Instacart is slashing prices as the war against Amazon heats up
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Hitherto there weren't many competitors that could match, or even compete with, Amazon's stock and delivery speed. Walmart is close, as is Costco, but Amazon is where it's at.
For quite some time Prime was... Not a good value for us. Then we got Video and Music, to a certain extent, and it's a fair value if the content you want is there.
But the problem, and why myself and many peers have cancelled prime and started shopping elsewhere, is that the basis of trust in the quality of their stock has fallen away completely. The amount of garbage with four stars or more is scandalous, and the likelihood of receiving a knock off product is too high. Opening a box to find a product similar to but different from what you intended to buy is all too common.
Amazon, get your shit together before you irreparably harm your brand.
I've stopped buying anything from Amazon about two years ago. When you start to price compare, you realise how bad of a deal Amazon has become real quick. For the majority of the stuff I was buying, Amazon prime was marginally more expensive. For a minority of them, it was substantially (30%+) more expensive, and I had no idea.
Agreed, but I'm currently trying to get a close friend to realize that Amazon can have terrible pricing. But I think the convenience factor is difficult to overcome.
Before Amazon, you had to just "know" which venue to buy each particular product. Now you can go to one place for practically anything online.
For every purchase (online or not), I do some mental calculation of "My estimate of what this costs to make is X", and I wouldn't pay more than X + Y%.
I also think "Which venue would have the best price for this?". For small junk, I would do some complicated Ebay searches and buy it for $4 from China. For larger things, I would do some complicated analysis of supply vs. demand for a used good and maybe check local classified ads. For other stuff, I'd go to Costco, or some specialized store.
I also have to do an analysis of how much I'd be willing to save to get it in 1 week or 1 month instead of tomorrow.
But most people just don't think that much. Relatively guaranteed shipping of 1-2 days and all from one place is enough for people that don't do this kind of thinking for purchases.
Costco doesn't always have the best pricing, but you know that you'll never overpay too much, it's always quality, and they'll take a return if you're willing to trade some of your life to do it.
I also couldn't disagree with you more on how bad a deal Amazon is. Yes, you pay a premium on many things. On the other hand, that premium pays for itself 100+ times over due to the tremendous amount of time and frustration I save by virtue of not having to physically go somewhere to do the vast majority of my shopping. Furthermore, I also find huge value in being able to make careful, informed decisions about what I buy without time-pressure and other annoyances imposed by the physical world. I hate shopping at most stores and when I'm there the strong desire to leave as soon as I can tends to take precedence over making the smartest purchase. Overall I would say using Amazon for most of my shopping has greatly improved my quality of life due to these factors.
Prime shipping has been annoying to my residence because I live in Seattle and they use contractors which often just fuck things up for same-day delivery, but it's never longer than 2 days. Almost no other site can match that speed and convenience, which is the real reason any of use Prime.
If I saw the same 30% overcharging phenomenon people keep talking about on HN, I'd probably consider switching. But it is well under 5% and probably ~0%, honestly, and the value of my time and efficiency of shopping online is worth quite a bit to me.
I'm not saying people don't have these experiences, but I don't. And even if I did for like 5% or something, the shopping experience on Amazon is 10x better than Walmart.com or Target.com (where it's more like 100x), and that isn't worth nothing. It's like patio11 insisting that basis points fees aren't worth arguing over on Stripe when you are infinitely more productive using Stripe's developer kit vs. Authorize.net or any other terrible gateway, and people everywhere on HN claim how expensive Stripe is and how you can save money and don't factor in even a very conservative estimate on labor hours for a C-level exec or a manager in a company.
It doesn't take much time saved or annoyances avoided for a high-level executive to make a small price difference be completely irrelevant. And that's what Amazon has mostly done.
Out of hundreds of items, I've never once received anything that seemed dodgy.
On the rare occasions where I've received a broken/defective product, I've had no reason to believe it wasn't a genuine product, and Amazon have been a joy to deal with to send it back. In fact, the ease of returns, and their excellent customer service, are the main reasons I buy so many items from Amazon and not elsewhere.
Hence my comment about it being a serious problem: the incidence doesn't have to be very high to cause a significant dent in confidence and changes in behaviour.
I recently had to return a large broken-on-delivery item to Amazon. They required me to buy and apply packaging ( they had just stuck a postage label on the item ) and pay £35 up front for return shipping.
Two weeks later they refunded the shipping cost but not that for packaging or my own time, including carrying it on my shoulder to the post office.
It was sold by and fulfilled by Amazon, not a vendor. I get better customer service from eBay!
Where are you finding ratings that are more accurate than Amazon's?
