Kozmo.com was founded in 1997 by two young Wall Street professionals,
Joseph Park and Yong Kang. Park had been an analyst in the corporate
finance division of blue-chip investment bank Goldman Sachs & Co.,
while Kang was an assistant vice president at Societe Generale in the
media and communications group.
?Customers choose from 30,000 different products at the Kozmo.com
site, running from magazines to CDs to movies to food. ?
Kozmo.com?s catalogue featured five main product categories:
entertainment, meals, grocery, drugstore and gift shop. Some of the
most prominent products they offered while they were still in business
have been listed below:
1. Alcohol and Cigarettes: ?One move that has been controversial for
e-tailers is the decision by Kozmo and Webvan to offer cigarettes and
alcohol in some of their markets. Jackson said the move made sense,
because if Kozmo is billing themselves as an extension of the local
supermarket, they might lose some business if they did not offer those
2. Convenience goods such as laundry detergent and nonprescription drugs
3. Guides to 47 national and international metropolitans, through a
collaboration with CitySearch
4. ?Ready-to-eat gourmet meals and has partnered with a few
restaurants to deliver their food, much like existing
5. Video Games (later discontinued due to being a poor seller)
The Kozmo website also mentions that video game rentals have been
discontinued, but that sales of games are being hugely discounted "for
a limited time"
6. Drinks such as drinks such as juice, soda, beer, and food such as
milk, bagels, yogurt, and dry pasta are available, but the main focus
of the selection is snacks, drinks, and meals. The meals are upscale
and quite good?lasagna, salads, sandwiches, frozen pizza,
7. Newspapers such as USA Today
8) Ice Cream
The company even claims to be the single largest seller of Ben &
Jerry's ice cream in New York, delivering 40,000 pints a year
Which Items Were the Top Sellers:
Snack Foods were undoubtedly their top seller.
Later, when the company attempted to expand into sales of items such
as video games and higher end electronics, they met with failure.
Adams, one of the originals, has vivid memories of those glory days.
The idea for the company was hatched, he said, in founder Joseph
Park's small, "kind of gritty" apartment on 12th Street in the East
Village. "Joe and his roommate had a major case of the munchies one
night," Adams said, "and thought it would be cool if there was a
delivery service for snack food. The whole Kozmo concept came from one
really bad attack of the munchies."
Kozmo.com?s causes for failure with their customers:
1. Kosmo?s greatest error with their customers occurred when they
stopped catering to their main client base of middle class
college-students. This was done so that they could target more upscale
clients who would order expensive products. ?Indeed, Kozmo is
frantically trying to ditch its college-student customers, who last
year made up 76% of its business, in pursuit of those who will pay a
premium to have thousands of items, from DVD players to cotton swabs:?
2. Kozmo offered free delivery and charged competitive prices when
it launched in New York. Though customers loved the service, the costs
of delivery were high. After co-founder and former Chief Executive
Joseph Park stepped down, Burdo slashed Kozmo's overhead, instituted a
delivery fee and oversaw several rounds of layoffs. The company also
closed operations in San Diego and Houston.
3. ?Some analysts say Kozmo's business model only made sense in the
context of a densely packed city such as New York. Vern Keenan, a
financial analyst with Keenan Vision, said the service had a chance to
work in only a few other cities around the world, such as London,
Stockholm or Paris. ?This seemed like a dumb idea from the beginning,"
Keenan said. "This grew out of a New York City frame of mind and it
simply didn't translate.
Kozmo?s Financial decline:
?Kozmo said in December that investors promised a total of $30 million
in private funding. But last month the company learned that an
investor had backed out of a $6 million commitment. Kozmo executives
had been working on a merger deal with Los Angeles-based PDQuick,
another online grocer, sources said. The deal collapsed when funding
that was promised to PDQuick did not materialize?
Kozmo to shut down, lay off 1,100, News.com
?At the final meeting Thursday, Kozmo employees were told that they
would be paid through the end of the current week and get two weeks'
severance pay along with payments for any unused vacation time.
They were also informed that Kozmo's board had voted to shut down
operations to save enough cash to provide those severance packages to
employees, a statement that was greeted with mixed emotions.?
What People want in an hour:
Apart from snack foods, groceries are also something that people would
want delivered in an hour. Unfortunately, it doesn?t seem to have a
very wide client base.
?Online delivery companies have been among the most ravaged by the
Internet shakeout. Kozmo's rival in New York, Urbanfetch, shuttered
its consumer operations last fall. Online grocers such as Webvan and
Peapod have also struggled, and smaller operations such as
Streamline.com and ShopLink.com have closed down. ?
Kozmo.com also successful with snack foods, movie rentals and CD
sales, this seems to be an area that customers might seek one-hour
delivery in, however one issue to consider is the range of products a
delivery company would be able to provide.
?It stocks what people want most, because those are the items that are
profitable. In this case, Kozmo.com does have a much wider movie
selection than Blockbuster. On the other hand, people expecting to
find 1970s German alternative punk reggae and other such less-demanded
CDs will probably be out of luck. There is need for the Blockbusters
of the world to fear, however, because you can send requests to
Kozmo.com for that lesser-known movie or book, and Kozmo.com will
attempt to fill that consumer void.?
Books are very sucessful for delivery businesses and it would likely
be a very sucessful in a one hour delivery service. Many book delivery
services like Amazon.com are facing compeition from places like Barnes
and Noble (http://news.com.com/2100-1017-233742.html?legacy=cnet) .
However, these companies only provide delivery after a few days.
You may also find these links useful:
1) Problems in online ordering/delivery companies
2) View and Purchase Kozmo.com messenager bag?s
3) View a screenshot of Kozmo.com?s old website declaring that it has
shut down it?s operations
4) Kozmo.com sued with racial discrimiation law suit
Kozmo.com Slammed with Racial Bias Lawsuit
5) A review of Kozmo.com?s service by a customer
6) The story of one of Kozmo.com?s past employees
7) Spertus vs. Kozmo.com
Poor marketing-A customer sues the company over spam mail
advertisements from Kozmo.com
Please ask for a clarification on this answer if necessary,
I hope this helps!