Amazon’s Grocery Push Keeps Stumbling After Whole Foods Purchase
bloomberg.com
bloomberg.com
1. I can't see the produce/meat/seafood and pick the pieces I want. They aren't all the same, so this matters.
2. I can't get beer or wine delivered, and if I need to go to the grocery store to buy it, I might as well buy all my other groceries while I'm there.
#1 is probably not solvable. #2 is solvable but the US has 50 different state liquor law regimes, so it's a bit of a challenge.
So I'm not really surprised that Amazon isn't doing that much better than the others. Amazon is good at delivering things, but groceries aren't good things to deliver compared to the other stuff Amazon sells. Whole Foods in particular caters to shoppers who care about the quality of their meat and produce and want to examine it before they buy.
#2 - I can get beer/wine/liquor delivered where I live (Texas) but honestly I can't say that I've ever been in such a crunch where I need to get it delivered. And besides, I do enjoy asking my local Specs' employee recommendations on new beer/wine that I haven't tried that I just can't get with any delivery service.
WRT alcohol, I personally usually shop for that stuff at a specialty store like Ben's or Total Wine. I realize other people have different shopping habits, but I would have to make a special trip for groceries separate from my alcohol trip, and I appreciate that delivery helps me save a trip.
Grocery delivery seemed really slick at first but after the 5th time receiving an order that is missing a critical item, the novelty (and the time savings/convenience/etc) wears off.
In Poland I had similar experience, and there's also an option "call me", when the person completing my order will tell me what the issue is and let me decide.
I realize, however, that the approach might not scale, especially when the phone call is required.
On the other hand if you go high-automation you'll have more accurate inventory and the situation should improve.
Missing either of those items is a deal breaker when you're planning for specific meals or dishes you plan to bring to an event.
Honestly, alcohol is one of the better use cases of Prime Now, since it's always a bummer to have someone get alcohol when it runs out at a party.
What I believe is an EU based VC funded startup, HelloFresh, delivers boxes with recipes + the necessary ingredients to your home. We've been a customer for a while, and everything they send is extremely fresh. Their fish is fresher and better than anything I've been able to buy in my city (not by the sea), including specialized fish shops.
They're definitely not cheap, but they've proven that "I can't see what produce I get" is not a problem to customers if the quality is both consistent and extremely high. For all the criticism they've been getting in here in the Netherlands, their fast-moving consumer goods logistics is spectacular.
Having a more involved mechanism for cancellation than sign up is one of more nefarious "dark patterns" which I cannot stand.
If these places could lower shipping costs somehow & get their prices down a bit while keeping quality high, I would gladly order more. I'm amazed places like Walmart, Target & large grocers haven't dominated this market with similar boxes you can pick up at a store or have delivered to your house.
Note that I said nothing about their service, the tech, the price, the amount, etc. That's all pretty shitty IMO.
That may be true but I could equally well argue that, because Whole Foods tends to have higher and more consistent quality than many other chains, a random pick from the product department or meat counter is likely to result in something I'm fine with. At least that's my impression though I don't shop at Whole Foods with any great regularity.
I think it depends on the region and the options available.
When I lived in a city where Peapod delivery was available, I had no qualms about having meat or vegetables delivered. It really did a great job with that.
Now I live in a place where the options are Amazon/Whole Foods, WalMart, Shipt, and a few others, and they're not very good at picking the best fresh products.
I think the difference is that Peapod doesn't have stores, so the "shoppers" can pick from an entire warehouse of produce. So if a head of broccoli looks "off," there are far more alternatives than someone "shopping" from an individual store's selection.
My solution is to have non-perishables delivered every two or three weeks, and perishables I pick up on the way home from work. It still saves a ton of time not having to do a full shopping run.
#2 is solvable but the US has 50 different state liquor law regimes, so it's a bit of a challenge.
More than that. In some states, it's county to county, or even town to town.
This is the experience I've had with freshdirect. But I thought peapod actually was shopped from individual Stop & Shops?
My company enables direct to consumer beer and cider delivery. We mapped out the laws at the zip code level to avoid the legal issues and it works well.
The hard part is convincing the producers and consumers that it is even something they can do. And that shipping if actually worth it. Amazon has convinced the world that shopping is free.
It delivers alcohol no problem. You still can't pick your produce/meat/seafood but because of how goodeggs sources we've never had a single problem with what we get delivered, and we're also very picky about those things.
I'm not affiliated with goodeggs in any way...just a passionate fan.
If you try it, you may be pleasantly surprised. If you don't want to, well, no skin off my nose. I don't own any stock.
