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Amazon Tests a Home-Delivery Service For Groceries

samzenpus posted more than 2 years ago | from the 12-clicks-or-less-lane dept.

Books 176

destinyland writes "Amazon.com is quietly trying to resurrect the failed business models of WebVan and HomeGrocer — two dotcoms which had offered home delivery of fresh groceries — with a new service called Amazon Fresh. Last week at a shareholder's meeting, Amazon CEO Jeff Bezos fielded questions about the current tests being conducted in Seattle. Bezos admitted Amazon is 'tinkering' with the economics of it, adding that 'we continue to think about that...We like the idea of it, but we have a high bar of what we expect in terms of the business economics for something like Amazon Fresh in terms of profitability and return on invested capital.' No further details were forthcoming, but Bezos still acknowledged that 'we continue to think about that.'"

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176 comments

Old news? (3, Interesting)

Anonymous Coward | more than 2 years ago | (#36492406)

I've been a Fresh customer for nearly two years now...

Re:Old news? (1)

Beardydog (716221) | more than 2 years ago | (#36492466)

My house is full of totes :(

Re:Old news? (2, Funny)

Sporkinum (655143) | more than 2 years ago | (#36492588)

My hovercraft is full of eels! :(

Re:Old news? (1)

ArundelCastle (1581543) | more than 2 years ago | (#36492960)

Sadly we can't get fresh eels this far inland.
Also, the margins on the grocery business are insanely low, especially in produce. If you can't make it up on volume you can't make it. I speak from five years of reading "shrink" reports and competing with other stores to have the highest profitability. For which you're lucky to get a pat on the back, and I know of people that were literally hospitalized from job stress.

Re:Old news? (2)

PopeRatzo (965947) | more than 2 years ago | (#36493372)

Also, the margins on the grocery business are insanely low

But not, alas, in the food industry. The retail grocers have been taking it in the shorts for a long time, but if you're making cornflakes, you're raking it in.

The food business in the US is a strange mixture of big corporations that operate on very fat margins, and local and smaller outfits that barely scrape by.

Not surprisingly, Wal-Mart does very well with their grocery business. For those that don't have a conscience or sense of social responsibility or concern about the lives of their children and future generations, I guess Wal-Mart would be a preferred place to buy food.

People want to know (4, Funny)

pompetti (549554) | more than 2 years ago | (#36492408)

Will they deliver Tuscan Whole Milk?

Re:People want to know (5, Funny)

Beardydog (716221) | more than 2 years ago | (#36492472)

They'll deliver Mexican Coke...

Re:People want to know (0)

Anonymous Coward | more than 2 years ago | (#36492594)

The nice thing about mexican coke is it's made with cane sugar instead of high fructose corn syrup, so it tastes better. The bad thing is that it's made with mexican water, so you'll be pissing blood out your asshole for a week.

Re:People want to know (1)

Anonymous Coward | more than 2 years ago | (#36493278)

Sadly most "mexican coke" sold in the US is now bottled specifically for export, and made using HFCS.

If you check the ingredient sticker they add to meet US code it will list "sugar or HFCS." Unless you're getting it from a real mexican grocer with a true import wholesaler you're spending far too much on a HFCS based version. That includes pretty much every bottle in every mega-mart's "hispanic" section.

Any taste difference there boils down to the container (yes, sodas do taste better out of glass) and self-delusion.

This isn't a new test. (3, Informative)

Anonymous Coward | more than 2 years ago | (#36492414)

AmazonFresh has been around Seattle for several years. IIRC, Amazon bought out HomeGrocer and rebranded it.

Re:This isn't a new test. (1)

Anonymous Coward | more than 2 years ago | (#36493374)

Actually, it's more complicated than that.

Between 1999 and 200x, Amazon.com invested in HomeGrocer, WebVan bought HomeGrocer, and the Amazon bought WebVan. Sometime in the past 10 years, both the HomeGrocer and WebVan brands shut down *fresh* grocery delivery, and now are just web front-ends to Amazon's *non-perishable* grocery shipping business. They are "Amazon WebStores". (There are lots of these. You can make one too. It's basically a "virtual" catalog with a custom web skin, backed by Amazon's inventory+fulfillment.)

Amazon Fresh is a new (as of 2007) *fresh* grocery delivery service, deployed using Amazon's in-house newly-created *perishables* inventory+fulfillment system.

SIMPSONS DID IT !! (0)

Anonymous Coward | more than 2 years ago | (#36492416)

And it failed !! Those that don't know history are doomed to repeat it !! Ben Franklin Jr.

Example. (1)

Anonymous Coward | more than 2 years ago | (#36492432)

Bit expensive, but already available country wide in the Netherlands, works fine really.
www.albert.nl/

Re:Example. (1)

SimonTheSoundMan (1012395) | more than 2 years ago | (#36493362)

Very competitive market in the UK. Asda (Walmart), Tesco, Ocado (John Lewis Partnership) to name a few.

Doesn't cost much more, I actually make a saving as I do not impulse buy when I see things on special offer.

how many times (1)

Osgeld (1900440) | more than 2 years ago | (#36492450)

can this idea fail?

It can succeed -- but it's a local business (4, Informative)

Artifice_Eternity (306661) | more than 2 years ago | (#36492470)

Some packaged grocery items can benefit from national distribution and shipping, but lots of stuff -- produce, meats, cheeses, prepared foods, etc. -- need to be staged (and in some cases, sourced and/or prepared) locally, in a refrigerated facility, then delivered in refrigerated trucks. That means this kind of service will only be available in places where Amazon invests in infrastructure to support it. And that probably means denser metropolitan regions, where there's enough of a customer base in a small area to make the investment cost-effective.

There's a grocery delivery company called FreshDirect that services the NYC area; I've had good experiences with them. But they've been refining and building their business for years. Originally they only served certain neighborhood in Manhattan (their main warehouse is in Queens, just over the 59th St. bridge from midtown Manhattan). Now, years later, they have expanded to serve all 5 boroughs, and some areas outside the city. But this expansion was very slow and deliberate, as they built up their capacity, trained their workforce, etc.

