Webvan, 20 years ago, had the right idea - don't pick from retail stores, use a proper fulfillment center. But they had 3% market share in 30 cities, instead of 30% market share in 3 cities, because their VCs thought the "first mover advantage" was crucial. So they had too much infrastructure for their volume.
This approach is much more expensive in the U.K. at least - I’ve done these sums for retailers (I’m a logistics consultant who specialises in e-commerce and grocery) and it’s hard to make a distribution centre cost competitive if you have an established store estate that you don’t want to get rid of.
In short, a distribution centre gives you:
* improved pick efficiency (depending on the level of automation), offset somewhat by maintenance costs and the cost of capital.
* increased delivery/transport costs (stores are generally closer to the customer than the cross dock point / outbase, vehicles are already going to the store for the main delivery)
\ flowing more product through existing retail points reduces waste (expiring products).
* increased property cost (you have to pay for a distribution centre at c£9 per square foot incl rates etc, while in retail the space is more expensive but you are already* renting it).
The one thing a fulfilment centre does give you is better service though. You can hold more range, better track dates/batches so you can give your customers the expiry dates on the website and increase availability.
So the honest answer is that delivery from a central point isn’t a slam dunk, and can definitely work but probably won’t be cheaper.
You see all this with Ocado in the UK, right? Distribution centres only, so great range, and a brilliant app … but as I understand it they make most of their money selling tech to other retailers.
Does the loss of normal customers factor in the calculation?
Tesco are the biggest grocery store in the UK and their from store fulfilment is beyond annoying for me. So much so that I avoid shopping with them now.
I'm guessing stores in the UK tend to be smaller. In-store distribution is mildly annoying in US supermarkets but no more so (in fact less so) than stocking that blocks aisles is.
Much more, since you have to navigate around 2 to 6 fulfillment trolleys in every aisle, as well as the usual restocking trolleys and random staff walking around and not appearing to have any purpose.
Which indicates fulfillment is best done by a company whose primary business is fulfillment, not brick and mortar retail. This is a classic disruption scenario.
I don't read that at all. I read it as there are pros and cons and, in practice, the relatively limited grocery delivery/pickup that happens seems to be from B&M stores. I expect that any delivery/pickup businesses that didn't thrive in the past 18 months aren't going to.
Not really - centralised distribution doesn’t mean it’s best done by a company whose primary business is fulfilment, and in fact most major supermarkets have the in-house capability to run these depots by themselves if they want to (for e-commerce grocery specifically there are advantages in running yourself).
While I never ran the numbers, that was my conclusion as well. Cost wise, use your existing retail infrastructure. It is easier so, to set up a separate fulfillment flow for home deliveries. It's a trade of, like always.
This is starting to change in the UK as the proportion of customers ordering online keeps increasing, for example Tesco have started setting up "Dotcom centres": https://www.tescoplc.com/news/2013/tesco-opens-sixth-grocery...
(of course that's best of both worlds, fulfil from your existing stores until the demand justifies a dedicated centre)
Don't they already have distribution centres? When covid started, some local store chains just started supplying consumers from the same distribution chain through which they (re)supplied all the many small stores they had.
Not the parent poster, but a distribution centre for stores has a different function to a distribution centre for individual customers. The former is about getting whole boxes of products onto large trucks to deliver to stores, the latter is about getting individual items from inside those boxes into bags in vans for individual customers. For that you need a different warehouse layout and many large businesses won't have that space available for the scale they need.
Click-and-collect from supermarkets' existing stores is likely here to stay. It's very appealing for people on strict budgets, because you don't get to the cash register then realise you have to put things back.
However, any retailer with existing stores wants to operate click-and-collect from those, as if you realise you forgot something on your order you'll go into the store.
> Click-and-collect from supermarkets' existing stores is likely here to stay. It's very appealing for people on strict budgets, because you don't get to the cash register then realise you have to put things back.
People on strict budgets typically also need to stretch that budget as far as they can; they likely can't absorb the markups on each item that pays for the in-store shopper to collect them.
on an item where quality parameters vary so much ( size, visual shape, ripeness etc), customers will not give up the value of touching and picking an item.
This applies to a cabbage or a fish.
In the case of a pair of socks which are standardized, they may not care as much to physically pick up stuff.
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I have always thought that the disruption to costco would be an online warehouse, that could gather the customer's preferences ( patterns of buying - and consolidate them and send them to localized centers ).
Customers can then pick them up or have them delivered.
Discovery will purely be through the web.
I'm certain they will, at least here in Sweden. We have bought most of our groceries online for years. It is worth quite a bit to not have to use half a Sunday to drive to a big ugly supermarket surrounded by a huge parking lot and then run around trying to find whatever that isn't where I expected it to be.
It isn't common in the UK, where online supermarket shopping has existed since about 1997. (And not as some obscure thing, the biggest supermarket launched it then.)
Over 20 years later, this still happens to me every time I ever buy root ginger.
I always want a lump / knob / finger / whatever of ginger, and without fail forget that the unit of measure is a kilogram, which would take me months to get through.
How much is the scenario helped by significantly reducing the number of SKUs? e.g., customers are choosing from two toothpaste options rather than 10+?
If a shopper wants milk, bread and scented candles, and you don't sell scented candles when your competitor does, they'll go to your competitor for candles and pick up their milk and bread at the same time.
So if you want to get a customer's main weekly shop, you can't cut your range too far.
Of course, there's a space in the market for gas station convenience stores with a smaller range, higher prices, great convenience and no aspiration to get the customer's main weekly shop.
