Amazon’s Battle to Break into the Grocery Market | Hacker News Reader

Amazon’s Battle to Break into the Grocery Market

bloomberg.com

107 pointspratap103107 comments

If Amazon can't be trusted to sell genuine memory cards, Apple accessories or even books now, I wouldn't buy baby food from them.

https://twitter.com/billpollock/status/844030960333152256

https://9to5mac.com/2016/10/19/amazon-fake-apple-chargers-ca...

http://247wallst.com/consumer-electronics/2016/12/05/amazon-...

“It takes a lot of time and experimentation to work through unpredictable scenarios like a child picking up an item or a person wearing sunglasses or a face muffler,” he said.

This is funny. Because these aren't unpredictable scenarios at all in a grocery store, unless you are having to write software to deal with them.

I'll be a believer when it can handle a Thomas Crown scenario - multiple people in the same outfit crisscrossing around each other. While a bowler hat flashmob is unlikely, a group of similar dark jackets etc isn't.

Actually, you can't forget the possibility that someone will attack it, for profit or even just the lulz. If you have the idea I can pretty much promise someone's going to try it long before there's a 1000 of these stores.

People are attacking regular stores' checkout systems already. We call those people shoplifters. And our normal method of dealing with them (have a human that catches a few of them to deter the more law-abiding citizens) will work equally well in a checkout-less store.

The big new challenge is telling the difference between a shoplifter and a normal software error. But that is only relevent for the most sophisticated shoplifting ideas.

Exactly. And, since you have to scan your smartphone before entering, they already have your name, address, credit card details, etc., so shoplifting would be extremely risky. Most teenage shoplifters might be able to outrun a security guard that saw them leaving with unpaid items, but what good does it do you when the store already has all your personal details and can simply send the police to pick you up at home?

steak = 4011

Protip: Avoid going to the closest Amazon Go store after a Seahawks game. Unless you're wearing Broncos gear.

This scenario is the same as any other machine learning environment:

The output is prediction with a % confidence score. This means the threshold can be set such that worst case certain people need to be checked out by hand. Fallback to standard checkout means they still cut down quite a bit on the needed human interaction and they can set KPIs around improving those stats.

While it's sometimes okay to interpret the output of a model as a confidence, you do so at your own peril because that's not really what the model is optimizing. There are often cases where the model outputs a very high "confidence", but the model uncertainty is (or should be) very high. This is generally the case anytime you give the model data that is very far (in some sense) from the data that it's been trained on.

Amazon needs to get a lot better at selling people complimentary goods. Once I buy something, I frequently see multiple advertisements for that exact product. Why can't they develop a database of products that compliment each other and so when someone buys a kitchen tool, they start advertising cookbooks.

Example: "On Prime Day, Members purchased over 215,000 Instant Pot 7-in-1 Multi-Functional Pressure Cookers"

http://www.cnbc.com/2016/07/13/amazon-prime-day-is-biggest-d...

If you have a database of 100s of thousands of people who all are suddenly looking for recipes and raw materials for a pressure cooker, why not advertise to them?

I'm no expert in this area. But I think this is due to the inherent nature of a system where the ads are all pushed by people marketing specific products, rather than a centralized "what is the best product to market to this person right now?" type of system.

It's pretty easy for a toaster guy to say "Amazon, show this ad to people who looked at toasters" without ALSO selectively hiding it from people who just bought a toaster.

It's harder to pin down a pattern indicating the imminent purchase of a toaster. Like for instance, someone seems like they're probably 20 years old, and now they're looking at wedding stuff. They are probably going to be influenced by a toaster ad, but getting it to them would require a toaster manufacturer to set up some pretty complicated shit.

From a customer perspective I wish they would try selling to me a bit less, I don't shop at retail stores that are too in your face, it's getting like that at Amazon.

They do do this -- people who buy X also buy Y.

They do remarket to people automatically if many people have purchased both product_x and product_y. If you sell stuff to people on Amazon, you could also manually set up a Facebook, Google, etc. remarketing campaign to do just that using your customer emails.

They actually do advertise products to you in your favorite category based on your recent purchases.

In general you see the same product remarketed to you over and over because it's an additional layer of difficulty to add people who have purchased a product from you to an exclusion list. It's definitely more effective to do that (and Amazon does try to do that to you if you either haven't purchased it after a certain period or have purchased it on that particular device), but with any really complicated website with millions of products some things are going to get lost.

