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Amazon to Launch Online Grocery Store
Aryabhata writes "It might sound like a bad flashback to the dot-com days, but news is that Amazon is planning to test the waters with an old idea; the online grocery store!. To its defense Amazon is only attempting this with nonperishables like peanut butter, potato chips, and canned soup implying that there's no refrigeration required--ordinary warehouse shelves will do fine."
To its defense Amazon is only attempting this with nonperishables like peanut butter, potato chips, and canned soup implying that there's no refrigeration required--ordinary warehouse shelves will do fine."
Well, in that case, it isn't different from what Amazon was doing before hand, now is it? Amazon to Sell Stuff Online, Film at 11.
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I've never heard of this WebVan company, but the online grocery store that I do know - Peapod - is still around and, going by how often I've seen their vans parked in some residential neighbourhoods around Chicago, quite successful. And they do deliver perishables.
If online grocery shopping gives you flashbacks to failed experiments like Webvan, you are not alone.
In fact, here they come now...
barack to the future?
It's called Fresh Direct.
Ways to dispose of hundreds of thousands of dollars of junk food left over from the cafeteria....
They could make money selling hard to find items, but not stuff that you can buy anywhere. There are a few things I can not buy locally that I would order if they had it, but I won't buy potato chips from them...
Of course, if this works then I should invest in UPS & FedEx...
I already routinely order groceries from Fresh Direct http://www.freshdirect.com/ . Its huge in the NYC area, the selection is broad (far broader than what Amazon is offering), the service is excellent, and the overall experience is excellent.
FYI, if you browse through the store, you'll notice that almost all the items they sell are economy sized or are packaged in multi-packs. If you just want one bottle of detergent, you're out of luck. If you want to save on 6 bottles at a time, this is the place for you.
Jonathan
I've been buying my groceries online for years, and I intend to continue doing so. The food is better quality, there's more choice than my local supermarket and it's way more convenient. In my area right now there are 2 competing online services (that I'm aware of, might be more) so there's even a choice. I'd assumed this kind of service was available everywhere - I guess not.
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Amazon already has a gourmet food store. This seems like a logical extension to me.
I mean, ok. When I order a book and find out there's a movie about this book, maybe I order it as well (or the other way 'round). When I order a computer game based on a movie, it makes sense to try to bundle it with the movie (or a "collector's edition" of the DVDs).
Now where does peanut butter come into play? I mean, I somehow CAN see certain porn movies and peanut butter, but it's not really the thing that comes to my mind when I start browsing Amazon. Where's the synergies? When did it happen to you the last time that you wanted to buy a book and realized "Hey, I also need noodles!"?
Books, movies, games, makes sense. Groceries just don't fit into the fold.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Now, if only they could find a way to get the food through the computer, and stuff it right into my face, I wouldn't have to do all that damn walking...
it might work out ok. But unless they can cut some serious deals with FedEx/UPS/USPS, shipping and handling for bulk detergent is going to be expensive. Still, its better than having to deal with the smelly and crowded walmarts around here.
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In the UK tesco (www.tesco.com) have been doing online groceries for years - as have Ocado.
Amazon already also has partnerships where they set up transactions with other businesses (e.g., their whole used-book system). In some places (e.g., Boston) grocery chains are still doing online orders and deliveries. (It has a reasonable ROI if you already have the food storage; delivery people and a web site to get the segment of the market that just wants food to show up.) So the next step is for Amazon, after you've specified your location, to offer fresh food if they've got a partner in the area. I don't see it leading to a loss for either business, relative to the status quo, so it's a perfectly plausible move.
Hmm.. I wonder what they will deduce from correlating my reading habits with my eating habits.
I really don't think this makes sense.
If there's one type of goods which I would like to order online and have delivered to my door, it is bulk goods. A box of 12 1L cartons of orange juice; a dozen 2L bottles of diet coke; a 4 kg box of laundry detergent. These can sit on my shelves for months, but they're bulky, heavy, and generally annoying to handle. I'm doubt I'll ever buy tonight's dinner from an online grocery store, but I would be very happy to buy next month's laundry detergent.
Unfortunately, the very nature of these goods which makes me want to order them online and have them delivered makes them impractical for a company like Amazon to handle. Products like this tend to be are at the very low end of the $/kg scale; they are exactly the sort of products which need to be shipped in large quantities to local warehouses and then delivered locally -- not packaged into individual deliveries at a central warehouse and then shipped separately halfway across the country.
The reason an online bookstore works so well is that the book market is characterized by low turnover, high profit margins, and high $/kg ratios. Grocery stores have high turnover, low profit margins, and low $/kg ratios. Trying to apply a solution designed for bookstores to the grocery store area simply won't work.