Re:It can succeed -- but it's a local business (0)

Anonymous Coward | more than 2 years ago | (#36492516)

See also peapod.com

Re:It can succeed -- but it's a local business (3, Insightful)

Artifice_Eternity (306661) | more than 2 years ago | (#36492532)

P.S. FreshDirect probably benefits from certain unique features of the New York City metro area -- not only the incredible density of the population, but the relatively low percentage of car ownership.

If my wife and I owned a car, we might go to the supermarket ourselves more regularly. As it is, we shop at various local mom-and-pop groceries ("bodegas" in NYC parlance) and a CVS drugstore that we can walk to in our Brooklyn neighborhood, and supplement that with FreshDirect orders every 2-3 weeks.

We have a couple of supermarkets within a 15-minute walk, but it's much easier to order the supermarket-type stuff for delivery.

There are very few places in the US with comparably low rates of car ownership. Even in other dense cities, it's much more common for people to own at least 1 car. Most of our friends in NYC (well-educated professional and creative types) are carless. Walking, public transit, and occasional cab use are more than adequate, and IMO, much preferable.

Re:It can succeed -- but it's a local business (0)

Anonymous Coward | more than 2 years ago | (#36493218)

There are also very few true supermarkets in Manhattan due to real estate cost and size constraints. The ones that do exist are plagued by weak selection and prices that are often double what you'd pay in the suburbs.

Re:It can succeed -- but it's a local business (3, Interesting)

drinkypoo (153816) | more than 2 years ago | (#36492540)

Many Safeway stores offer delivery. Not in my area of course, where we could really use it because it's the boonies, because, of course, it's the boonies.

Re:It can succeed -- but it's a local business (1)

darrylo (97569) | more than 2 years ago | (#36493488)

I just used the Safeway home delivery for the first time, a couple of weeks ago, and I'm happy with my experience. While the delivery charge was $7 (but can go up to $13 for a 1-hour delivery window or certain times of the day), I figured that the $7 was worth it for my time and gas. A big plus was that (in my area, at least) the delivery driver refused any tip, and so that makes home delivery fairly competitive with doing the shopping yourself. You do, of course, need to do a fairly large order to make this worthwhile.

The biggest con is probably that the selection is fairly mainstream, with only some ethnic groceries. Other, local grocery stores in my area have a better selection for some items. Example: there are some really good local bakeries in my area, and local grocers/delis sometimes carry this incredibly yummy garlic/cheese sourdough bread loaf, which Safeway just doesn't have.

Re:It can succeed -- but it's a local business (0)

Anonymous Coward | more than 2 years ago | (#36492652)

Who gives a shit - unless you live in one of the USA's urban areas. Most of us do not, or will not. (Put me in the latter category.) I actually enjoy going to the mega-mart every couple of weeks and stopping by the local store a couple of times a week on the way home.

Re:It can succeed -- but it's a local business (1)

rnaiguy (1304181) | more than 2 years ago | (#36492784)

Actually, most of us DO live in urban areas. http://www.fhwa.dot.gov/planning/census_issues/metropolitan_planning/cps2k.cfm [dot.gov]

Re:It can succeed -- but it's a local business (0)

Anonymous Coward | more than 2 years ago | (#36492884)

Most of us do not live in the downtownish part of major cities, we live in the outskirts, but still considered urban. Grocery delivery docent really work there.

Re:It can succeed -- but it's a local business (1)

Seumas (6865) | more than 2 years ago | (#36492904)

Good for you, but I don't care for shopping one bit. I consider it a waste of time. The women in my family really enjoy going to the mall and spending six hours shopping for shoes or even just shopping for nothing and just spending time looking around. I, however, do not. Instead of spending a bunch of time doing a chore that I hate, I spend five minutes doing it online and not thinking about it again and instead of spending time out shopping for shoes, I just go to zappos and spend five minutes buying a new pair of shoes or boots or slippers.

Hell, one of the reasons I hate shopping is people who go shopping with their six fucking children in tow. Now, imagine... what if those people with a brood of children didn't have to go to the store. They could make life easier for the rest of society and for their children and for themselves and I'm sure with so many children, they don't have a lot of free time in the first place. They could have their groceries delivered by the local store, too, instead of packing up their fleet of snots and having a huge inconvenient outing. If I had kids, there is no way I wouldn't use this service. It is fucking fantastic and I wonder how much longer it will be before home delivery transforms the grocery market the same way it did the computer market (that is, you know, how I can no longer find a real physical place to go buy parts to build a computer, because online options like newegg and amazon have pretty much pushed the physical stores out of the market).

Occasionally they'll deliver something that has a short expiration date or they'll make a dumb substitution of one product for another. That's inconvenient, but so what. *shrug*. I just tell them I don't want it and they don't charge me for it. Not a big deal.

Re:It can succeed -- but it's a local business (0)

Anonymous Coward | more than 2 years ago | (#36493026)

That is similar to Amazon. They have had their grocery business for at lest 4 years and have expanded from something like 1/4 of Seattle to 1/2 of Seattle.

Re:It can succeed -- but it's a local business (1)

Osgeld (1900440) | more than 2 years ago | (#36493054)

NYC is one of the few places it can succeed, in fact I would expect it to boom and not take years to meet demand so that kind of hints of what market your looking at

now move to the rest of the country, all of a sudden your not driving a few miles to fill hundreds of orders, your driving tens of miles though numerous towns just to deliver some potatoes and a gallon of milk

or in other words, it just does not make since for the majority

Re:It can succeed -- but it's a local business (2)

dsanfte (443781) | more than 2 years ago | (#36493134)

Just coordinate with the grocery stores. Half of them have delivery trucks already, I'm sure they'd love to have someone else handle all that for them, plus have a cut of someone else serving online orders. Why the fuck is this so hard?

Re:how many times (0)

Anonymous Coward | more than 2 years ago | (#36492520)

It will fail until the economy is strong enough for lots of people to spend lots of money on a "luxury" service like this one. Fifteen years ago, not enough expendable income out there. Now, unemployment notwithstanding, there's more. Lots of new services fail until the world is ready for them to succeed.

Re:how many times (2)

hedwards (940851) | more than 2 years ago | (#36492854)

It's not a luxury service. I know that the albertsons version they charge $10 for delivery or $5 for them to get it ready for pick up, but if you're able to work an hour you've just made back the cost. And that's even at minimum wage.

