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Amazon Tests a Home-Delivery Service For Groceries
destinyland writes "Amazon.com is quietly trying to resurrect the failed business models of WebVan and HomeGrocer — two dotcoms which had offered home delivery of fresh groceries — with a new service called Amazon Fresh. Last week at a shareholder's meeting, Amazon CEO Jeff Bezos fielded questions about the current tests being conducted in Seattle. Bezos admitted Amazon is 'tinkering' with the economics of it, adding that 'we continue to think about that...We like the idea of it, but we have a high bar of what we expect in terms of the business economics for something like Amazon Fresh in terms of profitability and return on invested capital.' No further details were forthcoming, but Bezos still acknowledged that 'we continue to think about that.'"
I've been a Fresh customer for nearly two years now...
Will they deliver Tuscan Whole Milk?
AmazonFresh has been around Seattle for several years. IIRC, Amazon bought out HomeGrocer and rebranded it.
And it failed !! Those that don't know history are doomed to repeat it !! Ben Franklin Jr.
Bit expensive, but already available country wide in the Netherlands, works fine really.
www.albert.nl/
can this idea fail?
This doesn't save you the time of shopping, as you still have to select what you want. It's not convenient, as you have to select a delivery time that you know you'll be home, or risk having your ice cream sit on the outside step melting. It can't be much cheaper, as most grocery stores already run incredibly thin margins. And with Whole Foods and Trader Joes every other block, it's not difficult to hunt down hard to find artisan/imported foods.
So explain to me why anyone would intentionally get into this business? Who is your target audience?
Some packaged grocery items can benefit from national distribution and shipping, but lots of stuff -- produce, meats, cheeses, prepared foods, etc. -- need to be staged (and in some cases, sourced and/or prepared) locally, in a refrigerated facility, then delivered in refrigerated trucks. That means this kind of service will only be available in places where Amazon invests in infrastructure to support it. And that probably means denser metropolitan regions, where there's enough of a customer base in a small area to make the investment cost-effective.
There's a grocery delivery company called FreshDirect that services the NYC area; I've had good experiences with them. But they've been refining and building their business for years. Originally they only served certain neighborhood in Manhattan (their main warehouse is in Queens, just over the 59th St. bridge from midtown Manhattan). Now, years later, they have expanded to serve all 5 boroughs, and some areas outside the city. But this expansion was very slow and deliberate, as they built up their capacity, trained their workforce, etc.
In the UK, ordering groceries on the internet for home delivery is part of every supermarket's business, and there's at least one company I can think of (Ocado) that has no physical stores at all. WebVan's failure says nothing about the business model, which is hardly a complicated one, just that at that time, that company could not make it work.
why? so we can subsidize the pension of some high school dropout box-monkey making 26$ an hour while I work my ass off?
fuck unions
"This doesn't save you the time of shopping, as you still have to select what you want"
Huh? Do you actually grocery shop? Do you really understand where they put everything? Let's say you are looking for beans. There are beans in 5 different aisles in the store, are you going to pick the right aisle the first time?
"risk having your ice cream sit on the outside step melting"
Well clearly you haven't used one of these services either, because they don't deliver frozen goods.
"It can't be much cheaper, as most grocery stores already run incredibly thin margins"
Well it IS cheaper for many items, so what does that tell you? Their margin on some items is indeed low, but on specialty items, spices and such it is really quite high.
"And with Whole Foods and Trader Joes every other block"
Umm I live in the most densely populated urban area in the whole country and I still have to either drive or take the bus to the nearest Trader Joes or Whole Foods.
Ok so what is different this time from the 10 year ago model?
They have money?
Amazon has been testing their home grocery delivery service in Seattle since 2007. Initially it was for Amazon employees only. But it's been open to Seattle residents for years. I've been using it since probably 2009. So what's the news here?
This has been running for nearly FOUR YEARS . Way to be on the ball, slashdot editors. And as it's still running after four years, it isn't really all that failed now, is it?
Don't think of it as a flame---it's more like an argument that does 3d6 fire damage
Part of the problem is with fruits and vegatables. When I used Webvan in 1999-2000, they had the absolute best fruits and vegatables. However, that is actually a problem. Because consumers believe they can pick good fruits and veggies when at the grocer, any place that does it for you must stock a consistently higher quality of perishable items so that consumers are disappointed with what they get. Because you have to stock the higher quality of fruits and veggies, you profits margins go down because you can't charge more for the "same" product.
This as been running for years.
And fresh food delivery is a proximity service. There are plenty of no-name who've replaced webvan with success. A colleague buys from the local supermarket via Internet. He says it's very convenient: there's a list of recurrent products that you setup once and when you order you can always check them off and add whatever else you want. He says that his weekly internet shopping doesn't take more than 5 minutes. Going to that supermarket in the flesh is a strange experience: there are more teenagers running through the aisles like crazy to fulfill the web orders than there are live customers.
