Uber starts same-day grocery delivery service in US
bbc.co.uk
bbc.co.uk
1. They're local. Most people have a grocery store within 5 minutes of their house.
2. They're well-stocked. You have ten thousand products to choose from. Who could ask for more?
3. They're timely. If you go to a grocery store, it will take you a certain maximum amount of time - the amount of time it takes to go down each aisle once.
4. They're accurate. You picked every item. Your fruit fits your exact criteria.
With grocery delivery, you can be perfectly local, but your stock is identical and your accuracy is almost always worse. And your time window + the time it takes to pick the two dozen items you need will almost always be worse than going to the grocery store.
That said, there is a niche for this - the elderly and the very, very busy. To capture the second niche, you'll need to up your timeliness though and improve your branding on speed. It should take no longer to deliver groceries than it does to deliver a pizza.
I want my DiGiorno delivered.
In the US it might not be as big a market due to a different lifestyle.
6. They have pretty low margins on a lot of their inventory.
I just did some back-of-the-envelope math and determined that the minimum time it could take for me to go to the grocery store and come back, from door to door, is about 40 minutes, and the maximum is about 2 hours. I took into account everything from walking to my car in the parking garage and getting out of the garage to finding a parking spot, waiting in line to check out, hitting traffic lights on the way there and back, etc.
I think this is why I don't cook as much as I'd like to. I can either spend 40 minutes getting groceries and then needing to cook a meal and then eating it, or I can spend 40 minutes picking up, say, Chipotle, which includes eating the food.
So much time wasted.
Before I started getting my groceries delivered, I would find myself regularly ordering delivery food (also online via foodler) and spending way more money because I was too tired/lazy to run to the grocery store after work.
Sure, you can use a large supermarket, but I'd really love to go online, see my local store(s), and click to purchase a handful of items and have them delivered within the hour as conveniently as a pizza.
It's one of the many ideas I'd build if I weren't already building stuff ;)
I could easily save the £5 delivery charge or whatever by having access to them thousands of items.
I see your point though. It's interesting to be informed of all of these different needs I had not previously considered.
This all in a city that is less than 10 miles from one side to the other (160,000 population).
EDIT: I forgot- there are also 2 Sam's Clubs.
I don't know that this is true. I consider going to the grocery store a creative endevor about half the time I go there. Sure I start with a list and some ideas. But then there are sales on items I like. Or they have some particularly good looking produce that I want to feature in a meal. Or they are out of some other key ingredient for a recipe.... not to mention I'll be updating the menu in my head as a wander the aisles - Seeing and being in the food is extremely distracting since I really like to cook.
Sometimes I just want to go in, grab some basic supplies and leave. I will be exploring delivery options for this case, because it will be harder for a 10 minute trip to the store to turn into a 40 minute menu binge for my impromptu dinner party tomorrow.
To your specific points:
1. Locality is a huge competitive disadvantage. Real-estate, staffing, infrastructure, etc.
2. More-efficiently managing a wide selection and optimizing for product that frequently turns over is a key advantage of warehouse/delivery operations.
3. It makes no sense to compare an interruption of your day with an asynchronous order/delivery method. No-one uses Netflix the way they used Blockbuster. No-one misses Blockbuster.
4. Personally picking fruit directly off plants was more accurate than personally picking fruit in a grocery store. It's also something most people don't miss as a regular chore. Warehouse/delivery has a massive advantage here as well, as they'll be able to better manage inventory flow and don't have to suffer the same exposure to elements/contaminants as a grocery store.
They can even offer "ugly produce" at a discount, bringing the same implicit assumption of responsibility for odds and ends and generating sufficient extra revenue from the particular buyers, to effectively serve them and any returns.
There's no "niche" for this. The niche will be serving the people who enjoy farmer's markets and those who dropped a dozen eggs and will pay a premium for their replacement.
I'm old enough to remember Webvan, I'm seeing COSTCO cede their delivery service to Google, and I realize that most food delivery business is minimum wage work. I don't see the money in it.
I see it as very different from something like, say, Instacart not because of the core idea of grocery delivery, but because Webvan made some mistakes that seem made-up when read today. Recall they had their IPO just 60 days after their first webstore which in turn was something like one month after their beta launch.
So they went from beta with 1000 users to IPO in like 90 days. That's, what, the time Instacart spent just in Y Combinator growing and learning?
AmazonFresh is doing something along the lines of what WebVan was trying, with the capitalization to make a real go of it.
What you wrote and what I wrote I don't think conflict at all, so I don't know why you'd say it is working against me. Also I have found references to what I wrote in writing[0] so I'm not completely crazy.
Now, an anecdote that I might screw up because my memory is fuzzy about it, is that the founder of Instacart was given a copy of Webvan's business plan on a floppy as a sort of "Good luck!" token.
[0]: http://www.amazon.com/The-Startup-Owners-Manual-Step-By-Step...
Similar to AWS, really. Originally the AWS idea was that Amazon needed those extra servers and a way to manage them anyway, might as well do something valuable with the excess capacity.
There isn't much money in grocery delivery services at scale.
Couldn't agree more. Amazing how tunnel visioned they are.
Really sums up the article.
Also, something close to most peoples' logic spot would be that they are not delivering fresh produce. So, only a subset of the stuff that you find in the "middle aisles."
I'll paint in a really broad stroke, but the people willing to pay premiums for the luxury of grocery delivery buy more stuff around the outer edge of the store vs the aisles of processed carbs and food science.
I'm using Amazon Fresh and the savings from not eating out due to my laziness-based avoidance of the grocery store is going to pay for it easily.
I already get my groceries delivered, usually for free from Safeway or Harris Teeter. One of them will run a free delivery special once every two weeks, so I mostly restock on non-perishables, and grab fresh food from the Whole Foods myself.
But the on-demand aspect brings a whole new level of convenience. I'm right in their target demo, so if it works smoothly I'll be thrilled.
But, that's what beta tests are for. Here's hoping the next iteration gets it right.
San Francisco, by contrast, is almost too perfect. It would no doubt be successful there, but it doesn't give them as good of a feel for how this service would fare outside of Silicon Valley where these types of ad-hoc delivery services are far more common.
I get the sense that they're trying to gather data without drawing a lot of attention to their experiment.
This is really Uber's "On Demand ____" promotions (read: experiments) coming to life and I imagine partnerships with retailers (similar to their local partnerships for events and more recently restaurants) will be an easy next step for this service.
Considering that delivery by a full-bodied adult in a car is a pretty expensive thing, it can be solved either by hyper-optimization (incl. prediction), or by utilizing new or untapped delivery resources like school children/dogs/pigeons/drones/automated cars/electronically collared and constantly video recorded low-offense prisoners/etc...