The idea that this is a luxury is really misleading as it ignores the things that one could be doing with ones time, including finding other ways of saving money which would lead to a net gain for the household over doing it yourself.

Re:how many times (2)

Seumas (6865) | more than 2 years ago | (#36492918)

Wait, what is the luxury part of having groceries delivered? All the stores I've ordered from have always charged $5 or $10. That's not "lots of money" when you factor in the fact that I don't have to use my car. Don't have to use gas. And don't have to spend an hour or two every week doing it. Fuck, it costs at least $5 in tips and fees just to have a pizza delivered.

Re:how many times (4, Informative)

vlm (69642) | more than 2 years ago | (#36492548)

Amazon.com is quietly trying to resurrect the failed business models of WebVan and HomeGrocer

aka the same successful business model of peapod.com. Talk about trashing the service by carefully selected comparisons with failures. Disclaimer, I'm a very happy peapod customer, although I haven't ordered recently. When we had two newborns, medical issues, and an utterly packed schedule, it was a lifesaver (maybe literally, in terms of food quality vs the alternative of pizza delivery every day or whatever). I also greatly enjoyed shopping online vs in the store because of the "log in and work on the order for 5 minutes each day" ability. Also the experience of shopping while reading a cookbook, or at weird times of day, was oddly pleasurable.

can this idea fail?

About as many times as mom and pop restaurants fail, superficially the number is about infinite. I suspect you can realistically raise capital to do about one every couple years, and it'll be economically feasible to use diesel delivery trucks for only another decade or two, lets say another 10 times.

Re:how many times (2)

cob666 (656740) | more than 2 years ago | (#36492888)

I used Peapod when I lived outside of Boston for quite a while. The service was excellent for staple products and the ability have saved shopping lists was another bonus. It was definitely worth the few dollars they charged for delivery. I only stopped using them because I moved to an area where the service wasn't available but over the last year I've seen several peapod trucks in the area.

Re:how many times (3, Informative)

Xest (935314) | more than 2 years ago | (#36492552)

Now, perhaps I'm missing something here, but I wasn't aware it had failed.

Is it's failure a US centric issue?

The reason I ask is here in the UK we've had home delivery for years, and pretty much every supermarket offers it.

It's highly succesful here and even Occado which is a home delivery only brand with no high street presceience I believe is even turning a decnt profit at last.

Perhaps companies in the US are just doing it wrong? I understand it'd be an issue in some parts of the US because of the distances involved, but certainly most of the UK is covered by such services and I see little reason why major population centres in the US at the very least couldn't have a similarly succesful model.

So is it just the US it's failed in? has it failed in other countries? In the countries it's failed in what were seen to be the causes?

Here's it's great, if you've got a busy week just order online during work and have it delivered in a 2hr timeslot such as say 8pm - 10pm one evening, even the next day, when you know you'll be home.

Re:how many times (0)

Anonymous Coward | more than 2 years ago | (#36492642)

Is it's failure a US centric issue?

The reason I ask is here in the UK we've had home delivery for years, and pretty much every supermarket offers it.

Even Asda, the UK part of Walmart, offers home delivery, which makes the lack of the service in the US seem pretty bizarre.

On the other hand, home delivery of groceries is apparently still quite unusual in Germany and France, so it might be less that the US is weird for not having it and more that the UK is weird for having it.

Re:how many times (3, Interesting)

vlm (69642) | more than 2 years ago | (#36492698)

Now, perhaps I'm missing something here, but I wasn't aware it had failed.

Is it's failure a US centric issue?

Early adopter anti-effect. The first delivery services were traditional dotcoms, in other words they (loudly) emerged, IPO'd, blew up, and sank, all in about 12 months around 1999. Early adopters make early judgments, therefore its set in stone that the entire market in 2011 is dead, because it died in 1999. So the opinion leaders think its a lead balloon and ignore it.

The masses just look at advertising budgets... the dotcoms spent most of their dough on ads, and failed. The current crop of (successful) delivery services are spending money on the backroom so that they actually work. However, if they only spend 1/100th the money on ads, then they can only be 1/100th as successful as the failed dotcoms, right, at least according to the masses. And the early adopters trash it (see above).

So growth is slow, yet seemingly inexorable.

Re:how many times (3, Funny)

drinkypoo (153816) | more than 2 years ago | (#36492724)

Is it's failure a US centric issue?

The only part of the UK with lower population density than the USA is the Pitcairn islands.

Re:how many times (1)

vlm (69642) | more than 2 years ago | (#36492890)

Is it's failure a US centric issue?

The only part of the UK with lower population density than the USA is the Pitcairn islands.

I donno about that. OP describes it as "UK" not downtown London.

I live in a rural / suburban county about 20 miles from "the big city" with 650 people/sq mile. Think of an environment of very small cities and villages surrounded by dairy farms, theoretically no one is ever more than one mile from a cow, etc. Wales only has 360 people/sq mile, per wikipedia. Wales population is about twice that of my county... so twice the people in half the density means wales is about 4 times the land area. Nothing ever happens in my county, then again, nothing ever happens in Wales, so far as I know, making this a fair comparison.

Of course there's only one Wales that you need to roll out to, whereas "the big city" is surrounded by bedroom communities like mine, and furthermore the US is full of cities like "the big city" so I'm guessing a "country-wide rollout" in the US would be about 10 times as large as a rollout in the UK.

Re:how many times (1)

maxume (22995) | more than 2 years ago | (#36493380)

My county has a density of 41 people per square mile.

That's in rural Michigan. Go somewhere where there are less people and it gets lower.

Re:how many times (1)

MobileTatsu-NJG (946591) | more than 2 years ago | (#36492760)

Is it's failure a US centric issue?

Size.

Re:how many times (0)

Anonymous Coward | more than 2 years ago | (#36492870)

Is it's failure a US centric issue?

Size.

Then a decently planned logistics solution and well placed distribution centers will solve that?

Re:how many times (0)

Anonymous Coward | more than 2 years ago | (#36493426)

Cities

Re:how many times (0)

Anonymous Coward | more than 2 years ago | (#36493504)

Subarbs.

