The Same-Day War: Amazon, Google And Walmart Race To Bring Your Groceries | Hacker News Reader

The Same-Day War: Amazon, Google And Walmart Race To Bring Your Groceries

forbes.com

45 pointsgitah34 comments

Having been a webvan customer (mentioned in the article) this race always amazes me. It seems like such a suicide mission.

Here in the UK, all the major supermarkets offer online delivery services. Where I live, I can choose between Ocado, Sainsburys, Tesco, Asda and Waitrose.

While in the US some areas have low population density compared to the UK, there's no reason the major urban centres shouldn't have successful online grocery delivery.

What makes you think it's be a suicide mission?

Interesting, but are people actually using this?

Here in the San Jose area I can also get groceries delivered by at least Safeway, Walmart, Google and Instacart (I might be missing some). But personally I'm not using this and I don't know anybody using it.

Online sales make up £6.5 billion of the £170 billion food, grocery and drink sector in the UK [1]. So 3.8%. It's the fastest growing part of the sector.

As these services prefer to deliver larger orders - Ocado's average basket size is £112 according to [2] - the pricing and marketing tends to target families. And obviously, buying and transporting food for 4 people is more bother than for 1 person, so delivery becomes relatively more appealing.

If your friends are mostly young / single, they're not a representative sample of the grocery market.

[1] http://www.theguardian.com/business/2013/sep/12/uk-online-gr... [2] http://results12.ocadogroup.com/overview/highlights

I lived in London for 5 years and used grocery delivery services a lot. Now I live in Seattle, and don't use them anywhere near as frequently.

There are many difference between grocery shopping in the US and UK cities, but by far the biggest is that in London, a lot of people live without a car. This means walking or taking the bus to the supermarket. (Eg: in San Francisco, 28% of households have no car [1]; in London that number is 60%. [2])

Home delivery allows Londoners to buy the type of and volume of products you want. (I'd rarely buy a 6-pack of 2-liter orange juice cartons alongside the rest of the groceries when I had to walk 30 minutes back from the store.)

Without a car, you also have to make more frequent trips to the store, increasing the overhead of shopping. Being able to drive to the store for a 'big shop' every week or so is much more efficient.

[1] http://en.wikipedia.org/wiki/List_of_U.S._cities_with_most_h... [2] http://cyclelondoncity.blogspot.com/2012/12/census-data-car-...

Speaking as another San Jose area reasident, I haven't been to a grocery store in literally a few months -- Instacart is just so much more convenient. Plenty of my colleagues and friends do the same.

These sort of grocery store operated delivery businesses exist pretty much everywhere in the US from what I have seen. They usually aren't advertised, but you can ask about them. I believe they are primarily used by the elderly, handicapped, carless, etc.

When I was in university, a few hundred miles away from my car, I would use the delivery services for very large orders (like 50 liters of seltzer water, or similar). Typically there is a minimum order size, a small service fee, and an expectation that you'll tip the delivery person (who is usually just a grocery store employee who is using their personal car).

I'm from the UK. My colleagues with kids all do their grocery shopping online. They love not having to find time to go to the supermarket, and not having to entertain their kids while they're going round.

From my own experience, it's annoying the first few times you do it but after a while it gets easier. One cool thing is you can have a list of things you regularly buy and easily add them all to your basket. And they know it's harder to get inspiration online so they try very hard to suggest new things to stop you from getting bored.

My current office is using a grocery delivery service for our snacks and so forth.

So there might be a distinct b2b market here that isn't often brought up. :-)

Publix used to deliver groceries about 10 or so years ago. I used that service from the moment it started to the moment they shut it down. It wasn't viable, because they didn't charge enough, and I would have happily paid more. I miss it to this day, because no one else has started a similar service in my area.

Palo Alto. I use nothing but Instacart.

>Having been a webvan customer (mentioned in the article) this race always amazes me. It seems like such a suicide mission.

It's a little like pets.com, I think. A website to sell dogfood is not a fundamentally unreasonable business to run.

The problem comes when you start buying superbowl ads for your dogfood-selling website before you are turning a profit.

Safeway has been delivering since at least the first dot-com, and they are doing okay.

Amazon is approaching this point, but unlike Safeway, they don't come by with a refrigerated truck, so I can't get my produce through them. I would watch them, though; If anyone is going to become the giant in this space, it's amazon.

As a Safeway delivery customer? the majority of the value I see isn't in driving the food the mile or so it is to my house, but in letting me choose what I want on a website, rather than making me wander through an ever-changing labyrinth looking for what I want.

Amazon is really, really good at that sort of thing. The only thing they need, really, is a contract with a delivery company that runs refrigerated trucks.

I don't think grocery delivery is a suicide mission, even same-day grocery delivery; certainly not if you look at delivery as part of your retail operations.

Amazon already does some refrigerated deliveries for limited areas with Amazon Fresh[0].

[0] https://fresh.amazon.com/

> The only thing they need, really, is a contract with a delivery company that runs refrigerated trucks.

Like Schwan Foods, who has been doing this for decades.

