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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.
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.
Amazon.com is quietly trying to resurrect the failed business models of WebVan and HomeGrocer
aka the same successful business model of peapod.com. Talk about trashing the service by carefully selected comparisons with failures. Disclaimer, I'm a very happy peapod customer, although I haven't ordered recently. When we had two newborns, medical issues, and an utterly packed schedule, it was a lifesaver (maybe literally, in terms of food quality vs the alternative of pizza delivery every day or whatever). I also greatly enjoyed shopping online vs in the store because of the "log in and work on the order for 5 minutes each day" ability. Also the experience of shopping while reading a cookbook, or at weird times of day, was oddly pleasurable.
can this idea fail?
About as many times as mom and pop restaurants fail, superficially the number is about infinite. I suspect you can realistically raise capital to do about one every couple years, and it'll be economically feasible to use diesel delivery trucks for only another decade or two, lets say another 10 times.
"Science flies us to the moon. Religion flies us into buildings." - Victor Stenger
Now, perhaps I'm missing something here, but I wasn't aware it had failed.
Is it's failure a US centric issue?
The reason I ask is here in the UK we've had home delivery for years, and pretty much every supermarket offers it.
It's highly succesful here and even Occado which is a home delivery only brand with no high street presceience I believe is even turning a decnt profit at last.
Perhaps companies in the US are just doing it wrong? I understand it'd be an issue in some parts of the US because of the distances involved, but certainly most of the UK is covered by such services and I see little reason why major population centres in the US at the very least couldn't have a similarly succesful model.
So is it just the US it's failed in? has it failed in other countries? In the countries it's failed in what were seen to be the causes?
Here's it's great, if you've got a busy week just order online during work and have it delivered in a 2hr timeslot such as say 8pm - 10pm one evening, even the next day, when you know you'll be home.
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
Now, perhaps I'm missing something here, but I wasn't aware it had failed.
Is it's failure a US centric issue?
Early adopter anti-effect. The first delivery services were traditional dotcoms, in other words they (loudly) emerged, IPO'd, blew up, and sank, all in about 12 months around 1999. Early adopters make early judgments, therefore its set in stone that the entire market in 2011 is dead, because it died in 1999. So the opinion leaders think its a lead balloon and ignore it.
The masses just look at advertising budgets... the dotcoms spent most of their dough on ads, and failed. The current crop of (successful) delivery services are spending money on the backroom so that they actually work. However, if they only spend 1/100th the money on ads, then they can only be 1/100th as successful as the failed dotcoms, right, at least according to the masses. And the early adopters trash it (see above).
So growth is slow, yet seemingly inexorable.
"Science flies us to the moon. Religion flies us into buildings." - Victor Stenger
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 ?
Is it's failure a US centric issue?
The only part of the UK with lower population density than the USA is the Pitcairn islands.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
So explain to me why anyone would intentionally get into this business?
Come to the UK and you will see that most of the major supermarkets offer this service.
A company called Ocado have been doing this since 2002 and dont have any physical stores, everything is picked from a central warehouse.
Tesco's largest stores will have around 4 or 5 vans that will deliver your order meaning your order wont come from a central warehouse but from a store that is closest to you. They even have a iPhone app that lets you scan the barcodes of the products you use to add to your basket.
Who is your target audience?
Everyone who shops for groceries who might want them delivered.
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.
I am not sure, but the difference between the way it works in India(though its on the phone and not online) and US, is that in India you call up your local supermarket/grocery store, and they deliver.
In US, you order from a company like Amazon, where Amazon needs to set up a seperate delivery infrastructure, which is not needed if you live within 15 mins of the supermarket.
Perhaps UK follows something similar to the Indian model and not the US model?
You must do your shopping at a 7-11, because when I was growing up, trips to the grocery store were usually weekly and the time between stepping out onto the driveway and coming back home and unloading the groceries into the kitchen was easily up to two hours all around. Not to mention writing down the shopping list, etc.
I have never gone grocery shopping in my adult life. For twelve years, I have used the delivery service available in my city (pretty much all the main grocery stores like Safeway, Albertsons, Kingsoopers, etc offer delivery unless you live in the middle of nowhere). While it was an enormous chore, growing up, it is a five minute process as an adult. I literally log in to the website, click the button that adds my regular list of groceries, make any tweaks I want this particular delivery, select a window when I want the delivery (I can choose a 30m window or a 2hr window -- seven days a week -- from about 8am to 8pm).