Re:how many times (2)

mehrotra.akash (1539473) | more than 2 years ago | (#36492806)

I am not sure, but the difference between the way it works in India(though its on the phone and not online) and US, is that in India you call up your local supermarket/grocery store, and they deliver.

In US, you order from a company like Amazon, where Amazon needs to set up a seperate delivery infrastructure, which is not needed if you live within 15 mins of the supermarket.

Perhaps UK follows something similar to the Indian model and not the US model?

Re:how many times (2)

jimicus (737525) | more than 2 years ago | (#36492920)

Perhaps UK follows something similar to the Indian model and not the US model?

Sounds like it. You place your order through the supermarket website, it is passed to your local delivery branch (which is a perfectly normal supermarket that has a few refrigerated vans) which fills the order.

If your supermarket of choice doesn't have a delivery branch within range of your address (increasingly rare), then they won't take the order.

This makes rolling out such a system very easy. The branches already had computers that connected to head office; all they need is:

  • Some mechanism to ensure the store is notified of incoming orders.
  • A number of refrigerated vans & drivers.
  • Someone to pick up the incoming orders and walk around the store picking items off the shelf to fill the orders.

(come on, the /. CSS doesn't put bullet points on unordered lists?!)

Re:how many times (1)

ScottyLad (44798) | more than 2 years ago | (#36493210)

Sounds like it. You place your order through the supermarket website, it is passed to your local delivery branch (which is a perfectly normal supermarket that has a few refrigerated vans) which fills the order.

Correct in the UK for all the supermarkets (Tesco, Asda, Sainsbury's, etc) but not for Ocado.

Tesco do have at least one "picking centre" in South London (Croydon), although this is basically a supermarket with no customers - they still push trollies down the aisles to pick up whatever's on your list before sticking it in a van and delivering it somewhere fiarly local.

As far as I know, Ocado is the only one in the UK which has a fully automated warehouse, and near national delivery (they deliver as far north as Manchester and beyond from the Hatfield warehouse).

Ocado is a different model from either the supermarkets or Amazon, in that Ocado is basically a large distribution network (which happens to deliver groceries). When you order online, their system already knows which of their vans will be in your area, and adjusts the pricing for delivery slots accordingly.

Most of the London orders are taken straight from Hatfield to the customer in the delivery van, there are also some distributions hubs dotted around the country - if you're in Manchester, for example, your order will be picked in Hatfield, loaded on to the Manchester shuttle truck, then unloaded in Manchester on to a van and forward to your door.

I guess this model probably has an effective radius of around 200 miles per warehouse - so it could scale up to US sizes, but would need serious investment. Ocado are currently building their second distribution centre in the Midlands - probably more to do with demand than distance.

Re:how many times (1)

glwtta (532858) | more than 2 years ago | (#36493158)

Now, perhaps I'm missing something here, but I wasn't aware it had failed.

It hasn't, most metro areas are covered by services like Peapod and FreshDirect.

The submitter was being an idiot for no reason.

Re:how many times (1)

tsotha (720379) | more than 2 years ago | (#36493352)

Is it's failure a US centric issue?

Pretty much. The UK has 12 times the population density we have in the US. Not only are the customers further apart, but also almost everyone has a car. Home delivery can probably work in a handful of denser US metro areas (some of them already have it), but I'll be shocked if anyone ever makes it work in the smaller cities or suburbs.

Re:how many times (1)

DeathToBill (601486) | more than 2 years ago | (#36492612)

How many times can it succeed? Here in the UK every major supermarket chain has online-order-and-deliver models and they work out just fine.

Whether it makes sense for Amazon is less clear. As others have pointed out, books can be posted from a central warehouse while groceries need a local distribution infrastructure - hence why Amazon has only trialled this in Seattle instead of nation-wide. The supermarket chains have an established distribution network, and all it needs is a website and local delivery vehicles. Amazon also needs to put in place a whole new system of sourcing and distribution, and I can't see how they can compete with supermarkets on that.

Re:how many times (1)

vlm (69642) | more than 2 years ago | (#36492804)

while groceries need a local distribution infrastructure

You meant to write:

while FRESH groceries need a local distribution infrastructure

I would think a box of dried pasta and a bottle of pasta sauce could be mailed to me from south Dakota just about as easily as a SATA hard drive. The stuff that needs refrigeration already has a local distribution infrastructure that serves numerous (competing) retail sites.

I was tangentially involved in the "local distribution infrastructure" for in-grocery-store deli's about 25 years ago... Most of the stuff at a deli is delivered by a local with a truck who drops the same stuff off at every store, deli, and restaurant in the area. Needless to say the competing stores are not keen on publicizing that their coleslaw or deli-roast-beef is exactly the same as everyone else's product. Meat, bread, milk, beer, soda, junk food, pretty much the same situation. Produce was a sort of similar situation, I was never completely clear on which produce items came from central, like the grocery items, and which came from local delivery guys.

I always expected our local delivery guys would have a much more scalable experience pushing down to the individual level than international web-sales guys like Amazon, but the locals never even seem to try, which is kinda odd. Probably because our little grocery store had about a dozen very independent trucks delivering stuff per week. Of course amazon could probably contract with all dozen of them, and that Might be how they're doing it.

Re:how many times (1)

Seumas (6865) | more than 2 years ago | (#36492880)

How many times can it succeed? Here in the UK every major supermarket chain has online-order-and-deliver models and they work out just fine.

Agreed. Same in the states. I'm sure less populated regions have less likelihood of this, but since about 1999-ish, I have always lived in Portland, San Francisco, or Denver and since that time I have always been able to order groceries online. I don't see why people make such a big deal about it. It's the same food from the same stores and the same grocery chains that you'd be shopping at, anyway. The only difference is that instead of going to the store and bringing the groceries home myself, a guy comes to me from the store in a van and puts the same damn groceries in my kitchen.

Re:how many times (1)

hedwards (940851) | more than 2 years ago | (#36492826)

The idea didn't fail, the implementation did. The problem with Homegrocer.com/Webvan was that they tried to expand too aggressively. My parents got it a couple times, and it worked well.

