I agree that the customer base is critical. While Webvan is starting from scratch, PPOD's customer base has actually declined by 14% over the past year, from 104,000 to 89,000. From the second quarter Form 10-Q:
sec.gov
Revenues from the sale of groceries and related products increased from $29,933,000 for the six month period ended June 30, 1998 to $30,529,000 for the six month period ended June 30, 1999. Orders increased from 260,400 for the six month period ended June 30, 1998 to 263,400 for the six month period ended June 30, 1999 and average order size increased 1%. Fees paid by customers and retail partners decreased from $5,398,000 for the six month period ended June 30, 1998 to $3,981,000 for the six month period ended June 30, 1999. This decrease is attributable to (i) reduced shopping and delivery fees, (ii) lower contractual fees due to less reliance on retailers in centralized markets, and (iii) lower subscription fees resulting from reduced customer pricing in centralized markets. Customers, measured as customers transacting within the last 12 months, decreased 14% from 104,000 at June 30, 1998 to 89,900 at June 30, 1999. Reductions in the Company's customer base resulted largely from a mid-1998 decision to scale back marketing programs in order to focus resources on the new service model and on initiatives to centralize fulfillment operations in a number of markets. |