>If you have a database of 100s of thousands of people who all are suddenly looking for recipes and raw materials for a pressure cooker, why not advertise to them?

If Instant Pot wanted to break Amazon's TOS and make some extra money selling their Amazon customer lists to publishers, they could probably do that. Otherwise Instant Pot would have to get into the publishing business themselves to get access to those lists.

> Why can't they develop a database of products that compliment each other

Well, the goods would need some way to communicate, and then there's the question of how does an inanimate object come up with something nice to say about another object....

Unless you meant complement.

</snark>

I know this discusses a few strategic plays Amazon is making but shortfalls of the self-checkout project (AmazonGo) are interesting:

"In its video touting Amazon Go, the company said it was aiming to open the site to the public in “early 2017,” and it hasn’t provided an update to that timing. But the technology has been crashing in tests when the store gets too crowded and requires human quality control, people watching video images to make sure customers are charged for the right things, according to a person familiar with the plan."

Not super familiar with image recognition but do you think that's just a failure of the training data set or a much more complex technical problem?

When the demo was released, people had a lot of questions about how the cameras would deal with occlusions and products being covered up by bodies and odd angles. Recognizing and localizing and tracking a single person picking up individual items slowly is a much easier task than tracking many people in a crowd crisscrossing and blocking the camera constantly; that it is apparently failing in exactly the scaled up realistic scenarios where you would predict increased failures points to it being a genuine difficulty and not simply too few crowded scenes in the training set.

(I bet their deep learning team is having a lot of fun trying to figure out how to make RNNs rather than CNNs scale and train well...)

I had the same question about cameras dealing with those issues, but this article says "Products are embedded with tracking devices that pair with customers’ phones to charge their accounts". It sounds like this means every product has an RFID / other tag, rather than using computer vision.

Sure, but who'd actually trust Amazon with their food? I know I wouldn't, they've screwed up 3 out of 5 orders in the past year, leading me to have little faith that they won't give me E Coli covered veggies.

They're opening a large, car centric Amazon Grocery pickup location just over in Ballard as a test, but the particular location they picked is a parking lot for 3 to 4 hours a day, and is over 3 blocks from transit (and where they will be putting the light rail in) due to Safeway & Walgreens already owning that prime real estate.

Since the article stresses repeatedly that Amazon is all-in on produce... I think this is a big question for their ML approach.

One of the annoying parts of not-really-self-checkout that is available in big grocery stores today is that you have to scroll through a screen, choose the correct brand (i.e. Dole Banana), and then weigh it before it prices your order.

Wonder what their strategy is to price variable weight products (i.e. produce) without introducing new friction into the user experience

Amazon will likely pre-weigh the items and give each a price embedded barcode, though it will be quite labor intensive even with the $100k wrap and weigh machines you can buy today.

Yeah. This is one of the reasons why I really don't care for self-checkout in grocery stores. Sure, self-checkout is mostly OK so long as you're swiping small boxes of barcoded stuff. But get to produce and it's a mess. I basically won't use self-checkout if I have any non-barcoded merchandise. (Which basically describes every time I go to a grocery store.)

Yes - no bar code? I won't self check, but also the large items that won't fit in the bag. I learned the hard way that it can take too long for them to get the self checkout lane to stop crying about how I didn't put a 10' pipe in the bag. Unless I have one or two well marked, small items, I avoid the self checkout.

The particular fascination of big box home improvement stores has seemed a bit odd given the number of items that don't fit with the model. Sure a lot of small purchases do but many don't.

They might go the way of Trader Joe's and just charge a blanket price per "piece" of produce.

FYI, the code for fresh produce is usually printed on the little sticker or on the tie.

Can you say what happens when they screw up the order? Is it your responsibility to wait around for someone to come collect the wrong parts of the order?

Depends, twice I've had to ship it back, and once Amazon told me there were no returns and refunded me (Samsung Evo+ 64GB that only did 6MB/s, rated at minimum 10MB/s). That being said, I need to throw that MicroSD card away, whenever I use it in a camera or single board computer instead of a tested Evo, it causes poor performance.

Oh I was asking about the food ordering specifically. I was curious how errors are resolved with perishable items.

Complain, receive refund.