The idea itself was really common in the US up until relatively recently when everybody started owning their own cars, grocery stores would offer delivery of any groceries you bought. Even today, I know of several local grocers that offer delivery, albeit for a fee.

Re:how many times (1)

Osgeld (1900440) | more than 2 years ago | (#36492922)

well there is a difference tween the country store and catering to millions of people in a region, thats where it fails every time

Re:how many times (1)

hedwards (940851) | more than 2 years ago | (#36493634)

Not really. It's not a tough thing to solve logistically. You need warehouses and a fleet of refrigerated vehicles. In the past it was tough to do, but if you've already got the supermarkets there, it's not much of a challenge logistically to pick up the groceries and deliver them.

Apart from the cases where they had a clearly inept business plan, I'm not aware of any significant failures. The service works more often than it doesn't if you plan for reasonable expansion, rather than trying to take over the whole country in one step.

A questionable business model, at best (0)

Anonymous Coward | more than 2 years ago | (#36492456)

This doesn't save you the time of shopping, as you still have to select what you want. It's not convenient, as you have to select a delivery time that you know you'll be home, or risk having your ice cream sit on the outside step melting. It can't be much cheaper, as most grocery stores already run incredibly thin margins. And with Whole Foods and Trader Joes every other block, it's not difficult to hunt down hard to find artisan/imported foods.

So explain to me why anyone would intentionally get into this business? Who is your target audience?

Re:A questionable business model, at best (1)

morgan_greywolf (835522) | more than 2 years ago | (#36492496)

So explain to me why anyone would intentionally get into this business? Who is your target audience?

Reclusive, eccentric former dotcom millionaires. Who else lives in Seattle?

You are wrong (1)

FranTaylor (164577) | more than 2 years ago | (#36492542)

"This doesn't save you the time of shopping, as you still have to select what you want"

Huh? Do you actually grocery shop? Do you really understand where they put everything? Let's say you are looking for beans. There are beans in 5 different aisles in the store, are you going to pick the right aisle the first time?

"risk having your ice cream sit on the outside step melting"

Well clearly you haven't used one of these services either, because they don't deliver frozen goods.

"It can't be much cheaper, as most grocery stores already run incredibly thin margins"

Well it IS cheaper for many items, so what does that tell you? Their margin on some items is indeed low, but on specialty items, spices and such it is really quite high.

"And with Whole Foods and Trader Joes every other block"

Umm I live in the most densely populated urban area in the whole country and I still have to either drive or take the bus to the nearest Trader Joes or Whole Foods.

Re:You are wrong (0)

drinkypoo (153816) | more than 2 years ago | (#36492754)

Well clearly you haven't used one of these services either, because they don't deliver frozen goods.

I must have hallucinated all those Schwan's [schwans.com] trucks.

I live in the most densely populated urban area in the whole country and I still have to either drive or take the bus to the nearest Trader Joes or Whole Foods.

Those aren't even the most serious objections. Whole Foods has the worst grocery prices in the USA. Trader Joe's, meanwhile, has slashed quality over the last couple years. We used to go there monthly, now we go maybe twice a year and buy some sesame crackers. We don't even go there for beer any more since we have a good retail distributor called Bottle Barn that sells premium 22oz beer for about $4-5.50, and has similarly lower prices on other kinds of booze as well. If you shop at either outlet you're being taken advantage of.

Re:You are wrong (0)

Seumas (6865) | more than 2 years ago | (#36492856)

If you're talking about ordering your groceries through the mail (which kind of really *does* sound like a hassle), then yes. However, if you order groceries from a service in your city - say from your local grocery chain - then of course they deliver everything. They won't deliver if you aren't home, but you can order any fruit, veggies, pet supplies, kitchen supplies, cleaning supplies, food, frozen food, refrigerated food, or even alcohol.

I wouldn't shop at a Trader Joes or Whole Foods, even if they were right next door, though. I eat like a human being. I'm not a hipster. I'm not going to pay $5/lb for "organic bananas". The 25c/lb regular old bananas are just fine for me. :)

Re:A questionable business model, at best (1)

CSMoran (1577071) | more than 2 years ago | (#36492578)

This doesn't save you the time of shopping, as you still have to select what you want.

You've got to be kidding. Once I switched to online groceries, it takes me 15-25 minutes to do shopping for the next 10 days. Your shopping history is remembered, so it only takes longer the first time. I don't know where you live, but it'd take me 15-25 to get to and from a supermarket, never mind the time it actually takes to go through the place and then queue.

It's not convenient, as you have to select a delivery time that you know you'll be home, or risk having your ice cream sit on the outside step melting.

That's true, but I bet there's at least one 1-2h slot in any week you (or someone else) is there to pick it up.

It can't be much cheaper, as most grocery stores already run incredibly thin margins.

True. It's not cheaper.

So explain to me why anyone would intentionally get into this business? Who is your target audience?

Because it's profitable, thus there's enough audience?

Re:A questionable business model, at best (2)

Adam_ST170 (762793) | more than 2 years ago | (#36492738)

So explain to me why anyone would intentionally get into this business?

Come to the UK and you will see that most of the major supermarkets offer this service.

A company called Ocado have been doing this since 2002 and dont have any physical stores, everything is picked from a central warehouse.

Tesco's largest stores will have around 4 or 5 vans that will deliver your order meaning your order wont come from a central warehouse but from a store that is closest to you. They even have a iPhone app that lets you scan the barcodes of the products you use to add to your basket.

Who is your target audience?

Everyone who shops for groceries who might want them delivered.

Re:A questionable business model, at best (2)

Seumas (6865) | more than 2 years ago | (#36492822)

You must do your shopping at a 7-11, because when I was growing up, trips to the grocery store were usually weekly and the time between stepping out onto the driveway and coming back home and unloading the groceries into the kitchen was easily up to two hours all around. Not to mention writing down the shopping list, etc.

I have never gone grocery shopping in my adult life. For twelve years, I have used the delivery service available in my city (pretty much all the main grocery stores like Safeway, Albertsons, Kingsoopers, etc offer delivery unless you live in the middle of nowhere). While it was an enormous chore, growing up, it is a five minute process as an adult. I literally log in to the website, click the button that adds my regular list of groceries, make any tweaks I want this particular delivery, select a window when I want the delivery (I can choose a 30m window or a 2hr window -- seven days a week -- from about 8am to 8pm).