I think it varies by state law.
The real problem with that is Goodhart's Law. If you measure for visual appearance, you'll start targeting visual appearance, and the pressures which led suppliers and farmers to value large but flavorless product will only get worse.
The best solution for consumers is a simple weight measurement, and a focus on speeding up logistics to keep the product as fresh as possible. Amazon is uniquely situated to win the logistics game, but it'll take time.
A picture would probably go 80% of the way there for most folks.
If you're going to a butcher, you should expect 4 star meat since you're paying 4 star prices. A butcher that sells questionable product probably won't be around for too long.
Whereas the chicken breast on special at the local Whole Foods may look fine but have a dodgy smell indicating that it's not as fresh as it may seem. Your nose will let you know if there's a lot of e. coli growing on that chicken.[0]
And no, everything on the shelf is not uniform. Watch how people buy fresh produce. Blemished produce gets put back.
[0]http://www.greatlakesbiotech.org/news/2017/6/4/the-smell-of-...
Me neither.
So, pick your meat yourself based off of old photos of the meat?
Produce is already sorted by at the processor for auxiliary products such as sauces and processed goods where the consumer would never see them.
The stuff reaching store shelves is already supposed to be premium. Then you have a company like Imperfect Produce will take whatever is at the bottom of that group and deliver it to you for about the same price as going to the grocer but alongside an anti food waste social good marketing angle, which I think mostly works on the fact that all that produce has already been judged to be good and you can’t tell so you might as well alleviate some consumer guilt.
Also how much market pricing power could put on a $0.50 cucumber. We’re literally talking nickels between categories.
What you’re really missing out on is that picking out food activates some finely tuned gatherer senses that people find both enjoyable in the moment and when cooking/eating the food; “I bought some great avacados this morning”.
Like maybe person A wants really nice looking stuff, but eats it infrequently so isn't bothered by getting items that aren't quite ripe yet, whereas person B may not be as "picky" but it has to be peak ripeness.
I found that my delivered groceries were always more expensive than if I were able to pick out the items myself.
Obviously it will be different for everyone... but I personally dont like delivery for that reason.
Further, if I were amazon owning whole foods -- what I would focus on is minimally packaged items as a product line.
What would the impact to the overall cost of foods be if there were no need to flashy marketing/branding.
Vegetables are cheap in part because we don't need a ton of packaging and marketing around them.
> What would the impact to the overall cost of foods be if there were no need to flashy marketing/branding.
Only a matter of time until the 365 line is rebranded as Amazon Basics.
For that matter, the handful of times I've ordered from Prime Now my order has been messed up in one way or another. Amazon keeps pushing the $5 credits for delayed delivery of their main market deliveries, no thank you.
Craft a delivery order which is specific and identical, then order that from several delivery companies, as well as go in and purchase the order in-store. Rate all the experiences.
Delivery companies need a "silent shopper" -- like how a restaurant will hire people to come in and order and rate the experience.
That assumes the store isn't binning meat and produce. It makes some sense to direct the merely acceptable items to people buying sight-unseen, and reserve the appealing items for those buying in person who can reject lower quality items. The latter group will likely pass over the merely acceptable, resulting in more unsold food waste and worse sales.
If they want me to shop online they need to make sure all of the information from the package is listed on the page.
We’re still at the early adopter phase of online grocery, but I’d be very surprised if this isn’t mainstream in a decade. Which is why I’d guess all major players take it seriously (from Walmart curbside to Kroger Clicklist).
Disclaimer: I work for a company associated with the online grocery space (though we aren’t online grocers). But I work here because I think it’s a solvable problem with tremendous upside to actually add value and convenience to people’s lives. Who wants to go to a mall to buy clothes these days?...
The whole experience reeked of sucking up data about a person, and really made me never want to go back.
I don't really go out of my way to shop there any more...
Back in the day we used to hold "store card swapping parties" where you'd bring your store card, drop it in the pile, and then everyone randomly picks a new one. Do it about once a month.
Now of course the store cards are tied to apps that give you coupons on things you buy, so it's more in your interest not to mess with them.
Much harder to do that with phone apps, alas.
Discussion of this: https://www.creditcards.com/credit-card-news/retailer-data-t...
I mentioned it in another comment, but the combination of PCI compliance and the use of chip+pin make it difficult for retailors to use credit cards to track an individual, but the credit card company can.
However, if the retailer then goes back and purchases the data from the credit card company, I agree, they will know who "Customer #12345" is with regards to the person.