So no different than any other Amazon order. I've noticed I have do the "complain receive refund" more and more in the last year with them.

I've ordered groceries with Prime Now a few times and never once was worried about trust. I'd probably trust their produce more as the people who have also touched it aren't random shoppers.

Sure, but that isn't the prime vector of E Coli and other illnesses spreading. E Coli literally comes from workers shitting in the fields due to the breakdown of the labor movement, as they are not allowed breaks or access to a bathroom with a place to wash afterwards. Thus how you end up with Chipotle serving up E Coli covered veggies.

Not having a store that your food comes from might make for a safer mental picture, but Amazon is going to go with the cheapest vendor every time, and they don't have the scale of Kroger or HEB to knock prices down anywhere near them, thus they must buy lower quality goods to hit the same price point.

It's a nice story, but E. Coli comes from fields fertilized by manure, or feces contaminated water.

[0] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC525133/

> Not having a store that your food comes from might make for a safer mental picture, but Amazon is going to go with the cheapest vendor every time, and they don't have the scale of Kroger or HEB to knock prices down anywhere near them, thus they must buy lower quality goods to hit the same price point.

It's a dangerous game to bet against Jeff Bezos losing because Amazon lacks scale and problems hitting price points. Amazon may not have the grocery scale of Kroger today, but it also has billions of dollars to spend, a different cost structure and no need to compete with existing grocery chains completely on price (it's a different service, Kroger won't be at my door within two hours).

I do. I order from Amazon Fresh every week. The reason is simple: after fifteen weeks of having Safeway deliver my food, not a single time did they deliver all of the items I actually ordered.

Grocery net profits are 1.7%.

http://www.fmi.org/research-resources/supermarket-facts

Amazon barely makes money on retail operations. What is their rationalization in getting into this market?

From the article

>“Amazon wants to be the first thing any consumer thinks of when they need to buy anything,” said Jim Hertel, a senior vice president at marketing technology company Inmar Inc. “Food is the largest retail category. They can’t do what they want to do without grocery and they’re definitely not going to give up.”

I'd also imagine Amazon thinks they can do much better than a 1.7% margin by leveraging all of the improvements to their approach outlined in the article.

2030: Government breaks up Amazon into smaller companies.

Why would that happen? US government appears quite happy to allow massive companies to operate as they please. There hasn't been much "trust busting" since, well, the "trust busting" era, outside of finance anyway.

Judge Greene's grandaughter presides over the case.

But. One difference was that At&T got something for agreeing (able to sell computers). What is Amazon prevented from doing??????

[1] The case, one of Greene's first after being named to the bench, resulted in the 1982 consent decree between AT&T and the Federal Trade Commission. The consent decree, later amended and usually called the modified final judgment (MFJ), provided for the Bell System divestiture, AT&T's spin off of the seven Regional Bell Operating Companies (RBOCs). The conclusion of the case freed AT&T to enter the computer industry, from which it had previously been barred

Wildly overconfident cost predictions are amazon's #1 growth market.

Amazon's business model is all about winning on razor thin margins. They do this by making the cost side more efficient.

For other companies, I would agree with you, but Amazon is basically allergic to high margin businesses. Their entire business is based around scaling up low margin businesses to be so efficient that nobody can compete with them.

Margins don't tell whole story of that business.If you start with $100 and sell $100 worth of products each year, than yes, your profit will be 1.7%.

But if sell products fast("inventory turnover - TTM") and re-use the money, with $100, you can sell $1000 of product per year,getting 17% yearly ROI.

But of course 1.7% is low so it's not easy staying on the positive side of profit.

He mislabeled the stat. Grocery profits are 1.7%, not margins.

> Net profit after taxes-2015 1.7%

This is net-profit from revenue, i.e. from those $1000 of sold goods. But you only need to invest $100 to buy them.

No. Sell them then invest another $100 to restock. ROI remains at 1.7%.

Your model is too simplistic here. The actual cash leaving Amazon's bank account may not be due to their supplier until 30 or 60 days after delivery. If it takes Amazon 6 days to sell that $100 worth of goods, they can effectively sell $1000 worth of product before that initial cash is due to the supplier if we're talking net 60.

This is how a $100 initial cash investment in inventory can produce $17 worth of cash at the end. You use your leverage with lots of small suppliers to force them into offering generous credit.