I would say that a primary difference is the investment runway the successful players have enjoyed. Some of them are still not objectively profitable to this day, but their massive topline revenues, scales of operations, and levels of name recognition makes many of them remain attractive investment targets nevertheless.
> I would say that a primary difference is the investment runway the successful players have enjoyed.
No. The market size expanded exponentially for each of these opportunities - changing the economics of the business models and making them viable at scale.
The internet was nothing in the 90s. A place for mostly nerds in first world countries.
Today we've connect 4 billion+ humans around the world.
For better or for worse. When you say "connect", that means get them in front of a couple of hundred platforms (globally, comes down to couple dozen in the west) to transact on and generate revenue for those market players. It's like we took the 32bit color animated GIF internet and made it a 128 color static PNG of mostly similar shades of 10 colors.
> No. The market size expanded exponentially for each of these opportunities - changing the economics of the business models and making them viable at scale.
Maybe. Labor in China and the Chinese market absorbing inflation also helped.
My expectation is grocery delivery just barely missed the boat, because of import malfeasance crackdowns since April that is affecting everything.
Actually it reinforces that the idea actually is the easiest part of the equation. Execution is the key and the winners are the ones who executed the best. You can't compare Webvan to Amazon.
Amazon ended up owning and operating Webvan.com.[1] The people who developed Webvan went on to develop Amazon Fresh.[2] The founder of Kiva Robotics, which was acquired by Amazon, was from Webvan. Amazon's grocery business is directly descended from Webvan.
Yes, it was a descendent. Instacart is a descendent of Webvan too. The idea is the same but Amazon already had preexisting technology and market dominance. You can't compare Webvan to Amazon.
That might be a factor, but given that they all failed at about the same time I think there's a good chance that timing is just as important. Adding billions of people to the internet and mass adoption of smartphones may have been necessary precursors to the success of Amazon/Facebook/Google/Uber.
I remember in high school learning how to build little websites and thinking, “it sure would be cool if we could build a little online yearbook for our school! Everyone could have their own little profile page!”
Did you also think “l can then use their personal information to target ads and make $billions!” I wager you did not, because you’re probably not as depraved as some.
Doesn’t even feel like some of these were necessarily ahead of their time, almost like investors didn’t take as many risks as they do now with burn rate etc. of course, the dot com bubble burst in a bad way, so perhaps this theory isn’t very sound
The model that I think is going to work would be the equivalent of traderjoes.com
TJs apparently does not want to do it. It makes no sense to package items to be placed on shelves and then have people go pick the items off consumer shelves and deliver. There is so much vertical optimization that could be done.
I switched to FreshDirect during the pandemic, and I am probably never going to depend on a large grocery store again. FreshDirect is my weekly delivery, and the nearby bodegas have what’s needed when I need a couple things.
Every large NY grocery store consistently seems to have either poor-quality or extremely expensive produce, which was drastically exacerbated last April: if you don’t go soon after they stock, people pick over, scratch and generally take all the edible-looking choices. Whole Foods was terrible for delivery: the pickers seemed to just choose what was available, which inevitably tends to be what in store shoppers left over. I’d much rather on average get an average apple or onion, without having to spend time figuring out whether it’s “good”: average is almost always good enough.
My total time spent grocery shopping went down, while the quality of the food went up. Their website does a really good job of focusing me on what’s fresh, in season, and otherwise likely to be good this week, and it seems like there’s a lot less waste in this model. I can also order more than I can walk home myself, which is pretty valuable when you don’t own a car.
The situation is completely reversed outside of a NYC like dense area where everyone has cars. Once you have a car, it makes economic sense to use it and you will likely drive near a grocery store at some point in the week. The grocery stores are also not constrained on space so the quality is much higher and rent or land costs less so prices are lower too.
Although, I do have to say grocery stores in London and Toronto were much nicer than NYC in my experience, so it may be a cultural/customer demand thing too.
+1, I've been very impressed by FreshDirect. I have a Morton Williams across the street (crowded, bad produce, iffy selection) and a Whole Foods around the block (pretty nice, but long lines and I didn't really want to go in before vaccination), but FreshDirect has just worked.
Their site and app are glacially slow, though. Not sure what's going on there. And for a while they've had some text-entry glitch that reverses text every now and then. But that's just griping.
Also, with kids it's nice having the weekly 3-4 gallons of milk just show up rather than schlepping them home from the bowels of Whole Foods.
I've gotta say, groceries in NYC seem uniquely awful. We stayed with friends in Greenpoint for a week and it was grim. The supermarket that was around was dire, the bodegas were fine, but really expensive for not great quality or range, and then you could walk half an hour to Whole Foods in Willamsburg, which was eye-wateringly expensive and rammed.
Compare this to where I live in a London, which is a similar PT distance to central London as Greenpoint. We do all our shopping at a brilliant greengrocer just the round the corner, there's specialty delis and such in walking distance. There's also a number of Sainsbury's and Tesco locals. Then, about 25 min walk away, there's two major supermarkets (a Waitrose and a Morrisons). I guess people in NY don't cook?
Amazon Fresh does really well in NYC, has been a positive experience except that their baked goods are frequently sold out. Wal-mart wants you to go out to one of their stores to pick things up - great strategy in a city where nobody drives. Target’s master strategy wavers between being out of everything and not telling you they can’t deliver something until you try to check out. So I’ve mostly used peapod to purchase items from Aldi - that has been the most reliable way to get groceries delivered.
> I've gotta say, groceries in NYC seem uniquely awful. We stayed with friends in Greenpoint for a week and it was grim.
