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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.
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
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.'"
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.