It definitely is a suicide mission if you are running the business with a pure economies of scale mentality. There are so many nuances that can be a competitive advantage if you do it right and a dealbreaker if you do it even slightly more wrong than a competitor. For example, simple and common heuristics from off the shelf TSP solver libraries can have 30 to 50% worse (measured in cost) routes than top tier TSP solvers with as few as 15 stops. The overhead of brick and mortar vs industrial style warehousing can be a 20-40% cost disadvantage (I would bet against instacart for this reason alone). If you dont start from the beginning with the right expertise, you will never have the cash padding deep enough to ever get it right.

I don't think it is suicide. I think it is the obvious future, only to be surpassed by a replicator type device whenever that is invented.

So all the big guys try out the idea, so they have experience with the requirements and then try to figure out how to make a buck at it. Sooner or later someone will figure it out, and then the normal grocery shopping experience changes again.

Whether they figure it out in 2014 or 2024 is anyones guess.

The best part of services like this is that you can use it once every month-two to deliver all the large products. 20 large bottles of water, red bulls, watermelons, frozen stuff, soda drinks - all delivered to your doorstep (even if you live in the apartment they will bring it to you up the stairs). I am not really happy about buying regular food and fresh products from them, but for heavy/bulk products this is amazing.

kitty litter!

It's hardly a race anymore. Home delivery of groceries has been around for about a decade now. Webvan may have been a spectacular failure, but they're hardly even worth mentioning. Many supermarkets offer it and Instacart has really perfected the art. It doesn't come without downsides, however. The price markup is one. The bigger downside, IMO, is the lack of variety. Instacart has pretty good variety and multiple stores to choose from, but it still doesn't even come close to visiting one supermarket. Hopefully someone will figure this problem out.

Some other downsides:

(1) Store gets to guess on what to do if your item isn't actually in stock - you can provide a bit of guidance, but sometimes the replacement is bad.

(2) Sometimes groceries get delivered with really aggressive sell-by dates (like one lb of ham slices that's got 3 days of shelf life left)... happened on a Safeway delivery.

(3) Occasionally I thought I clicked through and didn't, and other times one of my credit cards has a hold (fraud alert) or has been cancelled (thanks Target!) and the account still has it. (this happened a couple times with Google because they don't charge your card until your delivery is on the road).

Strangely I haven't noticed a significant price increase vs. shopping at stores.

For #1, I usually just do no replacements unless I definitely would want either the first choice or replacement. It also depends on who does deliveries. When I got Safeway delivery directly, it was messed up all the time by the shoppers (probably the biggest downside with some services), but Instacart was generally very good about following my preferences. Of course, with no replacements, you might end up without some important ingredients so that can definitely be a problem still.

anyone else put off by the idea of having someone else inspect/pick out your fresh produce?

I'm more put off by people not inspecting and simply picking up produce. The sorry state of merchandising for produce these days requires a sharp eye.

These days? Unless you're talking about "organic" food, produce has never been uniformly of such high quality.

On the efficiency side: cuts down on waste b/c otherwise hundreds of people squeeze the produce. But on the whole I'm not for the plan... seems like feature creep for these companies.

People have been inspecting / picking-out your fresh produce all the way from the field to the shelf, so I don't have any qualms about letting the picker in Tesco select my bananas as the last step.

All delivery services I've experienced permit you to reject items without penalty, anyhow.

Groceries is pretty much the last one thing I buy in brick and mortar stores. Please don't take this away from me. ;)

The article mentions, "Forrester predicts 10% of U.S. sales will be via e-commerce by 2017" -- I cannot believe it's only 10%!

Living in (most part's of) NYC it's pretty easy to just walk a few blocks and be in a grocery store. I actually enjoy grocery shopping, it's where I get ideas about what to cook or discover ingredients I've never used before.

This probably would be most useful in locations encompassing food deserts, but of course it looks like they're largely targeting affluent neighborhoods.

In SF I literally walk past a grocery store every day, I enjoy the occasional grocery shopping, but I can't get enough of these services. I work long enough hours that I rarely have time during the week, so that may account for my view point. But I'll say, once you start using one, it's hard to go back. With a company like instacart, if i'm at that point in the week and I don't have what I need to make dinner, instead of getting take out on the regular, I can get what I need dropped off immediately without dropping what I'm doing. With amazonfresh, I no longer need to do a week long or two week long shopping trip. Fresh produce every day. There's way less waste, at least than what I used to go through. I do still see value in the occaisional trip to the grocery store for reasons you mentioned, but when I do stop now, it's fast, and never on one of those extremely busy weekend days where half of the trip is me standing in a line trying not to block the cereal aisle. In addition, there's one major convenience other than getting large amounts of time back, and reducing waste, I can order what I purchased previously. No thought needed, there's enough duplicate items that going through the mundane process of picking up the exact same carton of milk every week, becomes pointless.

Have there been any studies as to if this type of service increases or decreases the "carbon footprint" of the food. My gut instinct says it would increase it at least until there is a certain critical mass of orders in a geographical area.

A truck can take a circuit and deliver to a bunch of people.

It's better for the environment. One vehicle making multiple stops to customers is better than each of those customers going round trip to the store.

This article summarizes but has a link to the actual study http://www.popsci.com/environment/article/2013-04/home-deliv...

I don't know how they will make money but I don't care. I love this.

3rd parties like Instacart mark up the groceries from the places they deliver from. I believe the margins fluctuate but probably average 20%+.

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