What you experienced are the fruits of gentrification in NYC. Greenpoint is an overpriced neighborhood which used to be a Polish enclave (still is to a degree but on life support from what I see). People down there shopped at local ethnic markets, many of which are gone due to gentrification which drove real estate prices through the roof.
Young people and/or "up&coming" neighborhoods in NYC in small apartments (ie - Greenpoint, Bushwick, E Village, etc).
Go to UWS/UES/Greenwich Village and you will find very nice, very expensive, very overcrowded groceries.
I recently needed to buy a propane heater. Ordered it online for pickup at Walmart because there was only one left in stock.
Showed up at the Walmart thinking I could just pick it up right away. Turned into a huge big thing. The staff only goes around 1-2 times a day to fulfill these sorts of orders so I would have ended up waiting.
I ended up buying the last one on the shelf, which was mine anyway, and cancelling the online order. I wonder what would have happened if someone else bought it first.
I see this more as iterating on an idea to provide this service, and what I experienced, is the MVP.
WalMarts inventory system preemptively orders based on sell through rate, on-hand, and historical trends. Backroom stock is logged so a pick order can be fired when shelf count gets too low.
Source: worked in a few Walmart back rooms picking and binning among other things. The was about 8 years ago so things are likely a little bit different. Hopefully better since shelf max counts were always way off or we'd get flooded with freight and lose stuff in the bins.
I order for pickup all the time nowadays, at various retailers (Walmart, Target, Home Depot, Walgreens, Staples), and I have only had 1 time I can recall that one of the retailers reported they did not have the item I ordered. I must have picked up at least a 100x by now, and I feel like as long as I wait for the email that says it is ready for pickup, I am good to go.
I actually order online for pickup to ensure no one else buys it if there is only a few of the item in stock.
Why is a real fulfilment centre better? I can see an Amazon centre with robots etc being more efficient, but other warehouses seem no more efficient than going through shelves at a walmart.
I would think there might be lots of reasons, but one that comes to mind is that supermarkets are physically designed to get the customer to spend as much time and money as possible in the store as opposed to finding the items on their list(s) as efficiently as possible like a grocery delivery service would want its workers to be able to do.
Amazon just recently started to use robots. Most existing operations still use physical labour. FCs are more efficient, as single entities, because they are designed as such. They have proper infrastructure, tools, people, processes.
For grocery fulfillment, I don't think they are better at scale. Because they are for from the customers, they are not everywhere. Existing stores, so, are there. They use established replenishment from existing warehouses. Which means you have to use existing staff and store processes (and software) to fulfill orders. Which is hard. So it's either expensive or hard to do (which could expensive in itself). Over simplified.
Supermarket floors aren't designed for pick and pack efficiency, they're designed from the ground up for phycological manipulation.
Warehouse trumps Supermarket for efficiency by multiple factors easy.
Just as an example imagine the 50 most ordered items. I can put these in a tiny area closest to my packers in a warehouse. How far to you think you'd need to push a cart between those 50 points in an average Walmart?
A good fulfillment system tracks its inventory and communicates with the ordering system, so you can't order items they can't deliver. That's the big problem with ordering online from grocery stores - about 80% of what you order shows up, which is a headache for both buyer and seller.
Mostly because markets deliver a less consistent experience (delays, cancellations due to vacations), and you face situations where your employees and customers are fighting over the last bag of chips. It also becomes harder to plan logistics because most stores (at least where I live) have limited real estate.
The semi-automated ones have different issues. Only Amazon really has the tech fully figured out to a degree where issues are resolved almost instantly. Amazon can also use less but larger scale fulfillment centers because they deliver mostly small objects at an arbitrary time, whereas you can't leave 6 bags of groceries at a front door.
So, is this just a HN thing (since engineer/STEM salaries are higher than the usual population) or do a lot of people order groceries? I've looked several times, and I couldn't figure out a way to get groceries to my house from either of the local grocery stores (one is about five minutes away, another is ten or so) without paying 30-50% more than just driving to the store myself (and that's assuming you have a big order, if you just need some extra burgers at a party it could be up to double what it is in the store).
Instacart has a bunch of fees, I'm pretty sure Publix has a fee on top (although I'm not certain), you have to tip the driver, and you'll get it hours after you order vs just running to the store and getting whatever it is you need and driving home. And the prices are inflated slightly. Even if I was super busy (or getting paid more money than I knew what to do with), that's a lot of money vs just stopping in on the way home from work or running once on the weekend.
I've been doing grocery pickup with Superstore (large Canadian chain) for a few years now. It's $5 per order, or $100 a year to be an "Insider" member which gets you some other benefits.
Originally we started using it because grocery shopping on the weekend with our son was a terrible experience for us. Trading the extra time and hassle for paying $5 to just pull into a parking spot after work and have it delivered to my trunk was well worth it for us. Prices match exactly what is in store (they ring it through the same system,) and tipping isn't allowed.
If it were just my wife and I, or if I was single, I don't think I'd use the service, but for my current situation it's great. They also offer delivery for an additional cost, I don't know how much it is, but I do know some people who have mobility issues who enthusiastically use it.
I always assumed that, at least pre-pandemic, the primary use case was either people with young children or people who could easily drive but aren't very mobile on foot.
A number of years back when I was on crutches for multiple months, I got grocery delivery which was a mixed bag. I'd probably have used pickup if it were available. I could actually get around a grocery store fine on crutches. I just couldn't easily buy more than would fit in a shoulder bag.
So, is this just a HN thing (since engineer/STEM salaries are higher than the usual population) or do a lot of people order groceries?
