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Goodnight, Sweet Pink Dot
The Internet-related death of a home delivery institution sends Hollywood alcoholics into spasms of grief.
For the rest of the July 2001 issue of CRM magazine please click here
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Overshadowed by the demise of Kozmo.com and the ongoing financial and logistical troubles at Webvan, the recent news that Los Angeles' favorite home delivery grocer, Pink Dot, would close its doors went mostly unnoticed by the national media. But among some of those in Hollywood with whom Pink Dot had ongoing and very personal business relationships--upscale boozers who depended on the company for late-night deliveries of liquor and cigarettes--the death of the Dot is a life-altering, front-page headline.

That the Internet killed this fountain of nocturnal nectar only adds insult to injury. For 13 years, Pink Dot had done just fine with a telephone order system: Its number was on speed dial on many a Hollywood phone. But last year, when the company altered its tried-and-true business model for an aggressive, Internet-centric strategy, things went south. It's one thing for a no-name upstart like Kozmo.com to learn the hard way that Internet-based delivery services don't work. Who used it anyway? It's quite another thing for the venerable Pink Dot to succumb to the Web's siren song.

A Friend in Need

Is there a lesson to be learned here? Yes, but first, a bit of background. To fully comprehend the impact that the Dot's death is having on some Los Angeles customers, one must first understand the beauty of the company's pre-Internet business model. Simply put, Pink Dot made money by daily lubricating the lives of Los Angeles' legions of last-chance desperados. With one warehouse and 16 stores, the company delivered groceries--plus smokes, liquor and magazines--to those in need.

To say that for Pink Dot there was gold in them there hills is an understatement. Consider the store on Sunset Boulevard and La Cienega. Adjacent to this location stand the Hollywood Hills, an area peopled by those laboring under the crippling fear of being one failed movie away from rejoining the peasantry in the city below. To the south of the Dot lies West Hollywood, a cauldron of free-form lifestyles, insatiable ambition and enough urban angst to make General Patton cry out for his mommy.

Each day, in cartoonish delivery cars festooned with tumor-like, pink plastic dots on the doors and giant propeller beanies on the roofs, Pink Dot tended lovingly to this deeply appreciative customer base, dispensing an elixir guaranteed to right all wrongs. In this case, the vendor was dependable, the customers loyal. It was a business model that could not fail.

Decline and Fall

Enter the Internet, with its promise of greater efficiencies and expanded reach. Management at Pink Dot, like so many others, took the bait, shifting the company's ordering system online and expanding operations into other areas of the country. It changed the company name from the whimsical, vaguely lewd Pink Dot, to the sterile PDQuick. And sadly, it traded the fleet of ridiculous propeller-beanie delivery cars for Volkswagen Beetles.

The rest is a sorry tale of spent funding, bad planning and the type of e-commerce operational overreach that is epidemic these days. Internet grocers and their first cousins, online delivery services, are the latest poster children for this epidemic. Perhaps the cure lies in a click-and-mortar model. Or perhaps the Web and home delivery simply don't mix.

All that the residents of Los Angeles know is the goose that laid the golden eggnog is closing its doors. That the Internet killed Pink Dot is a sobering thought--literally.

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