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Comment by karamanolev | Hacker News Reader

I work in this exact space (online grocery retailer in Europe). We're profitable and one of the few companies to be so in the sector - many online divisions are losing money and being bankrolled by the parent company with physical stores. Alternatively, burning VC money.

The thing that's wrong with Ocado's technology is that it's ridiculously expensive and tailored for huge FC's (fulfillment centers). The problem with that is that it needs to serve a large population base to be effective and that's hard - in dense metros, the driving times are much longer despite smaller distances. In sparse metros, the distances are just too long. In our experience, the optimal FC size is 5-10K orders/day, maybe up to 20K/day in certain cases, but the core technology should certainly scale down profitably to 3-5K. Ocado solves for scaling up, what needs to be solved is actually scaling down.

There are a lot of logistical challenges outside the FC, especially last mile and you need to see the system as a whole, not just optimize one part to the detriment of all others.

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I think there's a space for something in between Ocado and Uber Eats, in the 2010s I worked for a startup where you could book an Ocado style delivery slot for the next day from a bunch of different butchers, bakers, etc and then we'd send a van round to collect from all of them and deliver it to you. Annoyingly they ran out of money just a little bit too soon, I'm pretty sure if they'd managed to hold out until 2020 they'd have seen a huge increase in sales as everyone fully got on board with online delivery and been laughing.

I think the big win with that model vs Ocado is that scaling down is fine, you work with whatever shops are in the area and don't need to deal with building fulfilment centres. Maybe you need a car park somewhere to put the vans overnight. Scaling up is a case of moving into different areas, or onboarding new shops. Absolutely agreed that last mile is a nightmare but we mostly had it down I think, the biggest pain there was that we were relying on a bunch of third parties to pack an order, and if any of them got something wrong we ended up with an unhappy customer on the phone and needing to deal with it.

VC reinvents the milk man (who used to deliver much more than just milk.)

Our milk man still delivers a lot more than just milk.

>the biggest pain there was that we were relying on a bunch of third parties to pack an order, and if any of them got something wrong we ended up with an unhappy customer on the phone and needing to deal with it.

Why not have drivers verify the order with the store? Like have the store folks walk through the pick ups. It might be slower up front, but it would save lots of time and money for everyone in the long run. One of those slow is smooth and smooth is fast situations. Alternatively, the drivers should have a book they could match pics to items perhaps

The other thing I wonder if it would be possible, would be to reduce revenue share for stores that routinely had issues with accuracy, but that means you'd need leverage, and you simply may not have it.

I stopped using Doordash because they had absolutely no process to ensure drivers picked up the correct person's order, let alone actually making sure orders are correct. You give me another person's order with completely different things - I don't trust you again.

This is one of the most basic functions that a delivery service should have: making sure that you get the items you ordered, in good shape.

I worked in this business for over 15 years on the tech and business sides and I can say that the traditional VC-funded startup regime is fundamentally incompatible with the basic realities of the food industry. What is sort of funny about it is that in many areas there are local companies that have been around for many years doing this fantastically. As other commenters pointed out, this is essentially the milkman model.

There are a number of extremely difficult problems that are definitionally insurmountable on the timescales that VC operates -- paramount among them being the establishment of trust and mutualistic relationships with your vendors/stores, customers, and employees.

You are right that there is such a space, it just won't happen in the context of a startup taking VC cash.

You're absolutely right on that - what eventually killed the business was an influx of VC cash and demands for massive expansion during a period when we almost had delivering in a single city nailed.

FC's can have very efficient fundamentals if done right. Sharing shops with direct customers is very problematic - while appealing, the scaling just doen't work for them very well. They're also subject to a lot of variability due to contention with said customers.

This is why next day delivery slots worked - shops were able to pack orders during quiet periods rather than suddenly getting slammed with delivery orders that will be picked up in 20 minutes just as the lunch rush arrives. Some of the shops we were delivering for had people they employed specifically to do this, and generally they loved it because it meant their staff were doing something during otherwise quiet periods.

Next day slots generally work for few customers. We offer delivery in the next 3-4 hours (unless demand is crazy) and the difference in demand when you offer 3-4 hours and when you offer next day is HUGE.

Where are you operating? I live in a dense European city and I don't know a single person who orders groceries online. Smallish shops with bike racks in front of the door are simply too convenient, seems hard to beat. Next few days shopping can easily be done in 15mn on the way back home.

Maybe it's different in Europe, but at least in Australia you end up paying more at smaller shops, so I tend to avoid them. Is this the case in Europe as well?