Note: this ignores the fact that these numbers are based on net profit instead of gross profit which would be the actual relevant number here. And the gross profit in groceries is a lot higher than 1.7%.

You're desperately trying to contrive a scenario that does not exist, the rate on buying merchandise and selling it in groceries is still 1.7%. Borrowing money and playing with the time window does not change this.

Real estate appreciates at 4% (on average, but let's say it's constant for the sake of argument).

I buy a house that costs $100,000. My down payment (cash out of pocket) is $20,000.

I pay 3.5% interest on $80,000 as I'm paying down the loan, plus property taxes and insurance, and it comes to $546.74/month [1]. The rent comes in at $550/month, pretty much canceling out the mortgage.

Am I making 4% per year on my investment, then, because that's the amount the real estate appreciates?

No, I'm making 4% of $100,000 per year, or $4,000, on my $20,000 investment. That's 20% per year. [2][3]

Leverage properly applied can raise your net profit.

You're welcome.

[1] http://www.mortgagecalculator.org/

[2] The numbers can realistically be much better than this, given the right circumstances. I am personally using this as an investment strategy, and yes, it doesn't just work this way "in theory."

[3] I'm ignoring repairs and vacancy rate for simplicity. Those obviously hurt profitability. But as I mentioned in [2] above, if you pick your investment property strategically, your margins are much higher, so that's your cushion.

I'm not going write a long explanation about this, but "borrowing money" and "playing with the time window" is the foundation of so many different kinds of businesses I can't list them all.

Float doesn't change the profit MARGIN.

It sounds like there's a lot of confusion here between ROI and margins.

ROI is not margin. And there are different types of margin.

"Net margin" is the profit from revenue net of not only the cost of merchandise, but all the overhead costs: the cashier, the retail leases, the buyer, accounting staff, management, etc.

"Gross margin" is (roughly) the amount made for every additional sale. If you buy apples for $0.80 and sell them for $1, your gross margin is 25%. This gross margin must pay for all the overhead expenses mentioned above. Based on the total number of apples you sell, you may figure you have to cover $0.18 of overhead per apple sold, leaving you with a net margin of 2%. But the important thing to understand is that you aren't actually paying $0.18 more in overhead per apple for every extra apple sold: you're making $0.20 and paying nothing in extra overhead. So increasing volume of sales can substantially improve net margins, if it doesn't take extra overhead.

"Return on investment" (ROI) relates to how much capital is required to generate net margins. You absolutely can run a low net margin business that has high ROI. How? You turn inventory like crazy, or better yet, don't have inventory (think drop-shippers). Or you take a long time to pay suppliers, reducing the amount of capital required by the business, and get paid up front by customers. Amazon's market model for third-party sellers ("FBA")would be high ROI even if it were low margin because they do not own the inventory, get paid up front by customers, and then sit on the cash for 90 days before paying the FBA vendor. Hell, I suspect the total capital required for that business is negative. No wonder they're so focused on expanding it! You don't need high margins if your business model throws cash at you. Just keep net margins above zero and you'll be swimming in cash.

(Hint for startups: find a business model like that. You won't need VC and you'll get vastly personally richer than one with high margins, but which requires massive capital, and therefore dilutes you as the founder to a pittance.)

It is also possible to have a business with high margins but low ROI, if it is extremely capital intensive relative to profits, such as a big manufacturing plant in an industry where it takes them a long time to get paid.

I'm not sure what Amazon's plan is. But the fact that the grocery business has low net margins is not a reason not to get into it. It all depends on the economics, which is more complicated than just "low margin."

I am really skeptical of this. Most retail stores sell at a 1.5X-2X markup from wholesale, and the big grocery chains around me have massive private label businesses. This statistic might be missing the extra profits they get from owning their own food brands as those might belong to separate companies?

There have been numerous public grocery store companies over the decades, so the financials are very well understood at this point. They're all notorious for very poor margins. Most of retail in general is famous for mediocre margins to begin with, and then inside of retail, near the very bottom, is the grocery business.

Take Whole Foods an an example. They're a top tier margin company inside of the grocery business. Their net income margin is typically 3%. That's a good outcome in the business. The net income margin for Sprouts Farmers Markets the last three years: 2.5%, 3.5%, 3.6%.

The retail business in the US also happens to pay among the highest corporate income tax levels on the planet. Whole Foods paid 38.6% last year (almost 39% the year before that); Sprouts paid 37.6%. They get squeezed from almost every direction.