I live on the East coast in an apartment building, and from talking to neighbors and seeing the trash room, I'd say it's not just an HN thing (Whole Foods/Amazon Prime, Drizly, UberEats, Postmates, FreshDirect, Peapod, etc.).
that's a lot of money vs just stopping in on the way home from work or running once on the weekend.
If you don't have a car/license (or access to a car like Zipcar), it can be hard to get to a grocery store in person.
I wasn't thinking about not having a car (which is funny because at college I borrow a car, but I also don't have a kitchen so...), but that's a good usecase.
> Whole Foods/Amazon Prime
Does Prime make the fees for grocery delivery get much smaller/go away? There's a Whole Foods in my area but it's 20 minutes from my house so I didn't even think to look there.
How far away are your grocery stores in a city? I've always lived within a walking distance to a grocery store, also when in a town of under 10k people. Currently I live in a major European city and have at least seven grocery stores within one kilometer radius.
That is not how American cities work at all. They are built for cars, and residents who can't afford cars have a significantly worse standard of living and access to food.
There's a convenience store (Walgreens) a couple blocks away; the closest grocery store to me is a 25 minute walk, but mostly highway/no sidewalk. I did it once when I first moved here but ended up getting an Uber back. There isn't public transit that stops there. Before here I lived in downtown Boston, and that was very convenient for walking to markets.
Before COVID I was remote but took a cab to an Amtrak for an 8 hour round trip once a month to the office. But yea I've been working from home for 18 months now..
Most grocery stores that offer their own delivery services do so for much cheaper than Instacart: they charge normal prices for items, and put all the delivery costs in the delivery fee where it belongs. For example, using Kroger's delivery service instead of InstaCart can be nearly 50% cheaper even before customer-card discounts because (a) Kroger charges the same price for items as you would pay in-store (and will offer sales prices if available), (b) Kroger generally charges a fixed fee for delivery, and (c) uses employees in locations where delivery is offered. The caveat is that most grocery stores have smaller delivery radiuses than Instacart.
Edit: Kroger owns a lot of chains; some of the chains might mark up prices on delivery items a bit, but the stores I have used do not.
Be careful with that. Wegmans (using Instacart) has different per-item prices for pickup/delivery than if you picked yourself in-store. Sometimes it's substantial.
> The highest markup of an item was 733%. To put this in perspective, if that item had been $10, I would have been charged $83.30 for it.
> Another item was marked up 220%. This item cost $4.68, I was charged $14.99 for it, and if I look in the Wegmans website that item is listed for $8.04. How can they arbitrarily charge more than the actual listing on the website? How can they charge almost 3 times more than the actual cost?
I order online for pickup through a service called Peapod (the "good" grocery store close to me is a Giant, which I think purchased Peapod at some point or at least has an exclusive partnership). I don't mind paying slightly higher prices, but I don't think they are. The pickup fee is also extremely reasonable, just a few dollars. But this is always for next day or even later in the week. I did fajitas and sides for about 15 people for a birthday party a few weeks ago and put the order in a week prior to pickup.
My question is, are people really order this stuff for pickup or even delivery and expecting someone to immediately run out of a back room and start filling the cart? I don't see the benefit to the store in offering "speedy" grocery delivery. Running out of food at home is rarely a surprise, and we're at a time now where it's no longer unsafe to go into the store even in urban areas. I'm not going to order from a different grocery store because they can have my order ready for pickup an hour sooner than a better and/or closer one.
It's like a $10 delivery fee plus tip for me using Kroger. Assuming I'm ordering plenty of groceries I easily save that much in gas and time. And as far as I can tell, there's no hidden fees and items cost the same if I were to buy them in the actual store.
My local supermarket (Shoprite) charges just $5 to order online and pick it up yourself. The only issue, which is better now, was that during the height of the pandemic you had to book your pickup time a week or two in advance.
In Mexico we use Cornershop (LATAM company acquired by Uber recently). The prices are 2% higher than in store but sometimes it has of offers on many products that makes the total cost even lower than in the store.
Got COVID recently so I was forced to use it and had the best experience so far. 5 minutes to place an order. I gladly tip $10 to someone who needs it (keep in mind the minimum wage in Mexico is like 4 dollars per day). And I save 1 or 2 hours of my time that I could read, work, exercise, practice an instrument etc.
Agreed. The one time I used it and it made sense was being home sick with kids. It was a life saver to be able to have everything delivered in that case.
I'm still not convinced this whole business of grocery delivery/fast food delivery is even a viable economic model. The value add is so tiny relative to the costs involved. An actual human being, A, must be paid to drive down to a store and deliver something for B who is too lazy to get off his couch for a burrito. The only way that would work is if A is being paid the bare minimum or if B has plenty of cash to spare. Even then, whatever value the middleman captures is supposed to fund this billion dollar startup with armies of engineers and office space and the works. I dunno, seems a bit wonky to me but maybe I'm just old fashioned.
It is misleading to bundle grocery delivery with fast food delivery.
Grocery delivery is done with trucks fully loaded with orders and an optimized route for fuel efficiency.
It is actually much more energy efficient to package 40 ppl grocery orders in _one_ 4.3 tonne 10' truck, and make an efficient delivery route, than to have 40 people drive to their grocery store in an empty 3 tonne vehicle.
I am not sure what the situation in the US is but realistically in Europe if you have a big enough family online grocery shopping is a no-brainer.
I only shop physically for very specific perishables like bread, fruit, cheeses. Have been doing it every since our family grew and our time, mental bandwith, and lower backs decayed.
Put it in another way, if I wanted to buy apples of X variety and I got to the supermarket and those apples looked crap I just wouldn't buy them, I would buy some other fruit or come back another day.
