or gift box with PC products ranging from $1.99 chocolate chip cookies to a $99.99 train set, with 75 items to choose from.

At the Canada Post symposium, participating retailers said they were seeing gains in on-line shopping this holiday season, although e-tailers have cut back dramatically on free shipping and gift-wrapping services.

Graham Duffy, president of the interactive division of sporting goods chain Forzani Group Ltd., said repeat customers have appeared even though its site has only been running for six months.

But Canadians are not familiar with this type of shopping, which is more like buying from a catalogue, he said.


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