And why are the net profits 1.7%? What are the major drivers of cost, and how might Amazon be positioned to combat those?

Also, Amazon running a business at 1.7% net profit for the sake of keeping existing customers happy and potentially acquiring more of them might be worthwhile.

would it be possible that if they succeed to create a completely automatic checkout/payment system that the savings would significantly increase the profits in the long run?

> Workers at Amazon Fresh, the company’s grocery-delivery business, threw away about a third of the bananas it purchased because the service only sold the fruit in bunches of five, the student concluded. Employees trimmed each bunch down to size and chucked the excess.

If anyone was wondering about the bananas, the paper (https://dspace.mit.edu/bitstream/handle/1721.1/99025/9213069...) says (pg33) that after it was identified, they switched to selling 2lb bags of bananas, which the banana growers were already able to provide, so they scrapped the whole exactly-5-bananas-and-tear-to-make-fit.

> In addition to the obvious financial impact of this, many Associates found the process frustrating since it was highly repetitive, and they did not feel they were creating value for the customer

Well, that's one way to phrase it.

i'd love it if they could do this in a way that ensures quality. my biggest problem with amazon currently is even with things as simple as cologne or cookware, you can't tell if what you'll get is real or a cheap knockoff.

    It lures inventors and retailers with shopping volume
    and frequency, and then sinks them with low margin.

That is really the only quote you need to read.

Grocery margins are razor thin. Local/Regional competition is insane.

IMO every company's approach to the problem is completely wrong! You don't try to offer online the same items that local stores sell off the shelf. Instead, treat the online outlet as an interactive test-market.

Walmart and Amazon are both in a great position to do this! Setup an online store that allows established customers to suggest items that they are unable to find on local store shelves. Allow them to also flag other submitted items as interesting. You have a curation staff that fleshes out submissions with images and descriptions before they go live. The company's merchandiser evaluates the balance between interest in an item and the difficulty of its procurement. To aid in appropriate pricing, perhaps the system also requires submissions to include a reference to the most similar item that is already stocked on store shelves. Because the company is offering exclusive access to the items the profit margins can be kept high.

From what I've experienced product selection in US stores is in general far better than even the same store in Canada (including Walmart), but there might still be a few items not stocked in local stores that people will pay a premium for!

Sort of wish they'd focus on what they already have first. I mean I get it, it's a good market to get into ...but.. how about - making a single login for abebooks fr, uk, com, etc.. that aligns with your main amazon account and - audible account. Why do I need maybe 7 different accounts on services owned by the same company? Better yet, how about taking the databases of books on sale at the various abebooks sub regional sites and put them on the main amazon.com page. I collect a lot of old cookbooks, and old lectures (Rede, Chichele, Ford etc) and often find that to find better deals than what is on amazon.com I have to go on different abebooks sites to find them. Also - have had experiences where I go on amazon fr or ca and order a cookbook easily purchasable on those sites vs .com site. It's terribly aggravating! So I just wish they'd focus on making that easier to deal with before venturing onto other areas. That said, grocery should be decent.. I already hire taskrabbit individuals to do my shopping for me..they are hit or miss.. I never put them in charge of buying seafood..never.

> making a single login for [...] Why do I need maybe 7 different accounts on services owned by the same company?

Wasn't this what the HN community was up in arms about when Google did it for YouTube?

I suspect not, since that seemed to stem from a "forced-merge" of what where separate identities, for communication purposes. Basically, people don't like their Youtube comments and viewing history being tied in with a Google+ account (even if that wasn't happening, people where worried).

However, there's not usually that same desire for separate identities with online stores (for non-intimate purchases). So when a consumer goes to buy an audio book and they see they can use the same Amazon login that they use for buying USB chargers and lightbulbs, all they think is "oh, how convenient"!

I don't really consider myself part of HN. I'm an observer. Lots of interesting articles are shared with some great comments that follow.