However online, if I ordered x and they have in stock then they have to fulfil that order, even if the apples look like crap.
I am not really sure you could improve this unless you had some form of back and forth comms between you and the warehouse.
At Coop in Sweden, I can buy a fruit box or a veg box that is a somewhat random assortment of produce, though there tend to be some constants. This is what we have done. I have rarely bought specific fruits or veg for pick-up orders, though not never.
Thats what branding is for. A company puts their name and logo on it, and then also sets the quality standards.
Cheap brands might have lower standards than premium brands. The company makes sure the stores uphold the quality standards, and stop selling through stores that hurt their brand.
> I don't blame the store workers or anything. Usually even things are mostly fine (e.g., not bruised, over/under ripe, etc). But sometimes ...
Hmm, apart from the "but sometimes...", your comment did make me realise that this might be a reason why it's more viable: produce that is fine but would get left behind in the supermarket (e.g. curved cucumbers, the last crop of lettuce, ...) would no longer have to be thrown away but actually gets bought.
>I am not sure what the situation in the US is but realistically in Europe if you have a big enough family online grocery shopping is a no-brainer.
If you're in the US, and within 15 minutes of a Costco or other similar wholesale store, I cannot imagine paying someone to do that legwork would be cheap enough to be worth it for anyone who is mobile and has a car. My kids also love going to the grocery store and interacting with people. But mostly, labor is very expensive, and if I am doing grocery shopping for fruits and vegetables and dairy (which I want to pick myself), then the rest of grocery is 100 feet away so I might as well do that too and not pay someone else to do it.
For the "classic" grocery delivery, where you order once every 1-2 weeks to get all ingredients you need, I totally agree.
Recently in larger cities in EU there's been a sudden rise of "10 minutes delivery"-style apps like Gorillas, Flink or Getis. These companies are more like food delivery.
> deliver something for B who is too lazy to get off his couch for a burrito
That's a pretty judgmental view for the service. Try these for B:
- a mother with limited transport options
- a disabled person
- a covid isolating person, or generally a person not feeling well and not wanting to infect others
- someone with surprise visitors coming next day, trying to fit in shopping, organising the house, other tasks
- or simply people like me who make a choice between spending an hour a week doing grocery shopping, or spending that time with family. (Although I get an option for pickup rather than delivery so I'm going with that)
How is that different from literally any other e-shop experience? Do you always go to a Main Street shop to buy everything, or do you order things online?
Groceries are just another commodity sold online. And the "value added" is not exactly tiny.
Your assumption that home delivery does not add much value compared to driving to a mall and carrying your purchased stuff back home rests on a lot of assumptions:
a) you can drive and have a working car at your disposal,
b) you have no other duties, such as caring for young kids or a bedridden person, or you can afford paid help,
c) you are fit enough to carry the stuff you bought,
d) you are not contagious, or you trust your immune system enough to interact with contagious strangers; this is not just a covid thing, even a "good" flu season has some mortality,
e) there even is a suitable mall in your proximity.
And another perspective: maybe driving to a mall and back is virtuous in your book, but it almost certainly isn't as eco-friendly as home delivery. A small truck carrying groceries for 20 families does not burn anywhere as much gas as 20 families driving their sedans to the mall and back home. Its route will be more efficient and only one living person, the driver, is being carried around by the car, not 20+.
Groceries can have expiration dates you might want to check, and produce and fruit quality that varies. Or frozen food that you might not be sure of how long it's been sitting outside of the freezer.
Also, there are so many grocery stores (where I live at least, and in all suburban US areas I've been in), that you must be driving by one at some point in the week. The transportation costs are nil, so the only difference is the time you spend in the grocery store. Which is also very low if you're familiar with the store.
Therefore, the only missing variable is how much you trust the worker that is walking around picking things up, and for me, that is very little, especially if there is a price premium with picking up a grocery order.
> An actual human being, A, must be paid to drive down to a store and deliver something for B who is too lazy to get off his couch for a burrito. The only way that would work is if A is being paid the bare minimum or if B has plenty of cash to spare.
I don't see why it has to be viewed in terms of such extremes. It's just a simple calculation of B's time versus their money. B is probably an actual human being too, so would need to drive to the store and back themselves. Maybe they prefer not to. The entire economy works this way.
I don't want delivery, I want to order online and pick up my goods already in a bag.
I have been using this heavily because we moved during the pandemic, and IKEA only offered such a pick up service (called "Click&Collect" in Germany). A supermarket here also offers such a service. It is extremely convenient and time-saving. Previously, a trip to IKEA usually took an entire afternoon, which is tiring especially if you have children. With "Click&Collect", you spend 30-60 minutes on your couch, reading product reviews, and you can directly measure whether some piece of furniture fits into your apartment. Pickup then usually took 5-10 minutes, everything is already on carts, you just have to load it into your car.
You don’t need a refrigerated van if you’re driving your one order straight home from the market. We didn’t even AC in the cars when I was young and it was fine. Refrigerated vans are a solution to a problem largely introduced by the use of refrigerated vans for delivery of multiple orders.
I think it's really unfair/strange to clump together grocery delivery with fast food. They are not at all the same, I mean sure both get you edible stuff to your home, but that's about it.
We're a family of four, and we do get home-delivered groceries weekly now after a year of Covid and really trying to minimize time spent in stores. Doing the order is easily an hour's worth of clicking, checking fridge/freezer/pantry/elsewhere for what we need, trying to remember if we missed something or if there is some non-food item that we can get delivered at the same time (think diapers, paper towels, toothpaste, whatever) and so on.