Yes - groceries in a small shop are easily 2x the £/calorie in the UK compared to a big superstore.

Are you comparing the cost of strictly identical products or something else? I'd be very curious to have some sources if you have any

No - small shops tend to sell mostly expensive branded products in smaller packets, whereas superstores sell larger packs of unbranded products.

In my country and city the small shops are largely stocked from buying the same things from larger shops combined with their own resupplying network. So you can either walk 100m to the corner shop, pay couple dozen % extra or walk 500m to the nearest Lidl or similar and save on basically the same products.

I would think the sensitivity to this would depend a lot on family size. Shopping for just myself... it doesn't matter much. Shopping for a family of 4 would be very different.

For a first world country, Germany has ridiculously low food prices. These are found at the chain supermarkets (Aldi, Lidl, etc.). They tend to be small by American big box standards (perhaps 1000sqm, so maybe 3x the size of a bodega). There's a lot of these supermarkets everywhere in the country, most people can easily come across them during usual daily trips.

Yes shops in dense urban areas are overall more expensive but there are discount stores like Lidl too. For higher quality products the difference is marginal (if you can even find an equivalent in a big suburban store). Having experienced both, my feeling is that it evens out if you account for the running cost of a car used often or delivery.

That probably depends on the country and what you mean by small. Smaller shops/supermarkets in Denmark tend to be cheaper, because they are run mostly as discount brands, while the larger stores a premium brands and have the more expensive options.

However, Danish supermarkets are generally kept small by regulation, meaning that there are very few supermarket that could be considered big by international standards.

judging by his name, he is perhaps in Sofia. I am also living here, and can confirm that many middle class people order groceries online.

> Smallish shops with bike racks in front of the door are simply too convenient

Most people don't live in city centers. Because they are the most expensive places to live in.

You don't always need to be a city center to have this convenience, but you can't be in an area that is car centric... And usually when people compare the cost of both of these places, they only account for the cost per square meter of accommodation.

You don't need to be in a city centre for small shops with bike racks.

This is village with a population of a bit less than 3000, which I only know about because I have walked East-West across most of the state of Brandenburg (from Słubice in Poland to the city of Brandenburg) and this trains station was a convenient break point:

https://www.google.com/maps/@52.3459295,14.2800967,3a,60y,14...

Here's Aberystwyth, where I did my degree, population 13k, nearby villages boost that by about 6k, students by another 8k:

https://www.google.com/maps/@52.4145833,-4.0848806,3a,75y,19...

I grew up on the south coast of the UK. Which is certainly expensive overall, but it has cheap areas like Leigh Park which used to be entirely council houses (i.e. made for poor people and run by the local council):

https://www.google.com/maps/place/Leigh+Park,+Havant,+UK/@50...

One of those shows several cars in the photo and a single bike.

The other two show pedestrianised areas, and all three show pedestrians without any indication of how they go there. When I to to similar areas in my town (pop approx 23k) I have drive there, park, and then walk around.

I have several shops within easy walking distance and many people (including me) do walk to them, but quite a few drive. Few bikes (kids mostly) at shops although leisure cycling is VERY popular here.

One of the nice things about an edge of town area with its own identity as a village is we have a lot of local stuff which is walkable and friendly.

> One of those shows several cars in the photo and a single bike.

Yes, and? "Cars are popular" is not a surprising claim that anyone has been contradicting, so far as I can see. (Also, Aberystwyth is tiny enough to get around entirely on foot, and hilly enough that bikers have to be exceptionally fit, and yet despite this, bike racks).

> The other two show pedestrianised areas, and all three show pedestrians without any indication of how they go there.

The Edeka in Briesen is one of the other two, I don't see a pedestrianised area, do you mean the car park owing to the open-air market set up in it?

The other one (Leigh Park) is literally in the middle of a typical UK conurbation with, as is normal in the UK, approximately universal pedestrian access. People can walk there easily from their homes, they can cycle, they can drive, they might even take a bus. One thing they're really not likely to do is come from very far away, because the only people who know about Leigh Park are the adjacent parts of the conurbation and they mostly look up their noses at it because it's poor.

The claim was made further up the thread that "I don't know a single person who orders groceries online. Smallish shops with bike racks in front of the door are simply too convenient, seems hard to beat" and I interpreted your photos as supporting that claim.

My point is that it is not "shops with bike racks" that are the alternative to online groceries, it is a mix that definitely involves more use of cars than bikes, plus probably more walking and public transport than bikes too.

Ah, got it. I missed that interpretation of the surrounding context, that's fair. Looking back at the comment you mention, I see how it could be interpreted as either "e.g." or "exclusively" bikes.