You clearly have never even used it, either, because of your whole idea that "you'll come home and the ice cream will be melted on your steps". That's why you have them delivered when you will be home. Also, they don't deliver if you're not there. Duh.

I have no interest in shopping. It's a chore. It's a hassle. It's like going to the dentist. It is an inconvenience that most would rather do without. As much of that time a I can regain for myself, the better. Even if I just waste that time. At least it's my option. After twelve years of having groceries delivered in three different cities and states, I would never ever consider going back to the whole traditional shopping experience of my parents and grandparents.

Also, having groceries delivered makes a car much less necessary. I telecommute. And I have my groceries delivered. I'm used to an even bigger city with bad traffic, where a car is more of a liability than a convenience, so if I can avoid all that and have someone just drop them off in my kitchen, that's pretty awesome. I now use my car so rarely that I'm considering selling it.

Re:A questionable business model, at best (2)

shutdown -p now (807394) | more than 2 years ago | (#36493052)

This doesn't save you the time of shopping, as you still have to select what you want.

There is a big difference between doing so by walking around the aisles with a shopping cart vs clicking on pictures on a website.

It's not convenient, as you have to select a delivery time that you know you'll be home, or risk having your ice cream sit on the outside step melting.

I'll just quote AmazonFresh FAQ:

What is Pre-Dawn delivery?

Pre-Dawn delivery is an early-morning delivery option. If you choose this option, we will leave your items on your doorstep early in the morning, prior to 6:00 AM, so they're there when you wake up. Your groceries will be kept fresh in temperature-controlled totes, so frozen items stay frozen and chilled items stay cold. Our other Doorstep Delivery services work just like Pre-Dawn--we'll leave your groceries on your doorstep in temperature-controlled totes. You don't even have to be home!

It can't be much cheaper, as most grocery stores already run incredibly thin margins.

Not much, but still.

Also, from "conscious consumer" perspective, hauling a bunch of food in a single truck to many homes is more energy-efficient (i.e. "green") than many people each driving a car to the store to get their own part of that food.

UFCW get off your ass (1)

For a Free Internet (1594621) | more than 2 years ago | (#36492464)

And unionize Amazon's warehouses!

Re:UFCW get off your ass (1, Insightful)

Anonymous Coward | more than 2 years ago | (#36492522)

why? so we can subsidize the pension of some high school dropout box-monkey making 26$ an hour while I work my ass off?

fuck unions

Maybe things aren't the same in all countries (0)

Anonymous Coward | more than 2 years ago | (#36492512)

In the UK, ordering groceries on the internet for home delivery is part of every supermarket's business, and there's at least one company I can think of (Ocado) that has no physical stores at all. WebVan's failure says nothing about the business model, which is hardly a complicated one, just that at that time, that company could not make it work.

Wasn't this tried before? (0)

Anonymous Coward | more than 2 years ago | (#36492550)

Ok so what is different this time from the 10 year ago model?

They have money?

News? Amazon's been testing Amazon Fresh since 07 (2, Interesting)

Anonymous Coward | more than 2 years ago | (#36492558)

Amazon has been testing their home grocery delivery service in Seattle since 2007. Initially it was for Amazon employees only. But it's been open to Seattle residents for years. I've been using it since probably 2009. So what's the news here?

Bwuh? Old news? (3, Informative)

oGMo (379) | more than 2 years ago | (#36492644)

This has been running for nearly FOUR YEARS [seattlepi.com] . Way to be on the ball, slashdot editors. And as it's still running after four years, it isn't really all that failed now, is it?

Re:Bwuh? Old news? (1)

zill (1690130) | more than 2 years ago | (#36492814)

For absolute hilarity, imagine slashdot editors delivering groceries.

Re:Bwuh? Old news? (1)

93 Escort Wagon (326346) | more than 2 years ago | (#36492862)

For absolute hilarity, imagine slashdot editors delivering groceries.

Cowboy Neal delivers my groceries, you insensitive clod!

Re:Bwuh? Old news? (1)

tsotha (720379) | more than 2 years ago | (#36493386)

And as it's still running after four years, it isn't really all that failed now, is it?

Well that depends. You can offer pretty much any service you like as long as you're "tinkering" and willing to lose money. If, after four years, it's still not making money then yeah, "failed" is probably the right way to characterize it.

Veggies (1)

Anonymous Coward | more than 2 years ago | (#36492670)

Part of the problem is with fruits and vegatables. When I used Webvan in 1999-2000, they had the absolute best fruits and vegatables. However, that is actually a problem. Because consumers believe they can pick good fruits and veggies when at the grocer, any place that does it for you must stock a consistently higher quality of perishable items so that consumers are disappointed with what they get. Because you have to stock the higher quality of fruits and veggies, you profits margins go down because you can't charge more for the "same" product.

Re:Veggies (1)

Anonymous Coward | more than 2 years ago | (#36492850)

In the UK, we have solved the vegetable problem by organic farms offering "vegetable boxes". Essentially they offer a small range of boxes, each of which will have whatever is in-season and available on the farm. From picking to the customer typically takes a day or so, compared to a week or more via the supermarket. You just have a "standing order" for whatever size box makes sense for your household. The one we use ("Riverford") also offers extra items that can be added to the weekly order.

Two things (2)

dargaud (518470) | more than 2 years ago | (#36492710)

When webvan went under, I remember some grandmas who lamented its demise, saying it was the only reason at all that they used internet at all...

And fresh food delivery is a proximity service. There are plenty of no-name who've replaced webvan with success. A colleague buys from the local supermarket via Internet. He says it's very convenient: there's a list of recurrent products that you setup once and when you order you can always check them off and add whatever else you want. He says that his weekly internet shopping doesn't take more than 5 minutes. Going to that supermarket in the flesh is a strange experience: there are more teenagers running through the aisles like crazy to fulfill the web orders than there are live customers.

Re:Two things (1)

tsotha (720379) | more than 2 years ago | (#36493404)

I was tangentially involved in the first wave of grocery delivery services, and from what I could tell they ran up against a huge problem with unprocessed meat and vegetables: they're not uniform like processed foods. Sure, if I order the same brand of salami I'll probably get the same thing. But when I buy a steak I want to look at it and see if it has the right color and the right marbling. The same goes in spades for fish.

