Amazon plans major move into grocery business

1. Amazon Fresh prices one year ago were pretty high, they have driven costs down on everything except produce.

2. I live close to a City Target and have been avoiding Amazon Fresh because I thought the target was cheaper. Yesterday I took my $100 grocery bill and recreated it on Amazon Fresh, and excluding produce, it was $89.00. I was shocked to see the prices were cheaper for most things.

3. The delivery is free for $100 purchases, so you can't use it like regular amazon (or amazon prime).

4. The delivery times range from 5 am in the morning to late in the evening.

5. The packaging is often reuse able, plastic containers or clothe-bags and so you can leave outside and the delivery folks will pickup the old packaging, this is much more sustainable than regular amazon cardboard packaging.

6. Living in a city, it is easier and cheaper to buy in bulk of Amazon Fresh, because they prefer selling in larger quantities. Some items have 2 or 4 quantity minimums. If you don't have a car this is fantastic.

The UI wasn't as good as a supermarket shelf, and Amazon didn't always give unit prices ($/lb) in consistent units across the board. I don't think they let me sort cereal by unit cost either.

At budget pricing, it didn't seem to compete with Safeway. The minimum orders needed for free delivery also tended to price out a single grad student. Re-checking prices recently when ordering for two, it seemed like it was kind of a wash.

It's worth checking out. If it works for you, it can be great.

The real win for Amazon is the upsell. If you're ordering groceries, you can also order electronics with nigh instantaneous delivery for free. It's powerfully addictive (so powerful, in fact, that I noticed and quit).

I welcome Amazon groceries.

It all works pretty well as long as you don't get too crazy about how long you leave the groceries outside.

then in addition, we'd have to consider whether having items chosen for you as opposed to chosen by you would engender more negative reactions buy the user (which I imagine ius the case since there's no more incentive to protect yourself vs purchase regret)

You can even sort by produce rating to see the FANTASTIC! things first.

I've found that their descriptions always met my expectations.

It's also a good way to start cutting out their biggest expense--shipping. If Amazon is already going to be in your neighborhood every day dropping off food, I don't see why they can't also drop off other Amazon products.

One of Amazon's largest costs right now is shipping, and their volume is approaching the scale where running their own last-mile transportation, in some cities, starts to make a lot of sense.

These are also, coincidentally, the cities that are dense enough to support a delivery grocery business.

So basically:

- Freedom from the tyranny of UPS, FedEx, and shitty last-mile delivery companies like OnTrac.

- Lower cost and higher efficiency of a shipping infrastructure that is tailor-made for their product variety and delivery timing.

- A convenient way to build said infrastructure in a way that does not involve Amazon going all-in with their core business, and instead allows them to slowly attach the main Amazon.com experience as the delivery infrastructure grows.

- Domination of yet another vertical.

I'm excited. I used Amazon Fresh in Seattle when I lived there, and nowadays in NYC even the vaunted FreshDirect simply does not compare. New Yorkers think they've seen the end-all-be-all of grocery deliveries, but they ain't seen squat yet.

Instead of stocking the shelves and maintaining them now you place a pallet in the pick line and have an order picked once. Warehouse space is typically cheaper. A warehouse doesn't need to be built out to look nice, just fictional.

Your advertising, shifts and is honed so less is hopefully spent. You also get to tap amazon's logistic and ordering knowledge so less waste and spoilage.

Your order pickers can grab all the items before they go. Hell they could build in specials for when a supply has been sitting but still good.

You don't have to have people rounding up carts, watching automated checkouts, etc.

The margins aren't as great as other goods but if you cut the costs and match local prices you can still make more. I also would guess that as time goes on their could be a grocery prime account where you get a once weekly delivery

1. Most of the money in grocery is in perishable foods. There's also a huge amount of shrink from product spoiling or being damaged -- A truck driver having a bad night can easily lose 2-3 pallets (288 gallons each) of milk. If the cooler or freezer is full, pallets of product sometimes get left in the backroom aisle.

2. Unions forcing exceptional medical plans. When I worked for Safeway, and was part of UFCW Local 367, I had the best medical care I've ever had -- PPC network with low copays and it included ~$600 of dental and glasses lenses/frames every year/two. And we had no deductible as long as we worked more than 20 hours per week.

Amazon won't have any stores, so they'll be avoiding both of these costs.

Another mantra: platforms win (unstated: in the long run).

My synthesis: The purpose is to become the platform for all commerce, not to sell groceries. I wouldn't be surprised if Mr. Bezos' long term goal is something breathtakingly audacious like "directly facilitate 1% of all global commerce by 2073."

Using such robots for groceries might increase amazon's margins in retail to a reasonable level(for amazon), and will definetly be a competitive advantage over others.

Some examples: Pike Place Fish co, Top Pot Doughnuts, Trophy Cupcakes, Macrina Bakery, Beecher's cheese.

Now I'm all hungry. Thanks.

I get about 75% of my groceries through it, and have been for the entire time it's been available.

Their default produce & meat isn't quite as good as a WholeFoods or my favorite local store (Madison Market aka Central Co-Op), but AmazonFresh has recently started sourcing certain items from local specialty vendors - think Pike Place Market fish guys, that sort of thing. Those items are great, and it's wonderful to have them delivered.

Over the years they've tweaked a few things: changed the minimum delivery size, added a "tip" for the driver (which I think is wrong - they should be paying these guys a good wage .. but that's not Amazon's style, I guess).

They've also iterated the website multiple times from an initialy somewhat poor UX into the current one, which is pretty good.

EDIT: oh, and being able to add groceries to your order until roughly midnight, and still getting them on your doorstep by 6am the next day ... magic.

They also deliver certain Amazon items (they call this "Amazon.com NOW"), so I've ordered things like digital cameras and had them arrive within hours. AWESOME.

As for produce, I'd rather just go to one of Seattle's many neighborhood farmers' markets whenever possible ;)

There are some companies that do online furniture. First they use the price advantage ,and stuff like group buying. They also try showroom models like: showing a few couches in some coffee store, or showing miniature models of furniture , to save space. I bet there is also some work on 3D and virtual reality that we might see when the occulus rift becomes popular.

If think amazon's strategy is to let other companies solve problem and the rapidly copy them/buy them and use their resources to scale the business. They just recently started doing so in fashion.

I've even bought a couple of suits from them, and they were fine. It's not a problem as long as you measure carefully and plan on getting some alterations/hemming done locally (as you would with any off-the-rack suit).

Hey, that might be an idea. Amazon sends around someone to measure you, then you get a bespoke, tailor-made suit delivered in a week or so. Take that, Savile Row. :-)

Furniture could be handled with a good VR system -- something that lets you take a few dozen pictures of your living room from different angles, synthesizes a 3D model, and then lets you put a virtual piece of furniture in there.

That's a little more than usual, but really any well-planned moderately dense city should have most of your immediate shopping needs within a short walk. This is a service for suburban areas where you'd otherwise have to drive.

It would be nice to see them use electric vehicles, though.

If they could integrate with some popular recipe sites to add little "Buy this on ..." buttons to each item in the ingredients list it'd be even better.

Grocery shopping in a browser UI can be a decent experience but will probably never be as clear and convenient as seeing the actual item, especially for non-prepackaged (meat, fish, produce, floral, etc.)

Convenience - online shopping requires planning ahead and being home in a time window to receive delivery. For the homebound it is no issue, but for most working people it's easier to just stop by the store on the way home.