Case | HBS Case Collection | November 1999 (Revised March 2003)

Webvan: Groceries on the Internet

by John A. Deighton and Kayla Bakshi

Abstract

What are the prospects for grocery shopping on the Web? This case invites a comparison of seven business models, with particular emphasis on Webvan. Why does the investment community value Webvan at $7.8 billion after less than six months of operating experience, and Peapod, which has had seven years to learn the ropes, at $200 million? Explores online consumer-shopping behavior, the economics of online and offline grocery distribution, and the challenges of uniting a pure information business with a mundane package delivery service.

Keywords: Business Model; Experience and Expertise; Investment; Information; Marketing; Distribution Channels; Service Delivery; Cognition and Thinking; Internet; Online Technology; Retail Industry; Service Industry;

Citation:

Deighton, John A., and Kayla Bakshi. "Webvan: Groceries on the Internet." Harvard Business School Case 500-052, November 1999. (Revised March 2003.)