MyWebGrocer, A Survivor of the Online Grocery World, Plots Growth Strategy with iPhone Apps

The online grocery business famously flamed out earlier this decade, after hundreds of millions of dollars were pumped into companies like and Webvan. But online grocery sales and advertising have been making a comeback in recent years, and one of the industry survivors, MyWebGrocer, based in Colchester, VT, has raised a healthy $13 million this month to fuel its growth in this promising Internet market.

MyWebGrocer—which provides online commerce software and digital media services to more than 90 grocery store companies including A&P, Food Lion, and other regional and national outfits—has seen its own fortunes grow this year. New York-based Stripes Group provided the financing on August 5, according to a company statement. MyWebGrocer now plans to use the money to roll out some new iPhone apps for consumers to do their grocery shopping, and to boost its staff from about 70 today to 110 over the next year, the company’s founder and CEO Rich Tarrant tells Xconomy.

MyWebGrocer appears to be well positioned to capitalize on the growing desire among grocery retailers and consumer goods providers to attract customers on the Web. For one, the firm’s e-commerce software and other Web products are designed to enable regional and national grocery stores to gain more online customers and revenue. Secondly, its growing advertising network caters to consumer goods companies that want to put their wares in front of online shoppers. Yet the firm faces significant competition, especially in attracting ad revenue from consumer goods providers, which have a wide variety of online advertising venues to choose from.

The good news is that more online ad dollars from consumer packaged goods companies are going to firms like MyWebGrocer. Packaged goods companies spent $156.2 million on online advertising in the first quarter—up more than 50 percent over the same period two years ago, according to Nielsen NetRatings. Also, frugal shoppers are going to the Web to find online-only coupons on grocery items to save money.

For its part, MyWebGrocer wants to expand the reach of online grocery shopping to the mobile world, Tarrant says. The firm’s first iPhone app—scheduled for release next month— is designed to … Next Page »

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