Whenever I've looked at competing sites, of those few that actually have ratings at all, the products are rated by maybe 5 people total, whereas on Amazon it's sometimes hundreds or thousands. So are those 5 people really going to provide a more representative rating than the hundreds or thousands that rate Amazon products?
That's not to say that ratings are everything. They're just a start. You have to dig deeper and take a close look at both the positive and negative reviews to know what you're getting yourself in to.
Reviews at most competitors' sites lag behind Amazon -- with the sole exception, to my knowledge, of NewEgg, which actually has a lot of both ratings and reviews, and both are useful.
This was pretty much my only qualm. I'm heading back to Instacart. Pound-for-pound, it was a better product. More personal service, better shoppers and they were slowly getting better at keeping the inventory databases more up-to-date.
On that last point, they have a tough fight as Amazon integrates deeply with Whole Foods. It really breaks your product if a significant percentage of the groceries you order isn't actually in stock.
I have Amazon Prime and still paid for Instacart.
But will this survive with price slashes? Quality almost never stays the same (or improves) when you get into a price war.
http://www.slate.com/blogs/future_tense/2017/11/20/workers_a...
Instacart will often allow me to order more of something than is in stock, because they have no real concept of "in stock". For any order of more than 5-6 types of items, chances a very good that something will be missing, so you can't rely on them for tonight's dinner -- instead, you have to order the night before so that you have time to stop by the store yourself on the way home from work the night you want to make the meal requiring all of those ingredients, to get the thing(s) they allowed you to select but "couldn't find".
I have placed orders through Instacart which didn't happen at all because they "couldn't find" anything in the order and it was all do-not-replace.
I have placed an order through Instacart mid-day which was shopped, and then delayed until my SO finally called them, whereupon she was told it would be the next morning, but not to worry, everything had already been shopped, and had been put in temperature controlled holding! But then the next day most of the order was refunded before a few things were delivered, because the shopper "couldn't find them".
Instacart will commonly put frozen food, bags of chips, dish soap, and 2L sodas in the same bag together, and then roll the dice on whether things are crushed, too warm, or otherwise came to ruin.
I may have a lot of anger built up at Instacart.
Although I've also become increasingly disgruntled with Amazon, at least I was already signed up with Prime, so I decided a couple weeks ago to try PrimeNow. I don't think I've used Instacart since.
I cannot stress how different the experience was:
When ordering from Amazon (not the individual grocers), PrimeNow wouldn't let me order more 2L sodas of my usual brand/flavor than were in stock.
When I ordered something crushable, it was in a separate bag, and uncrushed.
When I ordered something frozen, they put an icepack in with it.
Instacart slashing prices is laughable. Price is not their main problem. I would gladly pay twice as much, if only I could count on them, but as it is, it's possible now that I'll never again use Instacart.
Instacart has been generally top notch in their logistics and customer service. Small issues now and then, but rectified quickly and pro-actively.
Amazon PrimeNow and their Amazon restaurant delivery has been a total mess. Cancelled orders hours after placing them, unexplained delivery glitches where a courier attempts a delivery and leaves with all the merchandise if we don't answer the door knock immediately, etc.
I'm not shy in letting customer service know when there are problems and even the refund process is a mess - we've had charges refunded 3, 4, 5 times (like I spend $100 and they end up refunding me $300 dollars!). Tried to explain to Amazon and get in to crazy unintelligible email threads with offshore service centers.
Finally just gave up on the whole thing with them. Will try again in a couple years and see if things have improved.
It speaks to how difficult logistics like this truly is and how difficult it is to not only scale the service but scale the quality consistently across very different geographic regions working with very different grocers, etc.
Was completely turned off and never went back.
Did Instacart for a while, but Shipt (Target) entered our market and I’ve been really happy with them.
The dirty little secret of grocery delivery is that most grocers don't have an inventory system that tells them how many units of each item are on hand.
Most grocers physically count their inventory once a month or once a quarter, and they don't keep a running balance as products are received and sold.
That means they can't tell Instacart how much of each item is on hand, and they can't remove items from Instacart when they sell out.
So you can easily have a 15% to 20% no-fill rate on online orders, especially on lower volume items that don't have as much visibility or stock on hand.
It does seem plausible that they do not have an API for Instacart to interface with, though.
A 20% no-fill rate (which seems about right in my experience in NYC) is far too high for most use cases, and so either they'll have to figure out something to get accurate counts, or it's a forced win for someone with an integrated warehouse.
Someone steals a box from the shelf, another takes a box and puts it back behind the frosted flakes. Now the inventory is showing 20 boxes, but there are only 19 in the store, and one of those 19 is somewhere hiding somewhere.