Fast food delivery we never do, it's way too expensive for the value-add, and just way more rare as a thing (buying fast food, that is). When we buy pre-made food (WFH lunches when kids are at preschool), we always to go and get it ourselves.
Maybe not in the US? I mean here in Israel app-based grocery delivery to the home has been a thing since 2014. The price has been a constant (30 NIS ~9) and it's provided by all the chains. The difference is the model.
Here, warehouse stores do them - meaning someone doesn't run around the store looking for products. The same person might get 15 boxes of cereal for 15 different orders and put one in each bag - rather than one person pick the entire order. The stores are profitable and tonnes of people do this. Anecdotally 100% of the people I know rely on this, with maybe 10% of those people being in tech.
We also have an entire industry of two grocery chains where people do their own shopping, take full carts (unpaid) to the back and then have the items delivered later, which allows people to take public transit, amongst other things.
I don't know, whether it is viable. But it is not just for the lazy. I have been using grocery deliveries once or twice a month for years mainly because I don't (want to) own a car. For me it is not about cash to spare, but just a tradeoff what I'm spending it on. What made me to a degree stop using these services is the race to the bottom that the startups in this space have started.
I have been doing online grocery shopping for longer than pandemic. I don't want to waste my time going to a store, filling my brain with useless trivia with where items are located and then spending rest of the time gathering said items.
It can mean I am lazy, or I can use that time to do some other work I enjoy. Doesn't matter, because I don't really care if someone random judges me as lazy.
I also order in all my food and hire a cleaner for my home once a month. I don't own a car, I either rent a car using apps or order a taxi.
All of this has won me so much money and time. Some of the most valuable things for me besides other elements like health.
So for me it is astounding how someone can't see value in those things. I am so thankful for these things and services existing, every day. They have given me so much time to do whatever I want.
I'm not sure grocery pickup falls into this category, but there have been a lot of "businesses" over the past few years where, even though the workers are barely making minimum wage, the real cost premium is above what mainstream consumers are willing to pay. They've been being subsidized but that's obviously not a long-term solution.
Exactly. The model of delivery would only start to really make sense with A being an autonomous robot. Or if inequalities keep increasing between the rich B and the poor A.
If using Instacart, consider switching to your local grocer's delivery service instead. It's kind of wild how many people in Texas used Instacart and never knew that H-E-B had their own delivery option. There's generally far less markup for similar service, although the real-time conversation Instacart allows with your shopper is nice. Not nice enough to justify the mark ups for routine shopping, though, IMO.
HEB does curbside service, but what is their delivery service? I’ve looked, and I haven’t found anything. I’d love to use them instead of InstaCart, but so far as I can tell, there is no such option available to me.
This, in Austin, TX, or all places. The HEB “Tech Hub” is here, so we should be the first place to roll out a service like that.
On their main page, where it says, "Curbside at your location" in the top right, click that and select delivery. Like another poster mentioned, it may not be in your city. More than likely if you're in Austin, it just isn't in your area.
H-E-B's headquarters is actually in San Antonio, where I live, so they may have more options available here. They don't advertise it a ton, but they actually hire a bunch of developers here in SA as well. I don't have the numbers, but it wouldn't surprise me if it was a 50/50 split between the two cities. My husband works as a developer there at their HQ in San Antonio.
I’ve been buying groceries twice a week online from various U.K. supermarkets for well over a decade. Not everything always works - I remember a time in 2006 when they didn’t turn up in the prescribed slot, we left the house then they phoned irate when they arrived 90 minutes after the end of the delivery slot. Obviously there can be substitutions too, sometimes they’re fine, sometimes they aren’t
But on the whole of just works. Even at the start of the pandemic when demand was high, regular customers like me were prioritised. The impression I get is this isn’t the case in the US?
Yeah it's so weird seeing americans treat this as some kind of Hard Problem when it's been part of our daily life for 15+ years. Like the healthcare debate with less politics. "kroger should buy some vans, hire more people, and start a website" is pretty much the end of it. (I assume krogers is a supermarket)
>Yeah it's so weird seeing americans treat this as some kind of Hard Problem when it's been part of our daily life for 15+ years
As a non-American who is disproportionately aware of US culture and issues even though I've only been there a couple of times, I think it's part of a general pattern.
My pet theory is that the combination of the USA's size, relative geographical isolation, historically strong economy, and youngish history have led to a critical mass of its population being completely unaware that there are certain things that can be done differently and arguably better, as they are done elsewhere.
Most of the developed World is composed of either small neighbouring countries between which ideas are more easily shared, countries with long histories and limited resources that have had the need to improve their efficiencies and learned from their pasts, or countries who had to make concerted efforts to either become develop or recover after catastrophic war. Meanwhile, the population of the USA (and to a lesser extent Canada, and maybe Australia and NZ) has had little exposure to alternative ways of doing things, and no motivation to do so—everything is fine.
Off the top of my head, I can think of the following things that are done better outside the US but most Americans are unaware that alternatives are even possible: e-payment methods and cheap bank transfers, home insulation, vote counting, prices including sales tax, intersections (roundabouts vs 4-way STOPs), electrical plugs, kick-resistant front doors, punch-resistant interior walls, toilets that don't need a plunger handy, SSNs not being a de-facto immutable password, etc.
I've sometimes been tempted to compile a detailed list of articles on each of these things on a blog, but not being American I feel it would be very unfair and would seem gratuitously condescending on my part. I hope this doesn't come across as dismissive or an attempt at a flame-war, it's just my observation. I have nothing against the USA, and I am absolutely not implying that no good ideas come from the USA! Many great ideas were born in the USA, and are then adopted or adapted by other countries. The difference is that the flow doesn't seem to go the other way.