To your point, I agree, it's definitely not just bikes: I could bike to my local stores, I actually walk most of the time. With the "e.g."/"exclusive" split: Back when I was commuting, I did so by bus and train, and would also often go via a shop on the way home. The Briesen example is close to the train station, so my guess is that many of the locals would do likewise.

I'd go further though, we do order online about once every 6-8 weeks, because bulk purchasing 18 litres of soy milk and another 9 of long-life cow milk that way is more convenient than frequent small purchases at the same time as the perishables.

The UK is strange, it's really not bike friendly but you do have rows of small shops outside of city centers and towns have many of them too. France is rather the opposite or simply worse on all aspects in the countryside.

The UK varies a lot. A lot of places are walkable so a mix of public transport (in cities) or car and parking and then walking are common.

I never had a car in London, and would not want to drive in central London. Public transport is faster, less tiring, and while not cheap, is cheaper than running a car.

Living in Cheshire a car is a necessity.

You'd get these in inner suburbs, too. And non-inner suburbs, for that matter.

In the London suburbs you see the grocery delivery vans out and about all day every day. It very much depends on the neighbourhood though, mostly the slightly posh mums or elderly ones ordering.

In the UK, but not in London, but my order online sometimes because local shops do not have everything I want, it takes time to drive into town and shop at a supermarket, so when I am busy I order online.

Like a lot of people who work from home there is big difference between the time required to shop, and taking a few minutes away from my desk to get some stuff from the door to the fridge.

I live in inner London. I have multiple grocery shops around me - within 10 minutes' walk I have a fishmonger, two butchers, two delicatessens, three bakeries, three greengrocers, four mid-sized organic/international grocers, six patisseries, a large Lidl, and a very large Sainsbury's supermarket.

I visit those local shops once or twice almost every day to pick up fresh bits and pieces - but I still get bulky or heavy stuff delivered by Ocado (toilet roll, washing powder, everyday wine, that sort of thing).

There is a gas station that sells candy and stale jerky, a hard, sidewalk-less 10 minutes walk from me (probably 20). Not sure it would be feasible to go anywhere else. -American

That's the thing, though - you'd think that this would result in these "heavyweight" Ocado-style home delivery options being more viable in the US than in London. And yet, they're not.

Sure, you have Doordash-style same-hour options which are largely based on someone picking stuff up from a local store on your behalf (we have lots of those too). But the Ocado/Kroger robotic hive fulfilment centres ought to be more efficient than that whilst offering higher quality by cutting out the labour-intensive warehouse -> store -> shelf -> checkout part of the process.

I think some of it comes from a feeling of "that can't possibly work", perhaps as a hangover from the failure of Webvan during the dotcom boom. Maybe with some "well, I have to use my car for everything else, so I might as well use it to collect groceries too" layered on top.

Which all points to it being a fairly intractable problem - there are a bunch of only tangentially-related issues that need sorting out before it can be become a widespread success.

Another possibility: For perishable goods in the sort of SKU counts typically offered, it can't work unless it has a certain minimum scale. Local supermarkets supported by a largely automated (and has been for 30 years) regional distribution center have that scale from walk-in traffic. A new delivery service using high-density storage could save on real estate and labor costs on the backend, but it has to have runway to replace a lot of the local market (which may take a decade), and the whole time you're scaling, these low-velocity SKUs are literally spoiling while these expensive, high-throughput robots are mostly idle. The frontend costs of delivery are a separate category of problem.

Replacing the regional distribution center instead with even higher levels of automation, and getting your groceries delivered from the same warehouse the supermarket is, would give you the scale from the start... but then that increases your frontend delivery costs and more importantly your frontend delivery latency; High latency is a much worse thing with milk than with books or hammers.

Sure, but that's a matter of raising capital - which, again, you would think would favour the US over the UK.

To be fair, though, the bulk of Ocado's initial investors were from the retail and finance worlds - and the difference between the US and UK is smaller in those fields than it is for tech.

When I go to visit the Midwest in the winter, the perishables are… non-existent.

More like 30!

You live in the suburbs, or a small turn, or a city?

How do people in your area generally get groceries?

Balancing out the other comment - there's two real supermarkets within a fifteen minute walk of me (another American). It's fun to leave meal planning up to whatever is on sale that night.

