Dear anonymous777,
The online delivery service Kozmo quit operating 11 April 2001, due to
a combination of false decisions and unlucky circumstances.
They started in 1998 as a small online basic items delivery service in
the urban New York area. Kozmo's main advantage, from the coustomers'
point of view, was speed: Their deliverymen used bicycles and thus
were much faster than they could have ever been by automobile. Taking
orders exclusively via the Internet was the quickest, most efficient
way and added its share to the speedy deliveries. Also, there was no
delivery fee and no minimum order - a major advantage for customers
who only wanted some candy bars or a single book.
Kozmo's success as a completely web-based company came to the right
time, during the late nineties' boom of dot-com business concepts.
They had no problem getting funding for expanding their services.
Among the investors, there were major companies like Amazon.com,
Starbucks and Columbia Home Video. Soon, they had 3000 employees and
served ten city areas in the United States. Kozmo planned going public
with their stocks in the late summer of 2000.
However, before they were able to do so, the stock market for online
companies started climbing down in summer 2000, slowly first, then
plummeted in September that year. The same time, analysts said that
online delivery services had no future. The tide started turning
against Kozmo.
Additional problems were immanent in Kozmo's business model:
"But aiming small proved to be a mistake when the company found it was
paying as much, sometimes more, to buy, store and deliver the goods as
it was charging for the orders. After the market began to nosedive a
year ago, the company began charging a $2 delivery fee for orders of
less than $30 and put in place a $5 minimum order. Kozmo also called
off its planned IPO, replaced CEO and co-founder Joseph Park and
canceled expansion plans."
Source:
The Industry Standard: Kozmo calls it quits, 11 April 2001
http://www.thestandard.com/article/0,1902,23656,00.html
While many of Kozmo's customers had to realize that one of the
service's main advantages - the free delivery even for small items -
vanished, analysts advised against investing in online delivery
services, since profit margins in that market segment would, according
to their opinions, never be interesting enough.
In early 2001, when it became clear that the "Dot-Com Crisis" might be
harmful to Kozmo's business reputation, they dropped the ".com" from
their name and tried to also win customers who would not order via
Internet by publishing a printed catalog. They shifted even further
away from their original concept by accepting phone orders; this
however proved to be a mistake:
"'It was a step back really,' said one operator still answering
Kozmo's customer service line, but knew she was going to be laid off
in a week. 'Phone orders are not as quick as the Internet. Our company
was made to operate by Internet, not by a [expletive deleted] phone
call.'"
Source:
dekadamag.com: kozmo.com enters the dot.com graveyard, 22 April 2001
http://www.dekadamag.com/business/kozmo.htm
These steps backwards did the company no good, and additionally the
market's disposition was against them. They started leaving employees
out of work, and the company as a whole was a losing deal. Reportedly,
they lost about a million dollars a day when the end came closer. In
Spring 2001, a number of investors backed out of a $30 million round
of funding. Kozmo was not able to survive any longer and had to
declare bankrupcy.
To my displeasure, there is currently no allround delivery service for
such a wide range of goods that will serve the Boston area. But you
might be interested in WhyRunOut, who deliver goods from local
businesses to the customers' doors within hours and who do cover the
Boston area:
http://www.whyrunout.com/index.asp
Sources:
The Industry Standard: Kozmo calls it quits, 11 April 2001
http://www.thestandard.com/article/0,1902,23656,00.html
dekadamag.com: kozmo.com enters the dot.com graveyard, 22 April 2001
http://www.dekadamag.com/business/kozmo.htm
RedHerring: Web quick-delivery companies hit bumps
http://www.redherring.com/industries/2000/0523/ind-pinkdot052300.html
USA Today: Net grocer Webvan shuts down
http://www.usatoday.com/tech/techinvestor/2001-07-09-webvan-closure.htm
Newsfactor.com: With Webvan Gone, Where Will Online Shoppers Turn? 10
July 2001
http://www.newsfactor.com/perl/story/11884.html
Newsfactor.com: Kozmo Calls It Quits, 12 April 2001
http://www.newsfactor.com/perl/story/8907.html
Though I can't provide you more pleasant information, I hope this is
what you wanted to know.
Best regards,
Scriptor |
Clarification of Answer by
scriptor-ga
on
01 Feb 2003 09:33 PST
Dear anonymous777,
As a result of my additional research, here are various online
delivery services throughout the United States, most of them limited
to a particular area of delivery. Unfortunately, none of them offers a
service like former Kozmo.
Albertson's
Product range: Food, groceries, drugs. Serves the Seattle area and
Western Washington.
http://www.albertsons.com/
HomeGrocer
In the process of restructuring, not yet operating again. Re-launch
scheduled for mid-2003. Will serve the Southern California area.
http://www.homegrocer.com/
EZ Shop
Product range: Groceries, beverages, fruits and produce, dairy
products, bakery, baby products, chicken , hot dogs, meats, vegetarian
& organic, specialties, pet supplies, health & beauty aides. Serves
the Manhattan, NY and Hudson County, NJ areas.
http://www.ezshop123.com/
NetGrocer
Product range: Wide assortment in the categories groceries, drugs,
general items, specialties, home goods and gifts. Delivers nationwide.
http://www.netgrocer.com/
Peapod
Product range: Groceries. Serves the areas of Chicago, Connecticut,
Massachusetts, New York, Rhode Island and Greater Washington D.C.
http://www.peapod.com/
Pink Dot
Product range: Groceries, beverages, prepared meals. Serves the Los
Angeles, CA area
http://www.pinkdot.com/
Safeway
Product range: Groceries, delicatessen, drugs. Serves the Northern
California, Oregon and Washington areas.
http://shop.safeway.com/
Shop-n-Stop
Product range: Groceries, general goods, shoe repair, wines, flowers,
postage stamps, imported candies, international beverages, VHS videos,
DVD videos, computer games. Serves the greater Cleveland area.
http://www.stop-n-shop.com/
Best regards,
Scriptor
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