You clearly have never even used it, either, because of your whole idea that "you'll come home and the ice cream will be melted on your steps". That's why you have them delivered when you will be home. Also, they don't deliver if you're not there. Duh.
I have no interest in shopping. It's a chore. It's a hassle. It's like going to the dentist. It is an inconvenience that most would rather do without. As much of that time a I can regain for myself, the better. Even if I just waste that time. At least it's my option. After twelve years of having groceries delivered in three different cities and states, I would never ever consider going back to the whole traditional shopping experience of my parents and grandparents.
Also, having groceries delivered makes a car much less necessary. I telecommute. And I have my groceries delivered. I'm used to an even bigger city with bad traffic, where a car is more of a liability than a convenience, so if I can avoid all that and have someone just drop them off in my kitchen, that's pretty awesome. I now use my car so rarely that I'm considering selling it.
It's not a luxury service. I know that the albertsons version they charge $10 for delivery or $5 for them to get it ready for pick up, but if you're able to work an hour you've just made back the cost. And that's even at minimum wage.
The idea that this is a luxury is really misleading as it ignores the things that one could be doing with ones time, including finding other ways of saving money which would lead to a net gain for the household over doing it yourself.
I used Peapod when I lived outside of Boston for quite a while. The service was excellent for staple products and the ability have saved shopping lists was another bonus. It was definitely worth the few dollars they charged for delivery. I only stopped using them because I moved to an area where the service wasn't available but over the last year I've seen several peapod trucks in the area.
Do what thou wilt shall be the whole of the Law - Aleister Crowley
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.
Wait, what is the luxury part of having groceries delivered? All the stores I've ordered from have always charged $5 or $10. That's not "lots of money" when you factor in the fact that I don't have to use my car. Don't have to use gas. And don't have to spend an hour or two every week doing it. Fuck, it costs at least $5 in tips and fees just to have a pizza delivered.
Perhaps UK follows something similar to the Indian model and not the US model?
Sounds like it. You place your order through the supermarket website, it is passed to your local delivery branch (which is a perfectly normal supermarket that has a few refrigerated vans) which fills the order.
If your supermarket of choice doesn't have a delivery branch within range of your address (increasingly rare), then they won't take the order.
This makes rolling out such a system very easy. The branches already had computers that connected to head office; all they need is:
(come on, the /. CSS doesn't put bullet points on unordered lists?!)
This doesn't save you the time of shopping, as you still have to select what you want.
There is a big difference between doing so by walking around the aisles with a shopping cart vs clicking on pictures on a website.
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.
I'll just quote AmazonFresh FAQ:
What is Pre-Dawn delivery?
Pre-Dawn delivery is an early-morning delivery option. If you choose this option, we will leave your items on your doorstep early in the morning, prior to 6:00 AM, so they're there when you wake up. Your groceries will be kept fresh in temperature-controlled totes, so frozen items stay frozen and chilled items stay cold. Our other Doorstep Delivery services work just like Pre-Dawn--we'll leave your groceries on your doorstep in temperature-controlled totes. You don't even have to be home!
It can't be much cheaper, as most grocery stores already run incredibly thin margins.
Not much, but still.
Also, from "conscious consumer" perspective, hauling a bunch of food in a single truck to many homes is more energy-efficient (i.e. "green") than many people each driving a car to the store to get their own part of that food.
Yup. I've unfortunately at the moment not got access to a car, as well as health problems, and there isn't a local shop in this village.
To get my weekly shopping done, otherwise I'd have to get on a bus, and spend $5 or so getting into town and back.
I can shop online at Tesco, pay the same price as in-store, and order anything, for a delivery of $5 or so.
In addition, it lets me get bulk buys of staples, when they are on special offer, which would be totally impossible on the bus.
For example - last order was 8*2Kg packs of spaghetti, as they were half price.
Combined with a large freezer, this works well.
I've ended up shopping around monthly.
Admittedly at the end of the month, I'm more reliant on the frozen stuff, as the tomatoes and bananas have mostly been eaten.
A breadmaker means I've got fresh bread whenever I want it, and I'm more able to plan tasty healthy meals on a budget.
(Asda do seem to offer slightly lower base prices - but much of my orders come from buying a years of good offers at once)