For people in the outer suburbs where that's not an option, I don't know why a service hasn't arisen where you can plug in, "we have X adults living here, they average Y meals per week made at home, we want Z grams of protein per meal, here's our dietary restrictions, solve that system of equations out of whatever's in your warehouse and take a flat rate for delivery and percentage for your overhead." The pure delivery services all seem to be plays to hide huge prices behind tricky introductory rates. Both my local supermarkets offer delivery and presumably have the data to make that possible but they want me to still pick individual items in a vastly worse interface (any website or app) than the experience of standing in a dry goods aisle.

You underestimate how hard people’s food preferences are. They are really locked into their set of brands for each item. Immigrants pay huge markups to just get the same brand of tomato paste or beans they know. These are some of the most commodity style food items

I live in a dense European city and all I ever do is order groceries online. I can order larger amounts in one go, so, batch order once every two weeks or so.

Instead of having to fight with a machine to give back my empty cans/plastic bottles, I can just give the delivery person a crate and get my money back.

Doesn't capture all my groceries, I love biking or walking to a smaller shop on occasion, or if I have a specific craving, but 90% of my groceries is delivery.

Berlin here, people order from bike delivery grocery stores all the time. Not necessarily to do your weekend shopping, but still.

Isn't this expensive after you factor in the extra margins and delivery costs?

Well, ish. German grocery prices are still quite low, comparatively. People use the delivery services not for full weekend shopping, more if you get home late and the fridge is empty, or a public holiday is coming up etc.

Still, they are popular.

Also, anecdotally they are more popular amongst less price sensitive people with disposable incomes, where paying for the convenience is worth it.

But also, definitely not the Ocado model.

I live in a not-so-dense European city (Bratislava) and several our neighbours here in the extended city centre order groceries online, although we have a small shop within 100m and supermarkets within 2km of driving. It's very convenient for parents staying at home, for example.

> I live in a dense European city and I don't know a single person who orders groceries online.

I live in the U.S. and have almost never used a service like Instacart. Also, when I see the item I’m trying to order in Amazon is fulfilled by Whole Foods, I typically don’t buy it, because of the additional cost.

I’d rather suffer a small amount of inconvenience to save several dollars on groceries, and often it may mean that I may need to order a different brand to pick up a similar item at a local store.

However, I’ll gladly pay a little additional money for Amazon for many other items, because it’s convenient, shipping is included in Prime, and because I can get what I want.

I make the majority of my retail purchases at a supermarket, followed by Amazon online (Prime only), then a very small percentage in-person at Target, Walmart, or a hardware/home supplies store or some random online retailer.

The best I can do to “shop local” is to use a supermarket chain; there is no mom-and-pop to support that isn’t a chain unless it’s a restaurant. I don’t pretend that this is actually “shopping locally”.

I’ve only participated in a boycott once or twice, because there is typically a practical reason for shopping when and where I do- either I need to shop then because I don’t get out much, or there’s a sale with actually lower prices, rather than the frequent “increase the price just to cut it to get you to order more” thing, which I also get sucked into, because I don’t have time to price shop, unless it’s with camelcamelcamel for Amazon.

Similar shopping story at our house, but I will observe that Home Depot has made amazing strides into competing with Amazon for delivery of items.

They’ll ship me a $10 <thing my project needs> almost always for free and often next day, sometimes same day. And their prices are competitive in general with Amazon and supplyhouse.com.

I don’t know that it’s a great (or even sustainable) offering from their business angle, but I love it as a consumer and DIYer!

I believe that HD (and Lowes) massively subsidizes their delivery ops simply because they don't want to cede the space to Amazon. It allows them to under-stock the stores but still maintain a reasonable range of products. However each time I have ordered, they have delivered a ~$2 part via Fedex, at no extra cost to me.

They are a bigger fish than the mom and pop stores but that just means that it will take a little longer for the Amazon Prime monopoly cash flow to devour it.

Reading these two comments is bizarre from my perspective. How is Amazon competitive with anything? They tend to have higher prices than other online retailers and the intransparent market place system tries to protect shady sellers with product focused reviews instead of seller based reviews. The moment you get even a single fake product or wrong delivery all the perceived savings evaporate at once.

The idea of paying a subscription for the privilege of being scammed sounds ridiculous. The cost of deliveries doesn't magically go down because you're paying a subscription. You're paying for it either way. Either you're overpaying on the subscription because you're not ordering enough or you're overpaying in the form of higher prices that contain the remaining delivery fee.

It's the all you can eat buffet effect. Pay the price and don't have to worry about shipping, can watch (some) streaming without having to worry about paying, and whatever else they decide to roll into their monopoly black hole today.