Well, if anyone can do it... (1)

MaxBooger (1877454) | more than 2 years ago | (#36492746)

If anyone can make this work, it would be Amazon. They have, in their own way, been as influential in the tech arena as anyone these last few years. Figuring out the logistics of home grocery delivery should be doable for them.

Re:Well, if anyone can do it... (1)

rkww (675767) | more than 2 years ago | (#36493588)

No the problem's not delivery, that's well understood. The problems's relationships with suppliers, which for groceries is essentially farmers. In the UK, as several people have mentioned, all the big supermarkets do home delivery. And they all have close supplier relationships. To keep prices down they prefer to deal directly. See for example http://www.tescofarming.com/ [tescofarming.com] There might be space for another one, but the competition's fierce - here's a selection of major chains which already have fully debugged delivery chains: http://www.tesco.com/groceries [tesco.com] http://groceries.asda.com/ [asda.com] http://www.sainsburys.co.uk/groceries [sainsburys.co.uk] http://www.ocado.com/webshop [ocado.com] (Note that Asda is owned by WalMart and that WalMart and Tesco are the first and second most profitable retailers in the *world* measured by profits.)

Convenience versus cost (1)

hamburgler007 (1420537) | more than 2 years ago | (#36492766)

I am single and live in nyc. In the past I found fresh direct as a very convenient way of being able to get quality groceries at a specified time rather than having to go through the chore of going after work to a supermarket with inferior produce, only to have to carry back a shitload of bags. I haven't used fresh direct for around a year though, as their prices have gone up to the point where it simply isn't worth it. I imagine I am not the only person who makes a modest salary who has done the same. I haven't researched it, but I'm curious if fresh directs business model has proven itself to be sustainable, and if so can that business model be sustained with competition.

Re:Convenience versus cost (1)

hedwards (940851) | more than 2 years ago | (#36492900)

Most of the local grocery stores that offer that service do it for a fixed fee or free with a minimum order. Sort of the pizza delivery model. I don't know the pricing structure for all of them, but Albertsons offers two levels of service, home delivery for $10 and pick up for $5, which is actually a pretty good deal, depending upon your situation. You can often times use that time to work or cut costs in other areas, yielding a bit of savings.

For parents in particular being able to pick up the kids an hour earlier would make this a bargain at twice the price.

How is it a failed business model? (2)

Seumas (6865) | more than 2 years ago | (#36492770)

The submission is positioned as if the idea of delivering groceries is a concept that has repeatedly failed. I'd like to know what justification there is for that statement. Yeah, Webvan/Homeshop and Peapod seem to have failed years ago, but I and plenty of other people have been ordering our groceries online from Albertsons, Safeway, and Kingsoopers for at least a decade, now. When I lived in San Francisco, I used Webvan in the late 90s. When I moved back to Portland, I used Albertsons and Safeway until the mid 2000's. And since I've moved to Denver, I've used Kingsoopers for the last six years.

If Amazon can do a great job, I'd consider using them. I'll at least give them a shot. But the idea that delivering groceries is a dumb one is just absurd. Not every experience over the past dozen years has been perfect, but the few problems I've had here and there with Safeway/Albertsons/Kingsoopers are far outweighed by the fact that I don't have to set aside a couple hours a week to drive to the store, find parking, get a cart, go up and down the aisles, deal with people and their tantrum-throwing kids, wait through lines, load up the car, come back home, unload and put away the groceries. All I have to do is click a button that adds everything from my list to a cart, make any changes I need, click a button and then my groceries will just magically appear - delivered right into my kitchen - in a 30m or 2hr window of my choice. I literally spend around five minutes per week dealing with groceries. Period. It's fucking fantastic.

Re:How is it a failed business model? (2)

vlm (69642) | more than 2 years ago | (#36492972)

Peapod seem to have failed years ago

Reports of their demise seem to be greatly exaggerated. Did they pull out of your county? I know they roll out on a county by county basis, never heard of them pulling out of a county before. They're still willing to deliver to me, anyway.

I don't have to set aside a couple hours a week to drive to the store, find parking, get a cart, go up and down the aisles, deal with people and their tantrum-throwing kids, wait through lines, load up the car, come back home, unload and put away the groceries.

The only thing worse than dealing with other people's tantrum throwing kids is dealing with your own tantrum throwing kids...

My favorite part of the peapod experience was spending 5 minutes each day optimizing my weekly order, right up till the night before delivery. Needless to say, I never had the experience of forgetting to buy an ingredient. The other part you missed was shopping with a cookbook in one hand and a mouse in the other... making the total a little higher than normal because its easy to get a little ambitious while reading a cookbook. On the other hand I also shopped with the ipod and the peapod app in hand in front of the refrigerator, so I rarely bought stuff I forgot I already have, and I never bought impulse items.

Also I've never heard of a service that puts away the groceries for you. Peapod piled the bags on my kitchen table and I had to take it from there. You're still stuck with that task. And the virtual shopping cart is bigger than a real shopping cart, so you can really buy a lot of stuff if you're not careful.

Re:How is it a failed business model? (1)

darrylo (97569) | more than 2 years ago | (#36493276)

But the idea that delivering groceries is a dumb one is just absurd.

Delivering groceries is not absurd, but the infrastructure needed to support this is likely absurdly expensive. Existing grocery chains like Safeway have a huge advantage in that they already have most of the infrastructure needed to support home delivery (and, as you know, Safeway already does this). For them, it's probably just a matter of creating a web storefront tied into local inventory, and hiring some delivery drivers/stockclerks.

(Side note: Amazon probably needs to resolve the internet sales tax issue, before doing a wide-scale rollout. Otherwise, it'll probably be impossible for Amazon to use the "pull-out" threat.)

Ice-cream? (1)

Flipstylee (1932884) | more than 2 years ago | (#36492878)

Well, at least if it comes two days late like my last order i can have a milkshake while i post my review...