These are the easy cases. Consider shirts. A shirt can come in different sizes or colors but they all have the same upc number. We have 20 shirts according to inventory, no need to order more right? The only problem is that all the mediums and larges sold out and we only have xxls and xsms. Also items can come in packs, but are sold individually. There can be special displays, so some of the items are moved from their old location to a new location. On and on with edge cases and exceptions.
The parent comment on most stores have no idea is closer to the reality than stores know because they know what came in on the trucks.
What are some potential solutions?
A. Worker methods.
1. Tell workers to scan (count) the inventory more often. 2. Do some gamification to actually get workers to scan more often. Not really sure about this, could easily have perverse incentives or turn it into some dystopia.
B. Non worker methods. 1. estimate inventory based on sales data and restocking data. 2. Rank the sections by profit to prioritize high profit sections.
I don't think my ideas are particularly great. Besides, nobody listens to me, I'm just a lowly programmer. I just do what they tell me ;)
Grocery stores get less than half their assortment from their own warehouses, with the majority delivered direct to store from hundreds of vendors.
The large chains have some integration with their largest vendors like Coca Cola and Frito Lay, but usually this is just for item authorization and invoicing, not for perpetual inventory.
Spoiled and damaged product is often thrown away without recording it. Cashiers scan 12 units of one UPC instead of scanning each flavor of baby food or Gatorade separately. Scanning accuracy is even worse with self-checkout.
Reordering is typically done by looking for empty spaces on the shelf, since they don't have the perpetual inventory to do automated replenishment.
It's a real shitshow from a data quality standpoint, which is why the no-fill rate is so high with online orders.
> it's a forced win for someone with an integrated warehouse
Webvan thought so too.
My only gripe is that I’ve occasionally gotten produce that looked OK but was actually end of life, and was already turning the next day - but their refund process was entirely hassle free.
I’ve also tried peapod which, despite being a massive chain grocer, would often send a delivery with a handful of missing items. Less than 10% though.
Is there some obvious reason the same kind of market change didn’t happen in the US?
I think US is uniquely suited to such a thing because of its sheer size. A supermarket company that has not built effectively a parallel supply chain cannot accommodate allowing a guy from New York and a guy from San Francisco to shop using the same stock, especially if perishable, because there is no profitable way to ship something from CA to NY in a few days. That effectively means CA and NY are, so far as groceries go, completely independent markets, and that creates challenges that being a supermarket does not inherently give an advantage in handling.
In contrast, UK or Turkey are countries that are sized small enough that a lorry can cross in a day, given the need. That allows you to act like you have a 'supermarket' in the middle of the country, and you're taking orders by the phone, and sending them to their way. That mental model is much easier to handle for a supermarket chain than doing continental-scale logistics that Amazon is adept at.
So this means market share will probably be smaller in the US than the UK(which was quite low).
So maybe in the UK , that was one of the best growth opportunities for grocers. But in the US, with it's huge size, there we're better, less risky, standard growth opportunities.
So why would a manager risk his career on online groceries in the US ?
I contracted for $LARGE_UK_RETAILER for a while and I can tell you their ability to effectively develop and deliver solutions with a significant technological component is extremely poor nowadays[1]. It's resource hungry, slow, inefficient, and - perhaps surprisingly - not particularly focussed on the customer.
They moved into online shopping early, but they are in no position to develop that value proposition at anything like the kind of speed Amazon can. They've already substantially failed to compete online beyond their core grocery offering, yet still do not see Amazon as an existential threat to that offering - something which always struck me as complacent.
Anecdotally they're not alone: based on accounts from other contractors $OTHER_LARGE_UK_RETAILERS are just as shoddy when it comes to effective value-adding technology delivery.
[1] I can think of one example where this was not the case, but it was far from the norm.
(They’ll raise the prices once they’ve driven out enough competition to assume a dominant position in the sector, of course, but that will come too late to do you any good.)
This is something I don't understand in general. How is dropshipping products from China anything more than scamming the few people who either didn't realize they're dealing with a dropshipper, or aren't aware Aliexpress exists? What actual value those dropshippers provide?
Given how well they are doing, that is not so few people.
> What actual value those dropshippers provide?
Turn that around. What value their collaborators on American side of the border provide them with? The answer is their English and marketing skills.
That makes sense. Thanks.
In Italy you get (from amazon), 2 years warranty on every product (yes I returned a phone that died on me at 1 year and 8 months old, factory problem), prime costs 40 bucks rather than 90 and the product quality is higher because there are various local products on it. The canadian one is very messy, has all the downsides of the u.s. one but none of the benefits (e. g. No family view, wtf).
Still, support is great
I found the proposition fairly attractive, I just wish they added fresh grocery for target.
Does it factor in the 5% whole foods discount you get from being a prime member?