I think though the Google and Youtube stuff is a bit different than what I would like to see with Amazon and abebooks. Youtube was known for it's commenting feeds, there was an anonymity around making comments with usernames to hide behind. Forcing you to create a single login so to connect to your profile page on Google removed that anonymity and was aimed at curtailing the atmosphere found in the comment sections. Thankfully, it has prevailed to some extent as I always enjoyed the comments on videos despite how crude they can be at times. It's cheap entertainment. For Amazon/Abebooks... I mean it's really about just ordering products. I suppose if you write reviews there is that issue sort of but not really either. I rarely see reviews on abebooks compared to amazon. The atmosphere within reviews on Amazon say pre-2009(?) was humorous as well. However it seems Amazon has long stamped out the trolling comments/reviews. The comparison I think might not work so well then in regards to single login. Especially considering that abebooks/amazon aspect is to order things and have it shipped to my house..my residents. I'm not necessarily trying to be anonymous behind various usernames. I rarely do reviews, and it's with a different account usually to counter books that only have 1 review by someone giving it 1 star because it took too long to ship..or something thus not based on the content of the book. Well I use to anyways counter that stuff but I really don't care much these days so I don't really bother. I just want to simply order books without having to log onto 7+ different sites all owned by the same corporation.

edit: more words added.

Not really. The backlash came more from Google trying to push G+ alongside that YouTube rollout.

I lost control a YouTube account with over 4 million views due to the changeover, so I am kind of bummed about it.

A few things that Amazon could do better compare to Instacart:

- they bring you huge green boxes and often put only one or two items in each, they are highly unsightly and take up a lot of room, this must be part of their marketing campaign since it has Amazon written all over it, they ask you to return them the next time after their logo has been imprinted on every part of your brain

- sometimes they put ice bags in said boxes if you forget to take them out they melt and not all the boxes are water proof so water can run through them onto the floor and it can also spoil even if you take the ice out since it leaves the box moist

- not clear where they source their items, Instacart is clear if I want Wholefoods I select Wholefoods, Amazon seem to have way fewer options and not intuitively clear if I'm ordering from a store that I picked or getting random access grocery (RAG)

- they mention they have Belcampo as a store when navigating to it they only allow you to purchase sausages!!!

I'm not sure if Bezos and company know what they're getting themselves into with the US grocery business. It's a cut throat business which has not just some big players but several small to medium sized grocery chains (some as subsidiaries and some as stand-alone companies). And I can tell you as someone who's work in grocery the profit margins are thin outside of the US holidays. Frankly, if Bezos thinks this is going to lead to adding actual profitability to the delivery of their other products I'm not sure I see that possibility materializing under the guise of grocery stores and grocery delivery. I hope they have plans to retreat from that business when (not really if) Kroger and Walmart hammer them on the price. Otherwise, I can see them learning a painful lesson in the near future.

So, my problem with this: I can't usually get things delivered in the same day I want them, and sometimes even the next day. There's no slot available and so on.

I don't really think out what I need days in advance. I'm like, "oh, I'm out of... whatever, I'll go to ShopRite today."

So if i knew you order toothpaste on average every 48 days, i could put a new one in cheapo snail mail on day 43. who is in the best position to predict this and take it completely off your mind? current grocers or amazon? your scenario presumes you need to invoke the order yourself. Amazon is going to be predicting your needs (poorly at first but improving over time). I'd wager this big picture includes getting audio feeds from your house 'hey - who drank the last of the milk?' 'are we out of eggs?', 'that's a shame, these strawberries went bad before i could use them'. I'm sure amazon has considered trash/recycling services to scan product barcodes to see what you've used up to add to the 'predict you' models.

A big challenge is going to be charging me for product i don't need yet. if i get toothpaste 15 days in advance of needing it because i traveled for 15 days of the period, then i'm not going to like being billed for something so soon. i'll feel scammed, like they're trying to ram product/sales down my throat. for this i'd be curious to see if there's a way to charge when the product begins to be used- so medicine shelf time doesn't cost you. That and no-brainer returns. (think dash button for come pick a product up)

Just my 2 cents

Amazon already has subscriptions. Personally, I don't buy anything with a combination of frequency and predictability that makes a subscription make sense but obviously some people do. (Diapers I assume are one thing.) And that becomes harder with with perishables. Customizable but pre-populated (based on prior purchases) would seem to make a lot more sense.

My SO has signed is up for subscriptions for certain recurring purchases. Our usage is too erratic to put on a schedule. I have a new job at home: finding a place for all the things we get automagically delivered from Amazon that we aren't ready to consume. I finally spoke up when we had three containers of dishwasher soap and nowhere to put them.

