People Watching: Groceries with a Click
By Jonah Freedman

(MONEY Magazine) – They're back: A new breed of online grocers, having learned from dotcom failures like Webvan and Kozmo, are tailoring their services to fit customers' lifestyles. They're delivering the goods in 14 of the 20 biggest U.S. markets and, according to JupiterResearch, will do $2.4 billion in business this year, doubling 2003 sales. Here's a look at the new age of the online grocer.

THE ORDER Many of the 160 residents at Le Mirador Senior Apartments in SAN JOSE no longer drive. So they've traded their car keys for a mouse, ordering groceries from on the complex's computers. Here resident and retired truck driver Paul Knott places an order for one of two weekly deliveries.

THE DELIVERY SimonDelivers' Doug Larsen may not be a milkman, but customers in the TWIN CITIES say having a familiar face dropping off groceries each week reminds them of a bygone era. "Not only do I know customers by name," says Larsen, "I know their kids had a big football game or were in the school play."

THE SELECTION FreshDirect is a big hit in the Big Apple: 11% of households on its MANHATTAN routes are regular customers. Finicky New Yorkers like the range of choices, from Spanish cheeses to live lobsters to curry samosas. John Melendez sorts spareribs at the online outfit's 300,000-square-foot Queens food factory.

THE PUTAWAY It's become a ritual for David Brauer and his kids, Abigail and Ian, of MINNEAPOLIS. He picks them up from day care, they find the bright green SimonDelivers boxes waiting on the porch, and they all unpack together. "When you have two kids," Brauer says, "you grab on to anything that offers convenience."