Recently Amazon realized how badly they fucked up cheese sales, and reverted back to the old system. Most people I know will only buy good cheese if it's >30% discounted. For a couple months, Amazon decided to scrap big sales in favor of 1-5% off ones. So far as I can tell, that test was a complete failure, and we're back to being able to have good cheese at good prices.
It's a far worse store. Lucky for Amazon, they have a few years before a competitor will emerge to bring back a legitimate luxury shopping experience back to my demographic. But Eataly or someone of that nature will shift their business model a little to fill the void eventually.
I find Trader Joe's, New Seasons, and local coops to be much more affordable and better quality of varying degrees for each.
Not sure why anyone shops at Whole Foods in your area, but not every area is your area.
That's also a feature of TJ (and Costco, for that matter).
1. Whole Foods sucks. They have poor quality items (especially produce), are often out of stock of common things, they don't have name brand items, and the prices aren't great.
2. Amazon's delivery service sucks. The website and app are terrible compared to Instacart, and only deliver from Whole Foods or Amazon.
(I am not in love with Instacart either, its almost impossible to get a grocery delivery same-day if you decide to put in an order after 4pm in SF. Sometimes you'll fill up your cart because it says "2 hour delivery" and by the time you're done it says "Tomorrow Morning".)
I tend to go to A.J.'s or Whole Foods when I want more exotic items fresh... and only then.
I haven't been to Whole Foods much in the last few
years, but their produce used to be at least as good as
other supermarkets, and usually better. What are you
comparing it to? Have you noticed the quality go down
over time, or have you always had issues with the
produce?
As someone who shops at both Kroger and WF, there is a big difference in some produce items (WF is better). There is most definitely a difference in their meat/fish (WF is better), it's no competition.
The overall experience between the two stores is one of the biggest reasons why I go to WF. My fiance and I will sit at the bar and drink a glass of wine before shopping. It's a relatively laid back bar where you don't have to tip and the prices are cheap. On some days it's $4 for a glass. Then we will grab a shopping cart (brand new at the WF we go to) and stroll around well-lit and spacious isles to get everything we need. No one is bumping into us, hardly anyone is in our way. All of the produce/meat/cheese stations always have friendly staff ready to help with rarely a long line. Checking out can be hit or miss but we rarely wait longer than 10 minutes from start of checkout to walking out the door. The experience really is excellent compared to Kroger.
At Kroger everyone working there seems miserable, no one is friendly, the stations are hit-or-miss on whether someone will be available to help. I wouldn't want to spend an extra minute at Kroger, while I can and regularly do take my time at WF because of how nice it is to be there.
Mind you, these two stores I go to are within a half mile of each other. They are in the same "neighborhood" so-to-speak.
So when I read things like this I'm very confused. My guess is that someone's WF is different than the one I go to.
The produce is significantly better at the Ralphs. More types of produce, more produce in stock, and cheaper prices. The only reason to even go to WF for produce is for the occasional odd-ball seasonal specialty fruit that Ralphs doesn't carry.
The meat section isn't even remotely comparable. Ralphs>Whole Foods. More types of meat, more cuts, better quality, and lower prices, for both prepackaged meat and butchered meat. Ralphs even has better connections to meat suppliers if you need a custom order. The difference is so large that it would be laughable to compare the two if not for the fact that other WFs in the LA area (like Venice) actually seem to have passable meat sections.
The bar at the Ralphs is smaller, and they have no meaningful selection to speak of (4 beers, 2 types of wine), but they're dirt cheap--the cheapest you can get in the area, and easily about 1/2 the price for the same-size booze at WF.
And I've never waited 10 minutes to pay at Ralphs. What sort of bullshit is that? At the Ralphs, the manager personally apologizes to people if they have to wait more than 5 minutes in line and mans a checkout himself/herself if necessary.
Ralph's is owned by Kroger, but it is not the same as a normal Kroger store. That would be like saying HEB's Central Market is comparable to a normal HEB store. The two things are wildly different as far as levels of quality are concerned.
I doubt there is a Ralph's in GP's area. Nobody is claiming that Whole Foods is the best grocery in the nation -- for many people it's just the best in their area.
I'm not sure how I can shop at Whole Foods Shangri-La, but my nearest is on the Upper West Side and it is crowded at all times of day.
I placed my first order and several hours past the end of my scheduled delivery time, my groceries still hadn't arrived. So I canceled the order, canceled Prime Fresh and that was that. Not a good way to win over business from the competition in what is a pretty competitive business in New York.
If my story is representative at all, it's unsurprising that their marketshare has declined, even after a very expensive acquisition.