Sure, if you do a full accounting of costs you may win or lose, but fundamentally people are paying for simplicity. Because almost everyone is lazy, or too busy, or too afraid of random scammers, or whatever, and they played their cards right to become the Sears Catalog from the 19th century in the 21st century.

edit - and one thing that helped them get there is the return policy, so if you get one of those scam sellers, or they sent you wrong crap, opened crap, or just plain everyday crap, you press a couple buttons, maybe drop something off at a UPS store, and problem solved. That definitely shields them from the fallout from their endless listings from sellers like QWERTY123 and ZXCVBN789, and provides an advantage over any other online ordering that doesn't have the same massive advantage of scale.

For most everything I'm giving as Christmas gifts this year, Amazon has the best (often tied for the best) price. Things from Apple are cheaper on Amazon than from Apple (Airpods Pro 3, M4 Air, etc.)

Predictable delivery, easy/generous customer service, best/tied-for-best price, excellent selection. I'm not sure which part of that is uncompetitive...

(If you know a better price on Airpods 3 Pro or a base M4 Air, do let me know as I'm always happy to save money.)

In my experience, it varies. Amazon is competitive (usually) on high-volume stuff, but can be wildly overpriced in other cases.

I don't order from amazon enough to justify prime, but a few times a year I sign up for a free subscription for a couple weeks or so.

The prices on amazon are comparable to what I see elsewhere for everything I've ordered. The thing that sets amazon apart is that their delivery is blazing fast compared to everyone else. Yes, the reviews are always a little suspect, if I see tons of empty 5 star reviews, I suspect the product, but in general, I've been satisfied with my purchases.

> The moment you get even a single fake product or wrong delivery all the perceived savings evaporate at once.

I’ve been buying on Amazon for 20 years, and I just avoid high value items. It’s great as an AliExpress with an easy return policy. If I get a fake or whatever, I return it or I toss it.

For higher value items, I go to other retailers, such as Costco.

I buy from Amazon:

  1) When I really need it within a couple of days and can't quickly find it locally
  2) When it isn't carried locally (the local retail stock is a lot thinner than 20 years ago)
  3) If there is a BIG price difference -- used to be common but now much rarer. As you say, Amazon's prices are often worse than buying locally.
  4) When I need it shipped somewhere else. I usually spend Christmas, for example in another city, and it is impractical to bring a bunch of presents. Amazon is good for situations like that.

I dislike Amazon, but they are now so dominant it is hard to avoid them.

I've been scolded online for buying from Amazon. "Oh, if you look around enough you can get anything locally." I live in the Seattle area, and I certainly cannot get everything I want locally, unless by "locally" you mean taking an hour or two to drive a 40 mile round-trip to a suburb to the north. I know, of course, that Amazon is partly responsible for being unable to find some things locally, but if I want or need something and I can't get it here in town, yeah, I'm using Amazon.

This but on the other end. I've had literally thousands of pounds of material delivered for free from Home Depot. Sheet good weight adds up very quickly.

I dislike Home Depot's politics so much that I make a point of never going there.

In general, I prefer buying local, because it makes my community healthier -- more jobs, directly and indirectly, more options to buy something this afternoon if I really need it. But the reality is that many items are already very difficult to buy. Some of that was true 20 years ago, but it's gotten much worse.

I don't get anything delivered, but I almost exclusively use grocery pick up since so many stores near me went all or mostly self checkout.

Self checkout is fine for small trips, but expecting people to do so for a cart full of groceries is ridiculous. This trend started at walmart but has started moving up the chain to higher priced stores. I just flatly refuse to do the grocer's work for them when I'm not actually saving any money at checkout for doing so.

There are old, disabled, sick who rather by online than walk. Normally I walk about a mile to grocery store several times a week. But when sick Amazon fresh or whole food is the best price/quality/time option.

I find online grocery shopping shines for heavy and bulky things that are a huge pain to schlep home otherwise, especially stuff that lasts a while.

All juices/waters/beers/wines, paper towels, lots of oranges/grapefruits, cleaning products like bleach/detergent, etc. When they carry them up to your fourth-floor door it's just so much easier.

The smallish shops are good for stuff you can then easily carry in a bag by hand -- meat, veg, cheese, fresh bread.

If you are getting those things anyway, and only need small portions of the other, then why bother?

With the exception of "lots of oranges/grapefruits", you only need to get the things in the first list perhaps every 1-3 months + you generally don't have to worry about them selecting a bad box of paper towels or stale cleaning products vs every time something in that second list is "why did they even bother trying to deliver this to me" quality.

Because otherwise you'd have to do a lot more planning in advance.