Non-Linux Penguins ?
If anyone can make this work, it would be Amazon. They have, in their own way, been as influential in the tech arena as anyone these last few years. Figuring out the logistics of home grocery delivery should be doable for them.
I am single and live in nyc. In the past I found fresh direct as a very convenient way of being able to get quality groceries at a specified time rather than having to go through the chore of going after work to a supermarket with inferior produce, only to have to carry back a shitload of bags. I haven't used fresh direct for around a year though, as their prices have gone up to the point where it simply isn't worth it. I imagine I am not the only person who makes a modest salary who has done the same. I haven't researched it, but I'm curious if fresh directs business model has proven itself to be sustainable, and if so can that business model be sustained with competition.
The submission is positioned as if the idea of delivering groceries is a concept that has repeatedly failed. I'd like to know what justification there is for that statement. Yeah, Webvan/Homeshop and Peapod seem to have failed years ago, but I and plenty of other people have been ordering our groceries online from Albertsons, Safeway, and Kingsoopers for at least a decade, now. When I lived in San Francisco, I used Webvan in the late 90s. When I moved back to Portland, I used Albertsons and Safeway until the mid 2000's. And since I've moved to Denver, I've used Kingsoopers for the last six years.
If Amazon can do a great job, I'd consider using them. I'll at least give them a shot. But the idea that delivering groceries is a dumb one is just absurd. Not every experience over the past dozen years has been perfect, but the few problems I've had here and there with Safeway/Albertsons/Kingsoopers are far outweighed by the fact that I don't have to set aside a couple hours a week to drive to the store, find parking, get a cart, go up and down the aisles, deal with people and their tantrum-throwing kids, wait through lines, load up the car, come back home, unload and put away the groceries. All I have to do is click a button that adds everything from my list to a cart, make any changes I need, click a button and then my groceries will just magically appear - delivered right into my kitchen - in a 30m or 2hr window of my choice. I literally spend around five minutes per week dealing with groceries. Period. It's fucking fantastic.
Well, at least if it comes two days late like my last order i can have a milkshake while i post my review...
We live in a fairly rural area of western Washington state, and we subscribe to a home delivery service offered by a dairy - something that's been going on in the US for probably a century. The products they offer are somewhat limited - the usual eggs and milk, butter, sour cream - but they do carry a few "extras" like whole bean coffee and cookie dough.
I know a number of competitors have died off over the past couple of decades - Smith Brothers seems to be the last man standing in this area. For now they apparently are doing okay. But part of the reason they are still around is their prices are somewhat high. We think it's worth it, since the quality of their products is superb - but for most people price is paramount. They don't care that the grocery store's milk is watery and has a funny aftertaste, as long as the price is low.
#DeleteChrome
It would be great if we could do away with purchasing things in bulk, i.e., buying a full bottle of a specialty spice even though you're just going to use half of a teaspoon of it, and instead just receive exactly what you need in general purpose containers (saving also the hassle of measuring it yourself). Especially as someone who likes to cook gourmet, I like to buy ingredients as near to when I'm using them as possible.
We could have "one-click recipes" where, instead of spending time locating ingredients, people can share their purchase orders with the associated recipes so anyone can get everything they need to duplicate it with a single mouse click.
Getting things to order, and in exact quantities, could also avoid the energy waste of everyone owning large personal refrigerators and freezers, besides avoiding the cost and environmental impact of fancy packaging, etc.
It becomes increasingly sensible the larger the scale of customers.
When things get complex, multiply by the complex conjugate.
They've been doing this in Seattle for years. This isn't like something that's just begun. Ask someone in Seattle about it!
The most awesome thing about Amazon Fresh is that they have a pretty good selection of electronics, and they can be delivered along with a cold six pack by the next morning.
Heck, I'd even do it if I had to drive to a local spot and pick them up. Why? Because I'm sick and tired of having to goto one local store (Wegmans) with their idea of sale prices - 2 for $5....
Let me order or queue what I need during the week and I'll decide when to go get it. No lists, no coupons.
Peapod is still in operation, so it must be possible.
My mind works like lightning. One brilliant flash and it is gone.
We've used a service in the Charlottesville, VA area called Relay Foods that offers free pick-ups from hubs or for-fee home delivery. I believe they've also recently expanded to Richmond. One of the nice features is their inclusion of locally produced goods that can be difficult to find or obtain in area stores. We've been really happy with our experiences thus far.
While Charlottesville does not have the population density of NYC, it has a strong food and farmers' market scene that is likely responsible for its success here. So I don't know if this is a model that will necessarily transfer to other areas. Relay has recently expanded to Richmond, so it will be interesting to see how well it performs there.