1. https://www.bloomberg.com/news/articles/2018-12-11/inside-ne...
I stopped using Amazon Fresh after a string of deliveries where entire bags were just missing. Not out of stock, just not in the order. Of course, they refunded me but when buying ingredients to cook something complicated it can totally change your plans.
Their selection would change frequently. Sometimes basic things would be out of stock for weeks, sometimes items would just disappear, even items from common brands.
This is effectively the normal Amazon experience (good with occasional errors) but when applied to food it's somehow considerably worse. I now use a competitor's service; all they do is online grocery deliveries. It's very hard to be all things to all men; sometimes specialisation is a good thing.
As to Amazon and Whole Foods' retail experience, I feel like quality has declined, shortages are more frequent, and using the app's QR code for deals is painful, frustrating, and insufficiently rewarding to bother with it.
It’s only partly to sell things, because their main business is actually smoothing out supply chains. As a customer, I want my supply of things I need or want to not be coupled to other people’s buying timings or supplier timings.
Stores switching to just in time stocking routinely fail at this, because variance is non-zero. This in turn destroys my ability to just go there and buy something, and hence the value the store provided.
I have the same problems at most grocery stores, these days, where routinely things I want are transiently out of stock.
There's also some stores where when an order goes in, an IC shopper just picks up the bag and doesn't do the shopping themselves.
Is the experience of finding food on an phone or computer a tangibly better experience than doing it in person? Is having to plan in advance for what you want and the requirement of being home around the time of delivery actually a better experience than hopping in the car and driving 5-ish minutes and selecting the products in person? Do enough people trust someone else to select their produce? For some people I would say this is true. But is there a large enough subset of US consumers to justify the scale required for grocery delivery to be a viable mainstream service? Or is this more of a niche product?
I feel like this is different from other consumer goods, like electronics, where things like price comparison, selection, reviews, and research play a much larger role in the shopping experience and it is a mistake to assume that grocery is an analog to other consumer goods.
[1] https://www.ers.usda.gov/amber-waves/2015/august/most-us-hou...
From the cited article:
"The distance to the nearest supermarket or supercenter for the average U.S. household was 2.14 miles"
>> selecting the products in person?
How long does this takes ? And how is the experience if you're a busy mom with small children ?
So yes. Maybe you're right. Maybe large-scale grocery delivery won't happen.
But in-store pickup ? There's decent likelihood it would become a large scale service.
And than, that would be a great time to scale a delivery business.
High consumer density for pickup, leading to high delivery density with cheap prices, guarantees lots of online orders and that high delivery density.
Fool me once, shame on you...
All this is to say I think grocery delivery is the holy grail of supply chain challenges. There is little tolerance for inefficiency at any step between farm and table. It's easy to spot when you're out of tolerance, but difficult to control for.
I think we're still in the early days of this space. It reminds me of the early 2000s when cord cutting was possible, but not common. However, once it really takes off it'll change everything.
I've never been to a physical Whole Foods so I can't say if their quality has gone down as a result of this. My local grocer has a delivery service but I am too entrenched in Amazon to try it out.
As for the delivery service, I have had a love-hate relationship with Amazon Fresh as well as Prime Now WF delivery in the past. Having analyzed the situation a little I realize that my satisfaction with their service is a reflection of my state of mind. Outside of some blatant delivery issues such as the leaving my groceries on a busy arterial in the vicinity of my home (yes, actually happened), I have been unhappy when there wasn't an immediate need for the groceries. This is when I tend to notice issues such as price discrepancies, or poorly substituted items, etc. I have been much happier when there is a burning need, such as being exceptionally busy and not having time to make a grocery run that week. That's when the smaller issues tend to go unnoticed.
I am glad to have their delivery service available. Once a month or so I find things to be quite chaotic, and find it quite easy to launch an app on my phone and get groceries a few hours later. Instacart is similarly convenient, but none of the other stores I have tried (Safeway, Costco, etc.) come even close. They all suck sometimes, but the WF/Amazon experience seems to sucks less.
Somewhat related, if you have friends going through a major life event such as having a baby, receiving the gift of free grocery delivery will make them very happy.
And on top of that, the author has the nerve to close the article with a disclaimer that says he wrote the article with the assistance of another person.
My personal concerns with grocery delivery and automation in general is that the automation of my boring daily tasks might not free up more leisure time, but more time to spend working.
One was a positive experience, but their prices are a bit high, and they charge $5 for the service on top of it. If I do most of my groceries from them, it'll affect my wallet too much.