For instance, I called in to the patisserie this morning on a whim to treat myself to a pain au chocolat for breakfast. And I think I fancy cheese for dinner, so after work I'll nip out to the deli for some stilton and the greengrocer for walnuts and figs to go with it. I've already got fancy crackers and some good port from my last online delivery so that's everything I need for dinner.

I'm used to being able to pick stuff up according to what I feel like eating on the day. Yeah, it wouldn't be a huge quality of life reduction to have to plan meals in advance but why bother if I don't have to?

Plus, when I'm working from home, it keeps me from being entirely sedentary on a miserable, drizzly winter's day when I might not otherwise have bothered leaving the house, so it has physical & mental health benefits too.

Not a European, but this rings true for me in the US. I'll go out and get something, in part, because it is less lonely and feels more attached to life, to the world. Endless deliveries actually make that worse. I started buying more things locally in part because of that.

It's also one of the reasons I don't really like working from home.

I'll go out and get something, in part, because it is less lonely and feels more attached to life, to the world.

When I was young, I worked in a couple of supermarkets. There were a lot of people who came in each day and bought one thing. Not because that's the one thing they needed that day, but because going to the supermarket was their only interaction with other human beings.

I was young, so I thought they were just poor planners. But there was this one guy who I knew would be in the dairy aisle at 4:35pm every day, and I started having his cup of yogurt ready for him when he walked through. It was he who explained to me why certain people were low-volume regulars.

I need to say you are totally living the life. Good on you.

Why bother with which? I don't understand the question.

Delivery is for less frequent things that last much longer.

Local ships are for more frequent things that spoil quickly.

And adding the heavier/bulkier things to my local trips, even in smaller quantities, just makes the bags too heavy and unwieldy in the end. I only have two hands. Plus it's way more expensive to buy paper towels as individual rolls than in packs of six.

I live literally five minutes walk from a decently sized supermarket, ten minutes from another, and ten minutes on the bus from a great big one. One of my neighbours still gets supermarket delivery. There seems to be some sort of market for it, anyway...

We use Costco delivery at my house because it’s 10-15min each way to go there plus an hour at the place shopping at best (long lines are common). With 2 kids you feel that time especially given how frequently you have to shop for groceries.

It’s a more limited selection but there’s plenty to choose from and I’m done picking out my groceries in five minutes. They magically show up at my door for very little extra cost and I don’t have to bicker with my kids about grabbing a bunch of random stuff either.

I’m not saying you’re wrong for feeling that way, but you’d be surprised how much work it is to go to a grocery store, no matter how close it is. It’s important to think about other factors here.

> I’m not saying you’re wrong for feeling that way

I mean I'm not feeling any particular way; I don't have a problem with the neighbours using it. I'm somewhat surprised that it makes sense for them, but each to their own. Myself, I just shop on the way home from work (my walk brings me past one of the supermarkets).

There appeared to be some tone/judgment in your previous comment but I guess I was mistaken!

>They magically show up at my door for very little extra cost

I find tipping for grocery delivery adds pretty significantly to the cost.

I save money because I have Costco executive membership which also gives me Instacart for cheap, so I put those savings into the tip. Nets out about the same plus several hours of my life aren’t spent at Costco every month.

Many of us enjoy shopping, at least enough that what we would pay for it isn't much of a deal.

Just talking about why some people would want to use delivery even if they live close that’s all. Personally I can do without the chaos of Costco ha plus I go in person to my local grocers plenty in between.

So that’s 10 mins round trip. How many times a week, plus the time it takes to pick and checkout.

I mean, I'm walking past it anyway on my way to the office or to the bus stop.

Right we are all different. I don’t want to bother time with walking inside and picking things out. I would rather spend time with my family. All those minutes add up. Some enjoy it, others find value in that time spent, some of us like myself don’t.

I have this conversation regularly with friends, family, coworkers...

And I've not yet been able to establish the right criteria to guess how a person is buying their groceries.

Location, age, income, number of people in the household, physical ability...

A single guy living in the city center with good income? Takes his car to go in big supermarket outside the city.

A family with four kids living in the suburbs? Goes everyday in the small shops.

I've found two very general personality criteria for online ordering.

Planners. The people who have a meal plan in Google Calendar for the next week and rarely have to "grab one thing on the way home from the store". The people who literally have no idea what they're eating on Thursday will go to the store today or tomorrow, who knows what they'll buy.

Multitaskers. The people who do their grocery shopping on the couch while not really watching TV, or similar downtime when its job #2. I used to shop online while theoretically cooking. It'll be five minutes until this is done I'll spend a couple minutes looking in the fridge for eggs / milk / etc and add to next weeks order.