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...every major super market offers an online grocery service. I have five available in my area. They're fast (next day, some same day), accurate and cheap; £5 for delivery last time I checked. Some even bringin the shopping and put it away for you.
Also, who really wants used peanut butter? I don't want my food in the condition of "Used - Good."
Harry Potter reference link (Sorry, it was the first thing that popped into my head for which to search)
Fresh Direct is popular, and apparently successful, in densely populated neighborhoods like mine in NYC. Even though there are grocery stores sync'ed to the local neighborhood within a few walking blocks, all over the city.
Some competition from Amazon might force down the prices, and produce some new innovations for better service. And it will double the number of doubleparked giant delivery trucks clogging previously residential-only streets that rarely took deliveries.
These delivery services should deliver only after 8PM, when people are at home, and traffic congestion is lighter, and the double/parking has settled down. Getting that setup for residential zones would help make it more obviously better in commercial and mixed zones. Eventually we can have deliveries only between 8PM-6AM, and use the full capacity of our roads, even increasing it by lowering wasteful congestion.
A great combination of efficiency and convenience, at every level.
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We should all boycott this new venture. They do not sell Mountain Dew!
-David
The main difference being, of course, that they're already in the grocery business, and so have no problems with perishables. In fact, I ordered my groceries online from Tesco earlier; it's so much quicker and more convenient than actually going there. Of course, you have no control over the quality of the fresh items that are picked (although I generally have no complaints). Also, if they don't have something you ordered they'll substitute something similar, which isn't necessarily to your taste. You're entitled (expected, really) to refuse anything you don't want though if that does happen.
There's a charge for the service, of course (about 5 pounds), but it saves so much time and hassle it's generally worth it (not to mention that it massively cuts down on the temptation to impulse buy).
It's official. Most of you are morons.
I can't help think that they've been pretty much forced to expand their services while they can.
Even now, if I were to buy a book, I'll just google it and find the amazon link from there. Thats advertisement expense that Amazon is losing right there - more importantly Amazon has stopped being my first resort for book searches though majority of my purchases might be still from there. Amazon would probably want to gain that "first site you go to" share. And if they stick arnd with just books, whereas google offers everything (including Amazon links - which obviously they cant afford to take out), they might start to lose a bit of relevence. And obviously google's plan to scan the worlds books is a very visible threat.
All the stuff that Amazon and (to the best of my knowledge) target sell is prepackaged, isn't it? So even if there are germs all over the boxes, it doesn't do anything to the actual food, does it?
Even if cashiers at grocery stores use disinfectant regularly, there still isn't any guarantee a customer didn't take that food item and get flu germs or worse all over it. I'd be a lot more concerned with what other customers might have done to food than the people working there.
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I wonder if this isn't common across most of Europe. It is at least in Spain.
In addition to internet ordering the major grocery chains in Spain (two of the largest are actually French and German owned) offer other creative options. I for example found I didn't particularly like shopping for groceries online. There were too many things I wanted to see and select in person: fresh fruit and vegetables, meats, cheeses, etc. But I also found I didn't like lugging my groceries home on public transit so I would shop in the store and then have my groceries wheeled back into large coolers to be delivered either same or next day.
Why does this work so well in Europe but seem so rare in the States? It could be because of a significant difference in population density. These sorts of services seem to work well in densely populated areas where cars are less available (or desirable) than in more rural settings. The US has historically had a very disparate population living in primarily rural settings. This seems to be changing as small towns are shrinking as cities grow.
Not to mention tesco.com and ocado.com in the UK (Very successful national online grocery stores run by ... two of the UK's biggest grocery store chains), and the many online organic food delivery box companies running in the UK. Honestly, guys, if "online groceries" gives you flashbacks to 2000 then you are about six years behind the times...
These types of goods are commoditized to the point that no one -- not even Amazon -- will be able to gain significantly better economies of scale than are already present. The margins are just too thin. As others have mentioned, Amazon is already at a disadvantage because of the shipping.
Most of the traditional grocers gave up on trying to compete with Wal-Mart on price long ago and are looking for new ways to differentiate the customer's shopping experience instead. Been in a Wegmans, Whole Foods, or one of the new A & P "Fresh" format stores (A & P Fresh, Waldbaums Fresh etc.)? It's all about ultra-impressive super-clean 100K+ sq. ft. stores, organic foods, in-store cafes, etc. coupled with a progressive (for retailers anyway) use of technology. With many traditional low-end grocers going under, selling off large numbers of stores or re-orging (Winn-Dixie, Food Lion, etc.), the rest are content to let Wal-Mart have the low-income demographic and aim squarely at capturing upper-middle class and above shoppers' dollars. These shoppers have proven that they're willing to pay a bit more for a high-quality shopping experience. Amazon's approach will add some more content to their own store (the ultra-important "long tail") but will have little effect on the grocery biz.