You can't resurrect what hasn't died. WebVan and HomeGrocer may have gone belly up, but Gopher Grocery's been doing it successfully, and growing, for years...
"Convictions are more dangerous enemies of truth than lies."
In the twin cities of St Paul/Minneapolis have Coborns Delivers. Very good service for $5.00 each delivery. The truck delivers once a week, if not home and there are items that are frozen or need to be kept cold they pack the frozen items in dry ice and then a compartment with dry ice to keep other items cold. Also there is a liquor delivery service, Merwin Liquors that will deliver for free with limitations. Also local tobacco store will deliver a carton of cigarettes for $5.00. I don't use either the liquor delivery or cigarettes but the Coborns Delivers was nice when I didn't have a vehicle and the weather was cold.
The only thing i really miss from the dotcom era is HomeGrocer. I used it every week for as long as it was available in DFW and loved it.
I don't really know, but I always thought it was the delivery side of things that killed it economically. I'd settle for local pick up points. Place order online, show up when it's ready and grab your stuff. Still a huge time saver. Would love to see a local store offer this, have a couple of people prep orders for you to pick up at the store.
This could work if making partnerships with smaller/medium suppliers that will provide quality products instead of big surfaces who's vegetables and fruits are less tasty.
You just have to cherry pick profitable business from it. Not only is that going to be more profitable, it might provide a better user experience.
Let's take coffee. My house buys a lot of coffee. It's one of the things that might instigate a trip to the grocery store. One of our family members is lactose intolerant, and lactase pills are another market drip driver. A lot of that stuff could just show up on our doorstep every couple of weeks. Occasionally we'd have to go out for extra coffee if guests were coming.
Amazon could easily reduce the frequency and length of my trips to the supermarket. In fact, I'd much prefer to go to the butcher, fish monger and greengrocer for many of my food purchases, but since I'm going to the supermarket anyway to restock all kinds of stuff, I make do with mediocre supermarket substitutes even though I have excellent specialty shops nearby. It wouldn't have to deal with perishable goods at all.
In response, supermarkets would have to become a lot more shopper-friendly to stay in business. I *hate* going to the supermarket, because it's designed to steer you toward certain brands or to encourage impulse purchases. Amazon is too, by the way; but the supermarkets do this by trying to keep you wandering in the store. A about a decade ago search kiosks appeared in the supermarket chains I use, but shortly afterward they disappeared. Since the kiosks worked well for the shopper, I'm guessing they went away because they reduced the size and profitability of the average sale.
I tried PeaPod a few years back, but the problem was that it was even more tedious to use than going to the supermarket. I think it tried to do too much, including things it can't ever do well. I want to see the meat, fish and vegetables before I buy them. Now if I could make regular trips to the butcher, fishmonger and greengrocer and only occasionally have to visit the supermarket, I'd be a happy shopper.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
> I'm curious to see walking, transit and cab use mentioned but cycling left out; is utility cycling uncommon in New York? If so, could you speculate as to why?
A few people do it, but it's not all that common. For one thing, as another commenter said, full-size supermarkets are fairly rare; we mostly have corner groceries, and some undersized supermarkets. Upscale chains like Whole Foods and Trader Joes are starting to penetrate the city, but they still serve relatively few people, mostly in certain Manhattan neighborhoods.
About bikes specifically: NYC has not traditionally been super-friendly to bicyclists. I give Mayor Bloomberg and his transportation commissioner credit for massively expanding the bike lane system over the last decade... but they've now encountered so much pushback (mostly from car owners and NIMBYs who just don't want anything changed) that the expansion has slowed to a crawl.
The NYPD is now doing a lot more ticketing of cyclists. Frankly, a lot of this is deserved. I support cycling, and the expansion of bike infrastructure, but I constantly see NYC cyclists flagrantly violating traffic laws and endangering both motorists and pedestrians. Some cyclists here seem to think they have a special status than enables them to glide past everything and everyone else -- including red lights and stop signs -- and to charge thru traffic with impunity.
Basically, the city and the local cyclist community both have some distance yet to go before we have a mature, well-integrated bicycle culture here.
Usually delivery food to an area requires some form of distribution to be "nearby". This might cause some problems for Amazon with their sales tax problems because it means they would have an in-state nexus in a lot more locations. (of course, this will probably be a completely seperate legal entity that just happens to have the same name, shareholders, executive as the other ones).
But for it to be successful, it has to:
1.Have minimum order requirements to stop someone ordering a pack of chips and a bottle of soda and nothing else.
2.Not try to roll delivery costs into item prices. Charges actual costs for delivery from wherever the local warehouse/delivery point is.
3.Have prices and range (including fresh fruit and veg, meat, bakery, dairy etc) that are comparable to what one finds in a local supermarket.
