Smith's and Priceline.com take bids for groceries

Is $1.34 too much for that can of frozen orange juice? How about $1.06? Or even 67 cents?

Haggling over price at the grocery store sounds as unlikely now as did bidding for airline tickets until a few years ago.

Once again, the Internet is changing the way business does business. This time, Smith's Food & Drug Stores are putting their merchandise up for bid.

Make us an offer, says Smith's and parent The Kroger Co., and we just might take it.

A consumer can log onto the Internet, select at least two brand names for any desired product in 240 categories and make an offer. Within 60 seconds, the shopper finds out which offers have been accepted and locks in the prices by prepaying with a credit card while still online.

Carson City Web shoppers are reporting savings of nearly 50 percent off shelf prices, Smith's store manager Frank Zadori said.

"The customers seem pretty thrilled about that kind of savings," Zadori said.

The program is a partnership with Priceline.com, the Web marketer known for "name-your-own-price" airline tickets and hotel rooms as well as for bringing William Shattner's singing voice to the airwaves in Priceline commercials. Priceline calls the program WebHouse Club and has other affiliate grocers throughout the country.

The cost of the program is actually borne by grocery manufacturers, who repay Smith's for any difference between what the retailer would otherwise charge and the successful bids.

A participant needs access to the Internet, needs to pick up a Priceline WebHouse Club card at Smith's and must also have a credit card.

On the first visit to the www.webhouse.priceline.com Web site, a shopper is guided through a registration process to activate the WebHouse Club card and submit the credit card information.

The shopper then selects from more than 1,000 national brand items, views prices and submits bids, locks in the accepted bids by paying with the credit card, prints out the shopping list and goes to Smith's to pick up to items.

The items are run through the checkout like any other, then the transaction completed by swiping the WebHouse Club card like a debit card.

The actual list of product and typical prices listed in the Web site are maintained by Priceline, with discounts negotiated on a national basis. Smith's and WebHouse promise that, if a sale or promotion results in a lower price being available than a customer's successful bid, the customer will get the lowest price at the check stand. If a particular brand is not available, substitutions are permitted.

Bidding at the Web site is more involved than , say, clipping coupons from magazines and newspapers. The page for yogurt lists 8-ounce cups of Dannon, Breyers and Colombo brands and asks a shopper to pick two or more. A typical price would be 65-73 cents, the site says and offers four suggested bids along with estimated likelihoods of success:

-- $.58, great chance, 90 percent.

-- $.54, good chance, 75 percent.

-- $.51, fair chance, 66 percent.

-- $.47, low chance, 50 percent.

A space is provided for entering an different bid or a shopper could get a guaranteed 36-cent price by using one half-price token per three cups of yogurt.

For some items, the use of the half-price token is the only way to get a discount. A whole lobster, valued at $7.99-8.99, can be had for $4.75 and three tokens. A 1.5-pound package of New York steaks is $5.57 with four tokens, $9.99-11.14 without tokens. A 1.5 package of ground round, ground sirloin or ground chuck, up to 90-percent lean, costs $1.42 with one token or $2.49-2.84 without a token.

New WebHouse Club members get six of the virtual half-price tokens when they first register. More have to be earned by following links to other business sites and buying products or services.

Buying a $25 prepaid phone card from Net2Phone earns 10 half-price tokens. Joining the Audio Book Club qualifies for five. The Web links make accepting the offers uncomplicated, since the affiliated businesses get the customer's mailing address and credit card information from Priceline's records.

In fact, the local grocery stores have very little additional burden under the program, Zadori said. The corporate computer system handles all the details and training for the Smith's checkers consisted of brief one-on-one sessions to tell them about it, Zadori said.

"The Web site must explain it all pretty well, because our customers come in understanding how it all works and haven't had many questions. They know they have to separate their Priceline purchases from their regular shopping and they have their bid printouts and cards ready," he said.

"All the employees here got a card, of course, and a lot of them are using it. Everybody's pretty happy."

So far, only a small proportion of local customers have used the WebHouse Club since it was introduced here at the end of June. Whether a significant number feel the extra time and effort of "pre-shopping" on the Internet is worth the discounts remains unknown.

But the people paying for the discounts, the food manufacturers, know many shoppers will make an extra effort to save money - that's what's behind the popularity of coupons.

On the Net:

http://www.smithsfoodanddrug.com

http://www.priceline.com