Disclaimer: I work for a retail software vendor.
you could post reviews for your groceries? Because if yes, we can and will annihilate the TV dinner business.
I'm okay with this idea so long as there isn't a Used & New grocery section, like for the other items they sell.
Dude, if they're touching my peanut butter there is a bigger problem than their failure to wash their hands first.
Nevermind that the behavior of the cashier is essentially for show. If you want to know how "sanitary" your food from Safeway is go at 3 in the morning and watch the shelf stockers.
And of course other customers never touch your food before you buy it, no siree Bob! You might want to start considering your sanitation concerns being, by their very nature, your problem to look after. If you're afraid of catching something from your peanut butter jar wear gloves when you shop and wipe everything down with Vodka before you take them off.
KFG
That is a nice gimmick.
Have you ever spent any time in the backroom of a supermarket, or a warehouse, or a food manufacturing plant? Obviously not, if you think that it makes any difference whether the cashiers use those wipes.
There is no advantage whatsoever to Safeway over Amazon in this regard.
And please remember to wash off any food container before you open it, wherever you bought it.
great, so that's another source of super-bacteria.
seriously, that type of attitude is a contributor to the problem.
When someone who is NOT sick sneezes, etc the risk of any type of infection spreading is nil. Now there is always the chance someone has something but doesn't know it, and hence it is prudent to take others into consideration. But this attitude of using disinfectants and antibiotic soaps, etc make things worse, not better when they are misapplied.
Me I think companies should do a better job of convincing people who are sick to STAY HOME. I don't care what environment they are in, even if they suppress most of the symptoms they are the ones spreading it to others.
Someone who is sick should NOT be serving the public.
But, if you're overly sensitive, trust me, you don't want to actually know what's in your food.
really.
Why does branching them out to other markets cause them to lose your business? They still provide the same items at their same great prices. I think you're just bitching about a non-issue, honestly.
When someone who is NOT sick sneezes, etc the risk of any type of infection spreading is nil. Now there is always the chance someone has something but doesn't know it, and hence it is prudent to take others into consideration. But this attitude of using disinfectants and antibiotic soaps, etc make things worse, not better when they are misapplied.
If you're that concerned about antibacterials, perhaps you should stop brushing your teeth? (Many toothpastes contain triclosan, the same antibacterial agent found in most antibacterial hand soaps).
Antibacterial != Antibiotic, even though they perform much the same function. Most antibacterial soaps and lotions are made with either triclosan or ethanol; neither has any link to increased bacterial resistance. In fact, there are no fewer than seven peer-reviewed studies indicating that triclosan is not significantly associated with bacterial resistance (cf. Wikipedia).
wear gloves when you shop and wipe everything down with Vodka before you take them off.
Funny, my last girlfriend said the same thing to me...
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Every top ten item is a diaper, #11 is Bounty towels which I suppose could be used as diapers, then it is back to diapers again until the fertility test #14 and razors at #15, then it's all diapers and babywipes again to round out the top 20.
t op-sellers/-/grocery/16310211/102-8388649-7401761
http://www.amazon.com/exec/obidos/tg/new-for-you/
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My parents live about 9 miles from the nearest supermarket, in a relatively rural area. They have, I believe, three supermarkets that will deliver.
I live in an suburban area of Colorado, and only 5 miles from the nearest supermarkets and yet I can't get a single supermarket to deliver. Apparently i'm too far out!?
I think it has a lot more to do with the US tendency to drive. Many people in the UK find 18 miles r/t too far to drive to pick up a few items - yet in the US that's nothing.
"Urbanized areas" is a pretty loose term. Do they mean urbanized like NYC? Or urbanized like Dallas, TX?
I used to live near Dallas/Fort Worth. You can drive 200 miles there and never leave an "urban" area, if you drive it East/West. Even North/South it's about 80 miles.
NYC's density is 26720 people per square mile.
Chicago's is 12604/sq mi
London's is ~12071/sq mi.
On the other hand...
Dallas' is 3534/sq mi.
Memphis' is 346.9/sq mi.
So you see, there's a bit of a difference there. Driving distance is indeed a factor for a large portion of the population. You really need a certain density to support this kind of thing on a local level.
Several stores have tried it in the past and failed. Kroger tried it in a few test markets. I was in Huntsville at the time they tried it there, but it only lasted about 6 months. They couldn't get enough people to use it to make it worth hiring more drivers, and they couldn't get the groceries to all the people in enough time to make more people want to use it.
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