Want to read something funny. Check out the Bounty oversupply: https://www.bloomberg.com/view/articles/2014-09-12/how-to-st...

They email you before sending you stuff, just skip the delivery if you don't want it.

Personally I set everything to six months and then bring it forward when I need some.

Even if there are some small savings, at some point it's just less mental energy to place an order when you need something, which takes? I dunno 2 minutes.

The only thing that makes any sense for me to get on subscription is cat food. Cat has prescription food, so it doesn't change in price, and he eats the same amount every day.

Not from Amazon though, I get autoshipped from Chewy.com.

Pretty much every other thing one would subscribe to I'm going to buy when its on sale. I'm sure Amazon predicting my needs would be at a premium cost.

> "Online grocery is failing"

I'm sorry to hear that, because Amazon Fresh is the greatest thing to happen to my family's grocery shopping since we became a family. Seriously, we'll the $40 dash wand to add stuff to our grocery list through the week, then I'll sit down for 10 minutes and add some stuff from my wife's meal planning, then boom - next day (or two, depending on when we want it) we have our groceries.

Never gotten the moldy strawberries mentioned in the article, and with a few odd exceptions, everything is cheaper than both the grocery store and target, which saves even more time With 2 store trips a thing of the past.

Physical supermarkets can still be really terrible. It always seems to take me over an hour to do my grocery shopping.

My idea to bring the industry into the 21st century would be take a similar route to Blue Apron et al, where all the ingredients are combined into a single package. The difference is that the work of preparation would be distributed to local restaurants looking to supplement their income, and people would just pick up their uncooked packages there. That would keep the cost down and scale well, while still being convenient for customers and allow them to cook new, interesting meals everyday.

I've thought about this in similar ways. The reason I don't use Blue Apron is because it's pricey--$10/meal when you're cooking at home isn't very affordable unless you're a lot of disposable income.

But I understand why it's expensive. Each box of ingredients must be shipped with multiple cooling packs to keep it from spoiling, and shipping to each individual's doorstep also adds costs.

Imagine if grocery stores offered a similar Blue Apron like service, where they came up with good, reasonably healthy recipes, and packaged all the ingredients (which they already have in store) in the appropriate amounts into a box with recipes and instructions, just like Blue Apron, and you could pick up the box at the grocery store. They could easily offer this for less than half the cost of Blue Apron, and the value proposition (at least to me) would be so big (no meal planning, no wandering around a the grocery store for an hour, no risk of buying too much stuff that I then goes bad) that'd be a no-brainer to use it.

At Safeway, this is referred to as, "The Deli".

i find it pricy too, I cant imagine what someone in a lower cost of living area(than sf, so everywhere) thinks of the price. Packaging waste is a big complaint my friends have, easier to swap out reusable packages if its at a store. And I have to go to the store anyway for perishables(eggs/milk/etc), so blue apron doesnt even save a trip to the store. id buy this too

"Physical supermarkets can still be really terrible. It always seems to take me over an hour to do my grocery shopping."

An accident, this is not.

My local grocery store I buy online. Pull up. They put the items in my car. Cost $5 for the service. And this is a flyover state smallish size chain not a SF giant grocery store.

It's cool that they are trying to innovate here, but it seems like a weird area to focus on.

The high growth areas in grocery are things like prepared foods and produce. Owning the middle of the store to try to out-Walmart Walmart seems like a low-value proposition.

I've been using Amazon Fresh for a few months. The delivery aspect is awesome, but the rest of the business is pretty questionable. They cannot keep anything in stock, and I'm basically getting a week of groceries free every month because they cannot figure out that dropping a cantaloupe on top of a bag of Doritos and loaf of bread is a bad move.

"I'm basically getting a week of groceries free every month"

Many people would get this kind of screwup one time, and then they would stop ordering.

The story said disappointed customers would return moldy strawberries. That's if Amazon was lucky. Scores more would simply never shop again.

I stopped ordering groceries online after a few small mishaps. This service saves me no time if I have to deal with screwups.

Their responsiveness convinced us to try a few more times. The utility is amazing and still saves more time.

>it seems like a weird area to focus on

i see it as you the consumer are the focus, not the products you buy.

Knowing you as a consumer is the goal to be able to serve your every purchase. I'm really surprised Amazon doesn't have a branded credit card that offers unbeatable rewards, thereby seeing all user transactions.