A specific criteria I've found is people in general don't trust the delivery services for non-hyperprocessed food. I can trust a sealed bag of oreos is like every other mass produced food-adjacent substance. I want to select my own roast from whats on the shelf or my own apples. So people who only eat processed food products that come in plastic tend to like online ordering, people who mostly eat more natural food tend to dislike online ordering.

You have to know people pretty well to determine their project management style and their diet.

I don't think that works either. I'm not a meal planner, but I will usually just make do with food I've already bought. Nothing appeals? I might eat cheese toast or yogurt.

That's interesting.

I'm a planner and that's one of the reasons I don't order my groceries. If there's one thing I know I can't rely on, it's to be delivered on schedule and/or receiving exactly what I ordered.

Meanwhile if I go to the store, I can find an alternative or go elsewhere if I can't find what I wanted.

And I'm also a "natural food" person, so I'd rather pick things myself. Furthermore, if I crush a fruit on my way home, it's on me and I'll deal with it peacefully. If I'm being delivered a crush fruit, I'll get mad at the company I ordered from and I'll have find a way to be compensated.

At least for me. I buy fresh food via online ordering because I hate wasting time these days. Driving even to a nearby store takes 10mins round trip. Then having to walk through the store and fine what I need and checkout. I would much rather order online and get it delivered. Produce can still be a gamble, pickers have no incentive to pick the best produce but for the average meal, that’s fine.

We have mapped the planet, yet no grocery has a freaking map to find what you need.

That’s mostly my problem. Some of the apps have locations, often I find things not there. But for most stores they want you to wander and shop.

Though I don't like shopping at Walmart, I still have to (no store in my area, even "supercenters," has everything I need), and their phone app is absolutely stellar at telling me where a particular product is. Especially handy where there's no staff on the floor (as often happens).

That's intentional. Grocery stores are laid out to encourage you to spend more.

Like almost everything people complain about nowadays, this is not a tech problem, has never been a tech problem, and cannot be fixed with tech.

Third parties with tech could fix it.

Is this a US thing?

I think here in France the best example is Lidl. The stores are laid out the same, so not only your usual store doesn't change, but you can go to any store in the country and find what you want at the same spot.

Personally, with self-checkout, I spend less than 15mn in the store to do a week of groceries.

Not sure if it is just a US thing but it to add a little more depth. Most stores as already stated want you to wander a bit to possibly purchase more things but the other piece is most stores custom to local preferences both on what they carry and where it’s located.

Thought differently most major chains capture all of this data and can optimize stores for sales.

I think the bigger complaint is a typical US grocery store carries an insane amount of SKUs. If I was just going to Trader Joe’s it’s no problem. Low sku count layouts never change. Walmart has probably 10x the skus and it’s a struggle sometimes just finding what you want. Oh I need dry dill, well in the spice section there are 3 or 4 brands. Within those sometimes it’s not in alphabetical order. Things are misplaced or just out of stock.

When I was a kid, 30 years ago, some grocery stores did have an aisle guide printed on the cart. I haven't seen one recently, but they at least did exist.

I've done a few projects in (traditional, not pure ecommerce) retail, and in my experience it is a very low margin business.

This contrasts sharply with being an innovator in the robotics space, which typically is extremely capital intensive with very long ROI trajectories.

We're proving that automation can happen in that space profitably if done right - carefully, surgically and with a small, focused team. There's Autostore in that space and that system has a massively different economics than Ocado's solution, despite the similarities.

So, what you're doing? Sounds great!

Right now we're doing two robotic arms and a lot of conveyor belts - some conveyors serve as just transport, others storage of order totes and some others serve a dual purpose (they move the totes but due to the length we let them buffer for a bit). Additionally, a lot of software automation to help people.

Hey @karamanolev,

Do you work at Ocado? Ever thought of working in AV? We're a young startup in SF, have a couple customers, just raised our seed, and are now expanding our team with some very critical high-ownership founding engineers.

Some info about us: https://crewline.ai/ https://crewline.ai/blog/crewline-manifesto

LMK if this is of interest. -Freddie freddie@crewline.ai

Automation in in logistics and warehousing has been happening extensively for decades. However, with margins in large scale grocery retail are often far below 5%, any significant investment in unproven innovation will impact profits in a way that will be extremely noticeable to boards and shareholders.

