The impact of Priceline.com on the grocery industry Available to Purchase

Between November 1999 and September 2000, Priceline.com offered a new service in grocery stores in certain US cities, which allowed customers to shop for low prices online. The service required consumers to make bids on various items and then Priceline would tell them whether their bids were accepted. Consumers would then go to the grocery store to collect the actual items and use their Priceline.com card to pay at the register. The purpose of this paper is to discuss how this service affected members of the grocery marketing channel including: retail stores, manufacturers of packaged goods and consumers. The analysis suggests that the Priceline system could have altered the power structure of the grocery industry, had they been able to keep the cash draining service alive and had they cultivated the appropriate partnerships.