Online shopping platforms act as both “pain killers” and “gain creators” in its value propositions. Through online grocers, the shopping cart rides and cashier check-out line ups are replaced with a few clicks in the comfort of your own home. Customers seek the most convenient method of shopping while businesses are shortening the supply chain.
Instead of building physical locations and hiring grocery store workers with wages and salaries, online grocers deliver straight to their customers; decreasing operational costs such as the shipments to grocery stores. As Mr. Gardner says in the article “For Shoppers, Next Level of Instant Gratification”, “efficient markets don’t like middlemen.” The question is, what about the middlemen that has been disintermediated? If the middlemen in the supply chain are all replaced by direct selling, how many companies would go bankrupt and how many employees will be laid off? While producers are increasing their revenues by shortening the supply chain, they are also increasing their market power; which in economic terms, it leads to market failure. In other words, a long supply chain with numerous middlemen results in an inefficient market, but so does a direct selling producer that gains market power and controls the entire market.
Regardless the dismissal of middlemen, online grocers do offer a new value proposition to grocery shoppers; and like the article title itself, online grocers offer the “next level of instant gratification”.
“For Shoppers, Next Level of Instant Gratification”