I am glad you picked things that affect all of the US and not things that only work in dense areas. Since at least some of those dense area issues are [half] solved in the east coast and SF/the valley get so many things first.
Public transport isn’t amazing between Boston/Montreal to Philadelphia/NYC to DC. However i still get a bit shocked when I go to places outside cities in parts of America where even buses are scant. Forget any other type of public transportation. Even Amtrak barely has any routes.
Nyc is the only city in the world with proper 24/7 subways. I have had the opposite experience of being surprised how bad the times are for subways in major cities across the world. 24/7 isn’t needed, but it’s surprising how cities stop public transport [relatively] early. My experience may be out dated now. East Asia was the worst when it came to this so maybe Europe isn’t so bad in this reheard.
I think NYCs metro only works 24/7 because there’s enough 4 track to allow two tracks to close for maintenance overnight. If you don’t close a stretch of track how do you maintain it?
"punch-resistant interior walls"
This one is always so funny to me. Coming from the EU, I don't even have a "punch the wall" reflex baked into me, at all. Punch the screen, throw my phone, sure, even though I don't do it.
From a former line of work, many US friends used to punch their walls from time to time. None of my EU friends ever even tried or came close to.
I did my first online delivery grocery purchase in 2006 in America. It’s a huge place. Can’t lump us all together.
Another example. I don’t believe I’ve seen a gun in my life (at most one time) except in the holster of cops. I will sometimes come across conversations where people call out others as frauds etc if they don’t know or understands guns. As if that’s something all Americans are familiar with.
Same here, also in UK, but exclusively with Tesco - the whole thing runs like clockwork!
Back at the start, I used to get all sorts of bizarre substitutions, but now I can't even remember the last time I got anything random.
My only real beef is that the grocery pickers don't always pick the best perishable items - for example, sometimes I'll get herbs that are already starting to rot, or ginger with mould on it. It's rare enough that it's not a big issue, especially given the benefit of not having to spend time doing the shopping in person.
Oh, my other beef, with Tesco specifically is how CRAP and primitive their website is. It's so embarrassingly slow - every.single.action takes multiple seconds to complete. Thankfully the Android app is much better, and very recently they have finally started to improve the UX a bit.
I tried doing online deliveries while at university back in 07-09 and found the whole ordeal so rubbish that i've never gone back to it even during the pandemic. Glad to hear they smoothed it out a little.
I wonder if the US is better or worse for using middleman start-up services where as picking nad delivery here is traditionally done in house.
I once ordered black pudding and received a two pack of chocolate sponge puddings. I think it was Tesco. That was genuinely funny though, and in all my experience has been good.
Also, call me a frugal jerk, but I spent about 2 years adding dots to my Gmail address to get £15 off as a new customer offer every time. It got a bit awkward when the same delivery driver had to give me the 'new customer' spiel and said he was sure he'd been here before.
The big two supermarkets in Australia use tablets attached to the trolley so the picker doesn't have to carry the PDT with them. The pickers, delivery drivers are all employees of the supermarkets. In areas where they have enough customers, they have 'stores' that are only for online fulfillment. You have to reserve a time slot, usually closer and more convenient equals more expensive. I once price checked the groceries compared to a receipt from shopping in person, and there was a 5% markup on items that weren't on promotion. You can 'click-and-collect' to save on delivery fees, but you still need to reserve a time slot well ahead, during the lock downs it wasn't unusual to have to book a week out.
I worked in a DC for one of the supermarkets and the pick rate is closer to 200 cartons per hour. Cartons contain multiple units and can be pretty heavy depending on the product. It's not for everyone, even with incentive paid on top of a healthy union wage, most people would quit after a few months. The good pickers made it look easy. Some had been working there 10, 20 years.
Why I won't order dairy/produce/meats/frozen food online: while I'm shopping I'll often see a stack of order boxes with perishable and frozen items slowly saunter through the non-perishable isles - either the picker is ignoring the process, or there isn't one!
Plus, I always check to ensure I pickup the longest expiration date possible... pickers I would imagine would do the opposite (i.e. get rid of the store's oldest stock first).
> pickers I would imagine would do the opposite (i.e. get rid of the store's oldest stock first).
Maybe if they worked for the store, but why would they do that if they worked for an independent service with ratings and customer support?
Personally, my experience even with first-party shoppers is that they seem to select for good quality. I've never gotten unpleasant produce or near-expired items. I'm sure it happens, but I'm also sure it produces plenty of support calls.
I've gotten spoiled or damaged stuff when doing curbside pickup at Target. But it is also pretty easy to get a refund if you click a few buttons in the app and attach a photo. My guess is that in this case, the pickers are optimizing for throughput and not going out of their way to pick better or worse items.
can confirm. I work in a store doing picks. We are all students and generally do not care. If customers aren't looking food + product is being thrown into a cart haphazard.
There are a few of us who care a bit but not many.
Luckily work for a store that is too inept to track our performance.
I can only imagine that this gets worse when employees are monitored.
I used to pack shelves for a supermarket and I believe at the time (~15 years ago) we had a two hour window in which perishables could be out of the fridge. Usually we'd wheel out pallets from the stockroom fridge or freezer onto the floor, move all the boxes off the pallet into their rough locations on the floor, and then pack each box into the fridges sequentially (effectively batching up the sorting/locating/carrying work). If stock sat on the floor without getting into the fridge for more than two hours, or in the rare occasion there was a power outage and the fridges or freezers were out for more than two hours, stock had to be written off.