Get that right and people who are willing to trade money (delivery costs) for time (time spent going to the supermarket etc) will use it.
Some cyclists here seem to think they have a special status than enables them to glide past everything and everyone else -- including red lights and stop signs -- and to charge thru traffic with impunity.
I'm a cyclist (in Indiana, not New York), and I follow traffic laws when possible. But one intersection on the only route to and from work has a fully demand-actuated set of signals. I stop my bike with its tires directly on the crack in the road indicating the induction loop sensor, but my lane doesn't get a green light unless and until a car pulls up behind me. Is a cyclist supposed to wait five to ten minutes for a car to pull up behind and "chaperone" the bicycle?
Amazon has been selling nonperishable groceries for a while and the central fact is that, unlike most of what Amazon sells, they're not cheap. If you buy in quantity and take advantage of every gimmick Amazon offers to bring down the price, you're still at the high end of the regular price at local supermarkets, before any specials, coupons or loyalty discounts.
I used the service at least from 1997 without interruptions.
When my wife was sick after a surgery and I had to work 12 hours a day, it was very convenient.
Nowadays, my father-in-law, who is 81, orders items, which he cannot carry himself anymore, like bottled water, juice, rice, vegetables, fruits, etc. If it were not for this delivery service he would not be able to stay home alone, independently.
...we already have FreshDirect http://www.freshdirect.com/ Their model is to streamline the delivery from growers to consumers. The model works well in a highly urbanized area like NYC; especially when the competition is WholeFoods and their overpriced, crowded, inconvenient ilk.
I mean seriously... if you add home grocery delivery to the internet and make the prices reasonable enough, the fact is, the 0.5 miles a person walks twice a week to get their fat asses out of the car, into the grocery store, to the check out and back to the car will be eliminated.
While it sounds like a REALLY GREAT business idea.... and I'm sure it will take off... it'll take off for the wrong reasons. The poor bastard delivering the groceries will get to the house and there will be a sign on the door "There's an extra $10 tip for you if you come in and unpack the groceries while I leave my fat ass planted on the couch and finish off my last batch of Smore's goldfish".
I travel around the world quite a bit and outside of the U.S. and England, I have never seen a fat person actually get themselves a motorized wheel chair for no other physical disability other than obesity. In the U.S., these people are all over the damn place. I've been stuck behind 3 sisters driving their fat mobiles through the grocery store side by side while chatting... AND EATING!!!!!!
Already we don't go to the book stores anymore. We don't go out to rent movies. We don't even leave our couches to order pizza since we have our iPhones in our hands at all times. We have 60" screens or projectors in our home theaters so we don't bother going to hte movies anymore either. We go to work and we go to the grocery store. Hell, we don't even go to the mall to shop for clothes anymore because we're too embarrassed to walk into the fat store and find out that they don't see our size and it would have to be special ordered.
Rise up and scream at Bezos "DON'T DO THIS!!! DON'T DESTROY AMERICA!!!!"
I play soccer and basketball. I have games and practices to attend weekly. My son is currently competing in track and soccer, he also has games and practices to attend weekly. My wife is working on her Master's Degree while working full time in her field.
This while attending to her elderly parents, being responsible home owners, and responsible parents!
I would _gladly_ pay to free up that two hours a week, or so, we use for grocery shopping!
So while your post was funny, and even partly true, it certainly doesn't reflect the entire reality of life in America.
I'll avoid my other rant about how Americans who are plainly not the target of a comment seem to think it always it's always about them :)
I am an American living in a communist... Oops I mean socialist country. We live with the belief that part of taking care of ourselves includes taking care of the people around us. It's a sense of community. When we improve the quality of life for our neighbors, we improve the quality of our lives a well. If that means I have to inconvenience myself a little to make everyone else's life a little better, so be it.
When you live in a place with a major obesity problem, as the problem gets worse, for you to maintain your standard of living, you will have to work harder to compensate for the shortcomings of those who sit around thinking that if they ignore the problem long enough, it will go away.
So, I stand by my earlier remark that this is just a terrible idea on many levels.
from 1999 to 2001, in Houston Texas, i would order from Groceryworks.com. it as a nice new startup company (before the buyout and shutdown), with new delivery trucks. In fact, i still occasionally see the nice formerly new trucks they bought when I drive around town, rebaged for whatever company that bought them. /.ers who are still viewing this article, do you think the lack of impulse buys at the long checkout line could have killed it?
Why did I like it?
1-maximum convenience (groceries were put on my counter by the delivery person)
2-no temptation to buy things i didnt need. i simply bought what I new i was out of.
3-didnt have to deal with the parking lot clusterf**k or shoppers with no courtesy and let's not forget minimum wage help who like big government.
Now i'm married and my wife normally shops at HEB.
I've already read many views. So,
Thanks for your feedback