This isnot to say it can not be done, as clearly the other side of the coin is that operational efficiency gains are also much more noticeable on the bottom line than in higher margined businesses, but it is higher risk/reward for low margin sectors. This will favor developing/proving the early TRL stages in new entrant or niche players, then buying out the successes when they hit early maturity.

Does low margin matter? If you are replacing paid people, arent you trying to replace that cost part of the equation?

I see Ocado vans driving up to deliver on the Isle of Skye, which I guess must come from either Fort William or Inverness.

I can't imagine it's especially profitable to deliver a bag of food in a refrigerated van to somewhere that's nearly four hours driving each way.

I'd guess that they make a loss on this, but that they accept some losses in exchange for being able to say "we cover the whole country!" This is the case for pretty much any delivery business.

Meanwhile the AirBnB dwellers continue to not spend a penny locally while taking up valuable housing.

They're actually worse than the motorhome brigade.

> FC size is 5-10K orders/day, maybe up to 20K/day in certain cases, but the core technology should certainly scale down profitably to 3-5K.

deja-vu from the e-scooter business. even with a good product, its just not profitable/scalable enough

Ours is profitable enough. And it can scale but covering more area with FC's of a profitable size. Additionally, market penetration of online grocery shopping is growing rapidly and has no reasons (that we see) to stop growing (as a % of all grocery shopping).

The grocery business has razor thin margins. There is no dry sponge remaining to absorb this kind of massive fixed cost. The business is highly variable.

I think scaling up would be the only way out of this problem. Scaling down only makes it worse.

Or you sell every bit of data you collect.

We don't need to do that at all. Essentially zero. Whether we'll do it in the future - I don't know. It's not really under my control, but right now we can be profitable without needing it. And we're price-competitive with the large grocery stores.

No true for us at least. Well kind of - the scale I'm mentioning is required if you're doing your own tech like we do. We develop all our core tech - the website, the logistics operation automation, the last mile app and scheduling. If we can do that profitably, what do you think will happen a company like our develops a few FC's of similar scale using the same technology?

The margins are thin, but not as razor thin as you might think. The grocery stores have a lot of overhead that we don't. Additionally, people realize that not only is that the case, but they also save from their own costs - just driving to the store is not free, let alone the time you spend, which is massively cut down.

> Ocado solves for scaling up, what needs to be solved is actually scaling down.

This has been solved by Pio (by AutoStore)

Autostore is great, but it's a small component for a business to be profitable end-to-end. Maybe 20% of the whole thing.

love ocado purely for the reason it's cheaper than other services. i suspect they are subsidising each order to build long term customer behaviour but it's a gamble when customers can eadily switch as the moat is purely pricing

So who's their target customer? Are we talking about Amazon/Temu scale here?

Seems so, but the economics for groceries don't work like that since you don't ship a slice of meat and a bottle of milk like you ship a 512GB SD card or a smartphone.

They literally copied their supplier ( autostore ).

Unfortunately, auto.ol shared secrets with them, Ocado abused that in court.

Literally, Fuck Ocado. I wouldn't trust them.

Some context: https://archive.ph/Apfdv

Autostore ended up paying Ocado? How did Ocado abuse them?

Yes, AutoStore lost most important cases in US (ITC) and UK's High Court.

Because autostore shared trade secrets with Ocado. The lawsuit was found to be not valid.

Note: Ocado was a customer of Autostore in 2012 and just copied them. Sharing IP basically invalidated the lawsuit.

https://www.blackstonechambers.com/news/autostore-technology...

Autostore disclosed their design externally before the patents. So the patents were "invalidated" by themselves

At least read what you’re posting:

AutoStore claimed that several of its European patents covering cube-storage robots and grid-based systems were infringed by Ocado’s Smart Platform robots and storage grid. The judge looked closely at the “central cavity” robot patents (EP 2 928 794 and EP 3 070 027) and two other related patents and compared them to earlier disclosures and designs. He found that the claimed inventions lacked novelty and/or an inventive step, meaning they did not add enough new technical idea over what was already publicly available, so the patents were revoked.

Additionally, even if the patents were not invalidated, the judge found that Ocado did not infringe them, even if they were valid. Specifically, Ocado’s robots and grid as actually built and used did not fall within the wording of AutoStore’s patent claims. The court concluded that, on proper claim construction, Ocado’s design did not use several key features required by the claims, so there was no infringement in any event.

This is all in the judgment.

Finally, Autostore had to pay Ocado $256M USD: https://www.therobotreport.com/autostore-to-pay-ocado-256m-i...

There's literally a picture on that page to compare Ocado vs their original supplier...

Let's say "heavily inspired" on instead of copied then.

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