Everything old is new again (2)

93 Escort Wagon (326346) | more than 2 years ago | (#36492908)

We live in a fairly rural area of western Washington state, and we subscribe to a home delivery service offered by a dairy - something that's been going on in the US for probably a century. The products they offer are somewhat limited - the usual eggs and milk, butter, sour cream - but they do carry a few "extras" like whole bean coffee and cookie dough.

I know a number of competitors have died off over the past couple of decades - Smith Brothers seems to be the last man standing in this area. For now they apparently are doing okay. But part of the reason they are still around is their prices are somewhat high. We think it's worth it, since the quality of their products is superb - but for most people price is paramount. They don't care that the grocery store's milk is watery and has a funny aftertaste, as long as the price is low.

What I would like to see (3, Interesting)

physicsphairy (720718) | more than 2 years ago | (#36492914)

It would be great if we could do away with purchasing things in bulk, i.e., buying a full bottle of a specialty spice even though you're just going to use half of a teaspoon of it, and instead just receive exactly what you need in general purpose containers (saving also the hassle of measuring it yourself). Especially as someone who likes to cook gourmet, I like to buy ingredients as near to when I'm using them as possible.

We could have "one-click recipes" where, instead of spending time locating ingredients, people can share their purchase orders with the associated recipes so anyone can get everything they need to duplicate it with a single mouse click.

Getting things to order, and in exact quantities, could also avoid the energy waste of everyone owning large personal refrigerators and freezers, besides avoiding the cost and environmental impact of fancy packaging, etc.

It becomes increasingly sensible the larger the scale of customers.

Re:What I would like to see (1)

Anonymous Coward | more than 2 years ago | (#36493170)

They would charge a fortune for this. It isn't going to happen. Go compare the cost of a single potato to a bag of potatoes. Go compare the cost of pre-cut watermelon to a whole watermelon. People can only afford to do this so much, not for everything they buy. If they were going to charge you $4 for half a frozen pizza, or $5 for the whole one, which would you buy? Most people would rather buy the whole one, and cut it in half themselves. Look at milk. The price difference between quarts, half gallons, and gallons are very small. Why would you want to pay $0.79 for the 1/3 cup of milk you need, when you can buy a whole quart for $1.39 or a gallon for $1.89, or whatever milk costs.

As a single person I would love the ability to buy things (especially specialty ingredients) in small quantities, but I know that the price would be too high to indulge in that more then once or twice a year. Try to make a whole dinner like that, and it would have been cheaper to buy it from a restaurant. If it costs just as much to have three eggs delivered to your house as it does to go to the local diner and get three eggs cooked up, then I'd just go to the dinner.

Re:What I would like to see (0)

Anonymous Coward | more than 2 years ago | (#36493428)

It would be great if we could do away with purchasing things in bulk, i.e., buying a full bottle of a specialty spice even though you're just going to use half of a teaspoon of it, and instead just receive exactly what you need in general purpose containers (saving also the hassle of measuring it yourself).

Are you for real? So instead of selling that tub in one size which can sit on the warehouse shelf, you now have to create an area where you have to weigh out all the different weight options of spice that people want... thats going to be cheap.

Getting things to order, and in exact quantities, could also avoid the energy waste of everyone owning large personal refrigerators and freezers, besides avoiding the cost and environmental impact of fancy packaging, etc.

How many permutations are you going to offer? The list could be endless. And will you then have to buy a smaller fridge for these 'exact quantities'?

It becomes increasingly sensible the larger the scale of customers.

Unfortunately, I dont think it does.

Not new... (0)

Anonymous Coward | more than 2 years ago | (#36492930)

They've been doing this in Seattle for years. This isn't like something that's just begun. Ask someone in Seattle about it!

Hard drives and beer (0)

Anonymous Coward | more than 2 years ago | (#36493204)

The most awesome thing about Amazon Fresh is that they have a pretty good selection of electronics, and they can be delivered along with a cold six pack by the next morning.

I'd do it in a hearbeat- (1)

purduephotog (218304) | more than 2 years ago | (#36493236)

Heck, I'd even do it if I had to drive to a local spot and pick them up. Why? Because I'm sick and tired of having to goto one local store (Wegmans) with their idea of sale prices - 2 for $5....

Let me order or queue what I need during the week and I'll decide when to go get it. No lists, no coupons.

Relay Foods (0)

Anonymous Coward | more than 2 years ago | (#36493366)

We've used a service in the Charlottesville, VA area called Relay Foods [relayfoods.com] that offers free pick-ups from hubs or for-fee home delivery. I believe they've also recently expanded to Richmond. One of the nice features is their inclusion of locally produced goods that can be difficult to find or obtain in area stores. We've been really happy with our experiences thus far.

While Charlottesville does not have the population density of NYC, it has a strong food and farmers' market scene that is likely responsible for its success here. So I don't know if this is a model that will necessarily transfer to other areas. Relay has recently expanded to Richmond, so it will be interesting to see how well it performs there.

Gopher! (1)

osu-neko (2604) | more than 2 years ago | (#36493396)

You can't resurrect what hasn't died. WebVan and HomeGrocer may have gone belly up, but Gopher Grocery's been doing it successfully, and growing, for years...

Amazon Tests a Home-Delivery Service For Groceries (2)

Siggy200 (721326) | more than 2 years ago | (#36493514)

In the twin cities of St Paul/Minneapolis have Coborns Delivers. Very good service for $5.00 each delivery. The truck delivers once a week, if not home and there are items that are frozen or need to be kept cold they pack the frozen items in dry ice and then a compartment with dry ice to keep other items cold. Also there is a liquor delivery service, Merwin Liquors that will deliver for free with limitations. Also local tobacco store will deliver a carton of cigarettes for $5.00. I don't use either the liquor delivery or cigarettes but the Coborns Delivers was nice when I didn't have a vehicle and the weather was cold.

god i hope this pans out. (1)

yodleboy (982200) | more than 2 years ago | (#36493618)

The only thing i really miss from the dotcom era is HomeGrocer. I used it every week for as long as it was available in DFW and loved it.

I don't really know, but I always thought it was the delivery side of things that killed it economically. I'd settle for local pick up points. Place order online, show up when it's ready and grab your stuff. Still a huge time saver. Would love to see a local store offer this, have a couple of people prep orders for you to pick up at the store.
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