The other was Walmart. Groceries are cheap, but I never got an order without a problem. Usually, they did not have an item (as in the store never carried it) - why can't the web site tell me that this particular store never has this item?
Now there's a fairly well priced grocery store I shop at. I'd happily pay them $5 each time for this service, but they don't offer it.
We buy most of our meat and produce from another local grocery store, and now we just order the odds and ends from whole foods. This saves us a bunch of time so we don't have to make two stops.
Amazon deserves a lot of the blame, though, as they have such confusing branding: Amazon Fresh (only works on web and phone); Amazon Prime Now (phone app), Amazon Prime Pantry (hard to use), plus the amazon dash wand which confusingly may place objects into your Fresh cart, or on a shopping list you can find in the regular Amazon app, or in a list only available with the Alexa app. I don't know what's going on with this supposedly customer-focused company.
In any case: I ditched my cars last year so mostly need delivery. The cheapest of the walking distance grocery stores is Whole Foods, and since I had so many problems with Instacart I've pretty much adopted Amazon Fresh. It actually works OK as long as you don't mind waiting until the next day (same day slots are rarely available in Palo Alto). But I get veggies and meat delivered with different services; Amazon's prices aren't that great.
Same thing that happens to every large company: the left hand does not know what the right hand is doing. Prime Now and Fresh are separate fiefdoms. Prime Pantry is a vassal of the traditional retail fiefdom. (The traditional retail fiefdom also has a "Subscribe and Save" feature, which you can discover by shopping for something like cat food.)
In Amazon's case, it might not even be a bad idea not to have a single, overarching, top-down strategy. Nobody has solved this business yet, and it's faster to try multiple things concurrently than consecutively.
I had a delivery person call me and need street by street instructions on how to reach my place. I spent 20 minutes guiding them in the little bit of Spanish I remember from high school.
Obviously, produce was hit and miss. Mostly miss. The dumbest thing was they consistently packed produce in with cans.
Selection was terrible, and continued to get worse over time (including after the Whole Foods acquisition, which was weird).
Minimum order kept going up. Which was a double sucker punch with the reduced selection. Hard to fill the cart went they have hardly anything and keep raising the minimum.
And at some point they started sneaking in a default tip. They'd just tack on a tip without prompting you. You could change it ... if you noticed it was there (in small font mixed in with your checkout list).
And no app support.
Fresh is probably one of Amazon's most poorly executed services.
we also use shipt when there's no time(or its too cold) to go to the store.
The deli guy literally was talking about how horrible it was there...
The first and most obvious thing, which Amazon is at least superficially best-equipped to handle, is the fact that existing grocery stores make for really shitty fulfillment centers. Grocery delivery services that literally send someone to the grocery store for you end up with probably even worse results than you would get just by hiring a part-time personal assistant and telling them to get you groceries. If you did that, at least you'd cut out the middleman, and the person would have better incentives to not fuck up your order in particular.
You can lay out a fulfillment center so that products can be picked and orders assembled efficiently and unambiguously. This doesn't match how a grocery store is laid out. A grocery store wants the shopper to be able to predict where to find a product, or at least a product category. Every single product is stocked directly next to every other product it possibly be confused for, usually all smushed up together or even hidden behind each other. Also, random members of the public walk through the shelves and throw them into chaos. Even the flow of going through the grocery store is designed for marketing return rather than efficiency.
The bigger part is probably that groceries are already a pretty terrible business. Whole foods in general--produce, meat, even stuff like eggs--are often already loss-leaders, even if you're selling them in person to a customer who can inspect the product. Grocery stores use these to lure customers and then sell them much more profitable packaged goods, and it works out because competition for retail space is fierce and demand for low-margin groceries can be a competitive advantage.
Remove that constraint and the grocery business no longer makes sense because you can cherry-pick the best parts of the business and build a focused delivery business. Packaged pantry goods: Amazon. Refrigerated or frozen packaged foods on demand: GoPuff. Even if you want to deliver fresh whole foods, you can just restrict the number of unique ingredients, hire a chef to turn the Cartesian product of those ingredients into a list of decent recipes, sell packaged recipes, and that's HelloFresh.
Bit by bit, other business models are going to eat away at everything that isn't a loss-leader, and you're not left with any viable business in delivering whatever is left. Even the cash-rich-time-poor segment is better served by some variant of the HelloFresh model, assuming they're too time-poor to shop for groceries but not too time-poor to cook (which is kind of a weird assumption, although perhaps a pre-prepared "just throw into a crock pot" meal delivery service would be viable).