They do have a branded credit card. You get 5% back on all Amazon purchases and other Amazon benefits. It's a visa I think provided through chase.

yes, but that's far from attractive. i calculated it out for my family of 4 and based on my amazon spending (maybe mid to slightly above avg) 5% on amazon doesn't beat the 2% i get on all transactions. If they want to be top of wallet (and visibility into my other spending) they need to have better than 2% on the non-amazon transactions.

They figure that if you already get groceries from them they can eliminate all their other shipping costs eventually. Just throw whatever it is your buying on top of your grocery cart. It's an infrastructure play.

>I've been using Amazon Fresh for a few months.

This is an artifact of living in Silicon Valley bubble. The rest of the country don't live this way.

I live in Albany, NY. Definately not in a bubble.

They have an arrangement with USPS to deliver groceries. The service itself is fantastic. It's just that they are effectively attaching $20 to each order in different costs and have trouble managing the packing operation.

It's great for us because they deliver early and it reduces our grocery trips.

Curious? Do you have an online grocery pick-up nearby. Like Walmart or Wegmans or whatever?

I think there is a race: Pick up or delivery. Both win. If you try pick up at the store it becomes SO easy. And delivery also is easy...

I know from my job: Amazon Fresh is addictive. It is probably the worse type of thing to deliver for delivery people.

Yet week after week the same people get Fresh. And week after week we all say the same thing. "You lazy (expletive). You don't work. You are retired. How fregging lazy are you!!!!! Get off the couch and go to the store yourselves. "

You sound like a judgmental buffoon. Fresh deliveries can be a huge money and time saver, and a literal sanity saver for a family of 5 with a newborn baby.

Look, I can out together a fresh order in about the same anmiunt of town to takes to write up a shopping list. If I avoid ordering from a handful of odd exceptions, it will be cheaper than a trip to the grocery store, and it is guaranteed to not screw up my baby's nap time. Now tell me again why am I a lazy (expletive)? Because it sounds to me like I'm just using the best option available to me.

I am simply writing the words of the people who deliver the on-line goods.

EDIT: My point was that Fresh is addictive. Not the words I hear each day. Amazon Prime is addictive. And Fresh is too. There are some real quality problems Fresh has to solve w.r.t. delivery. They have to match their parcel perfection where virtially never the contents are damaged (their cardboard is outstanding). But those green 'things' simply rip, tear, turn over, and are expected to be reused. Once people start Fresh they seem to keep it going, from what I have seen.

Standing in our office each day the conversation is NOT about the convenience whatsoever. I toned down the language, in fact.

When a person gets a roll of paper towels or a case of soda or diapers it is the same thing: Or a car seat or a snow blower or dog food (especially dog food) anything that used to be picked up at a store. Nobody says, "Wow, look at this great service we provide our patrons. I am so glad we deliver things they use to buy at Walmart." No way. If you think that you have never been in a delivery job for your entire life.

We don't get paid any more to delivery the new on-line goods. Not one cent more. Fresh has some additional requirements that make them a really awful delivery.

I would not call you lazy, but 75% or more of my office would. Actually I have never heard one person ever say a positive thing about delivering stuff people can get themselves at a store.

If you think your delivery person (USP, USPS, FEDEX Ground) is ambivalent then think again. Perhaps they are pleased there is more business, but they also deserve to earn more for the increase in parcel delivery.

I speak from an insiders view.

Oh - and no carrier will admit this because it may impact their holiday tip.

At some pt I have to wonder, just because you can do something does that mean you should? I don't really look forward to a future where Amazon is involved in every business possible. Especially if it's Weyland-Yutani-esque and involved in cave exploration.

Oh come on. Weyland-Yutani? It's not like Jeff Bezos has his own space program or something.

Is Amazon that much different from the Chinese state-owned or heavily-state-influenced behemoths? Cost has to be driven down somehow if several billion people are to live on a planet without straining its ecosystem past a breaking point.

All the facial recognition stuff is extremely creepy. Who could think the internet version of privacy is a model for real life?

surprised they don't operate the stores so as to sell other amazon items via kiosk or for pickup. similar to how grocery stores have pharmacies

I buy a lot on amazon, but groceries? I can't see it happening. I really don't want counterfeit Oreos.

two black poker chips stuck together with elmers glue

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