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Comment by a5seo | Hacker News Reader

I bought Webvan stock on their IPO day. Lost around $5k. (I was 22).

Amazing service. Terrible business model: boil the ocean, premature scale, hire the head of Andersen Consulting as CEO. Every bad, nonsensical decision.

And yet, the core was valid: a lot of people want their groceries delivered. When I went to business school a couple years later, the CMO of H-E-B spoke to my class (later, President) and I asked when they’d offer delivery. His response: “we believe people enjoy the experience of walking the aisles.” Well, Scott, whose parking lot is now 50% curbside pickup? Who spent 9 digits to acquire Favor? You’re welcome, you rich bastard.

It’s a good thing the grocery business had enough margin for error for these people to come around to learn the correct lessons from Webvan.

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Curbside pickup, and delivery are quite different economically, but I agree that "enjoy walking the isles" is nonsense.

I'm not sure the economics of delivery (in a general context) work. Sure, there are folk who are time-poor, and cash-rich, and for them it makes sense, but for the rest the price either has to go up to reflect the cost, or the delivery cost has to be subsidised.

Curbside pickup is a happy medium ground. Picking the groceries is cheap, and the expensive part (delivery) is handled by the customer using their time and their car.

Amazon Prime is a good counter-example that delivery does not need to be subsidised as the pro rata delivery cost decreases if

1. more people order, or

2. people order more items

Both, 1 and 2 can be influenced by marketing and delivery can become a revenue instead of a cost center.

Bonus points if that means that you can deliver from a cheap warehouse instead of an expensive supermarket.

Prime delivery is subsidised by the margin on the goods, how else would 'free delivery' get paid for?

Delivery cost increases logarithmically (one package more in the same truck) while revenue increases linearly when more people order / people order more. Increase in revenue outpaces delivery cost even for low margin items.

Amazon makes more money with people on Prime, not less.

i wouldn't say "enjoy walking the aisles" is complete nonsense. I actually do enjoy walking the aisles myself, but as I get busier in my daily life, I find that to be a huge time sink. despite that, i still do it because I still can't bring myself to trust a gig worker to do the shopping for me. sometimes, even buying something like crackers, you need to at least do a quick cursory check on the packaging to determine if they were crushed.

I enjoy walking the aisles (at HEB no less) to get ideas for what to cook and to pick out my own produce. Pick up is certainly a nice option too.

I mean the idea itself is fine but it’s also the most basic thing. “Food deliveries, but on the internet!” It’s the first thing you can think of!

Business like this is 1% initial idea, 99% execution and cutting costs.

> His response: “we believe people enjoy the experience of walking the aisles.”

I don't enjoy "walking the aisles" at all. But I do want to choose the produce I buy myself rather than have a picker do it.

Also, I don't buy large amounts of produce at a time. I buy it the day I'm going to use it.

For those two reasons, a produce delivery service isn't of interest to me.

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