At Amazon scale, though, that approach works.
In short, a distribution centre gives you:
* improved pick efficiency (depending on the level of automation), offset somewhat by maintenance costs and the cost of capital.
* increased delivery/transport costs (stores are generally closer to the customer than the cross dock point / outbase, vehicles are already going to the store for the main delivery)
\ flowing more product through existing retail points reduces waste (expiring products).
* increased property cost (you have to pay for a distribution centre at c£9 per square foot incl rates etc, while in retail the space is more expensive but you are already* renting it).
The one thing a fulfilment centre does give you is better service though. You can hold more range, better track dates/batches so you can give your customers the expiry dates on the website and increase availability.
So the honest answer is that delivery from a central point isn’t a slam dunk, and can definitely work but probably won’t be cheaper.
All this basically sums up to “it depends”!
And does this mean someone will probably build a parcel locker network for groceries?
One of our team members was an alpha tester, and one delivery he got was a pallet of salad cream instead of just one bottle.
I always want a lump / knob / finger / whatever of ginger, and without fail forget that the unit of measure is a kilogram, which would take me months to get through.
However, any retailer with existing stores wants to operate click-and-collect from those, as if you realise you forgot something on your order you'll go into the store.
In the case of a pair of socks which are standardized, they may not care as much to physically pick up stuff.
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I have always thought that the disruption to costco would be an online warehouse, that could gather the customer's preferences ( patterns of buying - and consolidate them and send them to localized centers ). Customers can then pick them up or have them delivered. Discovery will purely be through the web.
People on strict budgets typically also need to stretch that budget as far as they can; they likely can't absorb the markups on each item that pays for the in-store shopper to collect them.
If a shopper wants milk, bread and scented candles, and you don't sell scented candles when your competitor does, they'll go to your competitor for candles and pick up their milk and bread at the same time.
So if you want to get a customer's main weekly shop, you can't cut your range too far.
Of course, there's a space in the market for gas station convenience stores with a smaller range, higher prices, great convenience and no aspiration to get the customer's main weekly shop.
To me these all sound like predecessors to Facebook, Amazon, and Uber
Also : internet wasn't this good. Wasn't this widespread. Did not have the minimum usage levels for such endeavours to pickup.
No. The market size expanded exponentially for each of these opportunities - changing the economics of the business models and making them viable at scale.
The internet was nothing in the 90s. A place for mostly nerds in first world countries.
Today we've connect 4 billion+ humans around the world.
It is an absolutely massive accomplishment that has many many far reaching positive effects that far outweigh the negatives.
Don't let cynicism be your only guide.
Maybe. Labor in China and the Chinese market absorbing inflation also helped.
My expectation is grocery delivery just barely missed the boat, because of import malfeasance crackdowns since April that is affecting everything.
Mobile phones and data didn’t hurt.
I still want an internet butler.
Amazon ended up owning and operating Webvan.com.[1] The people who developed Webvan went on to develop Amazon Fresh.[2] The founder of Kiva Robotics, which was acquired by Amazon, was from Webvan. Amazon's grocery business is directly descended from Webvan.
[1] https://web.archive.org/web/20160303194049/http://www.webvan...
[2] https://www.reuters.com/article/net-us-amazon-webvan-idUSBRE...
Webvan and Kozmo.com were also brilliant.
TJs apparently does not want to do it. It makes no sense to package items to be placed on shelves and then have people go pick the items off consumer shelves and deliver. There is so much vertical optimization that could be done.
Every large NY grocery store consistently seems to have either poor-quality or extremely expensive produce, which was drastically exacerbated last April: if you don’t go soon after they stock, people pick over, scratch and generally take all the edible-looking choices. Whole Foods was terrible for delivery: the pickers seemed to just choose what was available, which inevitably tends to be what in store shoppers left over. I’d much rather on average get an average apple or onion, without having to spend time figuring out whether it’s “good”: average is almost always good enough.
My total time spent grocery shopping went down, while the quality of the food went up. Their website does a really good job of focusing me on what’s fresh, in season, and otherwise likely to be good this week, and it seems like there’s a lot less waste in this model. I can also order more than I can walk home myself, which is pretty valuable when you don’t own a car.
Although, I do have to say grocery stores in London and Toronto were much nicer than NYC in my experience, so it may be a cultural/customer demand thing too.
Their site and app are glacially slow, though. Not sure what's going on there. And for a while they've had some text-entry glitch that reverses text every now and then. But that's just griping.
Also, with kids it's nice having the weekly 3-4 gallons of milk just show up rather than schlepping them home from the bowels of Whole Foods.
Compare this to where I live in a London, which is a similar PT distance to central London as Greenpoint. We do all our shopping at a brilliant greengrocer just the round the corner, there's specialty delis and such in walking distance. There's also a number of Sainsbury's and Tesco locals. Then, about 25 min walk away, there's two major supermarkets (a Waitrose and a Morrisons). I guess people in NY don't cook?
So misery either way.
What you experienced are the fruits of gentrification in NYC. Greenpoint is an overpriced neighborhood which used to be a Polish enclave (still is to a degree but on life support from what I see). People down there shopped at local ethnic markets, many of which are gone due to gentrification which drove real estate prices through the roof.
Showed up at the Walmart thinking I could just pick it up right away. Turned into a huge big thing. The staff only goes around 1-2 times a day to fulfill these sorts of orders so I would have ended up waiting.
I ended up buying the last one on the shelf, which was mine anyway, and cancelling the online order. I wonder what would have happened if someone else bought it first.
I see this more as iterating on an idea to provide this service, and what I experienced, is the MVP.
Source: worked in a few Walmart back rooms picking and binning among other things. The was about 8 years ago so things are likely a little bit different. Hopefully better since shelf max counts were always way off or we'd get flooded with freight and lose stuff in the bins.
I actually order online for pickup to ensure no one else buys it if there is only a few of the item in stock.
For grocery fulfillment, I don't think they are better at scale. Because they are for from the customers, they are not everywhere. Existing stores, so, are there. They use established replenishment from existing warehouses. Which means you have to use existing staff and store processes (and software) to fulfill orders. Which is hard. So it's either expensive or hard to do (which could expensive in itself). Over simplified.
The semi-automated ones have different issues. Only Amazon really has the tech fully figured out to a degree where issues are resolved almost instantly. Amazon can also use less but larger scale fulfillment centers because they deliver mostly small objects at an arbitrary time, whereas you can't leave 6 bags of groceries at a front door.
Warehouse trumps Supermarket for efficiency by multiple factors easy.
Just as an example imagine the 50 most ordered items. I can put these in a tiny area closest to my packers in a warehouse. How far to you think you'd need to push a cart between those 50 points in an average Walmart?