All that to say the allowed timeline might be longer than you expect (or desire)!
I still want a way to access grocery lists and prepopulate my cart with those items or the nearest equivalent
Just like with grocery delivery apps, people were dismissive of the reality where such low effort would be involved and yet in some areas there are only food delivery shoppers anywhere to be seen. this will also be a hit
Recipe blogs can allow the users to auto populate their carts on Amazon or other common grocery delivery apps that interface with their local area
The nutrition bloggers can just share their entire shopping list for one-click replication
People that dont find the discovery aspect of shopping entertaining at all can still have all of the upside without resorting to those prepackaged-meal-but-pretend-to-be-a-chef startups
Full disclosure, I work for Walmart in IT and specifically several components for the Online Grocery product.
Ask and ye shall receive. Buzzfeed's Tasty and Walmart have an integration that sounds like what you are looking for. Build a grocery list manually as well as from recipes in the Tasty app. Then when you "checkout" in the Tasty app it'll pre populate your grocery list in the Walmart app. You also select which Walmart you are shopping at so it shifts some of the items around to match like substitutes for what the recipe calls for.
I would love to see Instacart shoppers banned from grocery store main areas and instead use a coordinated pickup system out of sight, where they wait longer, have worse picks, and the grocery can do more organized stock providing. Instacart shoppers are a nuisance, they leave carts full of items in the middle of isles while they stare at their phones to try to figure out the item they need to find next. They block fish/meat/deli ordering as they try to figure out what the customer asked for. As someone whose main option for food is regular grocery runs, I want stores to be optimized for people like me, not food delivery.
I'm a creature of habit in a small town, so I hadn't used pickup any before I saw someone jogging through a local big box store with a cart full of totes and knew I didn't want to use it.
It seems, uh, unlikely that the stores would try to build a system where the worker gets paid for the time that the customers save.
We have started shopping at Walmart again for groceries. I just won't take the time to walk in and fight through the crowds. If I can pick it up heck yes.
My personal favorite is order pickup from Home Depot. I think I’ve saved hours of time. Both from not searching through aisles to find what I want (which never seems to be where it’s supposed to be...) and because when something is not actually in stock, you don’t waste a trip to find out.
Doesn't Home Depot show the stock levels for each shop on their website?
Just yesterday I wanted something from a Danish equivalent (Silvan). The website said the nearest store to me had 8 in stock, so there's little chance they'll be gone by the time I get there.
Home Depot’s site will tell you the location in your store down to Aisle and Bay. It’s very rarely wrong in my experience. I have experienced out of stock (when claimed to be in stock, presumably due to shrinkage in the store).
I just ordered 3 items for in store pickup today from Home Depot and one of them was wrong. That is going to cost me another 40+ minute round trip that I wouldn't have had to make if I would have just gone inside and picked the items myself. There is 0 chance I will be ordering groceries online in the next 10 years.
Then you get to play the "how and why was it wrong" game. Was the image online wrong? Did the pick the wrong item? Did the UPC code mis-scan?
In my case, it seems like the manufacturer was sloppy and put two different incompatible versions in the same bag. The one I got wasn't even sold by that company. Possibly in a production line change switchover.
No mention of Amazon Fresh at the end when talking about groceries creating dedicated fulfillment centers? Amazon already does that and it works very well in my opinion. Out of all the delivery services I’ve used they have the best prices, most consistency (no mistakes or substitutions for me so far), and best delivery.
The biggest issue for most people would probably be that the selection isn’t on par with a regular supermarket. It’s still a wide selection, but by the very high American standards of having 600 different kinds of cereal it isn’t up to snuff. Since I mostly buy unprocessed food it’s not an issue for me but it could be for others.
Sometimes I go on the Amazon FC subreddit just to get a window into what working in Amazon is really like. A lot of people seem to actually prefer picking for Fresh as long as they don’t have to pick in the freezer. I don’t see a lot of complaints about throughput. It just feels like a much more sensible model than to pay third parties to run through crowded stores picking things - plus as someone who really hates substitutions, knowing they have Amazon’s warehouse software keeping track of their stock is nice.
Part of the problem is that supermarkets are designed to pessimize picking efficiency while fulfillment centers are designed to optimize it. Maybe “pessimize” is too strong a word, but a supermarket wants to route you all the way around the damn store just to buy produce, meat, milk, and bread just so you have to see all their promotional end cap displays and maybe wander down an aisle or two. And since it takes so much time to go grocery shopping, you don’t have time to actually cook that same night so why not pick up a hot chicken dinner while you’re there? On your way out you have to stand in line surrounded by tabloids, women’s magazines, candy bars, gum, maybe some cold drinks.
It’s a good hustle and I don’t really begrudge them at all, but it’s diametrically opposed to the goals of efficiently fulfilling e-commerce orders.
Yeah this is exactly what I’m thinking - they want to maximize the time a shopper spendsin the store while Amazon wants to minimize it. Also supermarkets have their own stockers who have to spend time turning labels, unwrapping things, organizing them on shelves. And they deliberately understaff cashiers causing people to wait (notice how you’ll always have to wait in line when shopping unless you go very late/early when there’s often only one cashier). It’s just not efficient
I haven’t encountered this yet but it could be a regional/luck thing. I do imagine Amazon has worse (for the customer) incentives to dole out nearly expired or unsightly produce than third party supermarket pickers.
This is frequent result of when two completely independent decision chains meet but are drastically different in every other way.
The method by which grocery stores layout items can have a lot of per location variation or in other works per location knowledge.
Sure most store changes have it figured out for normal items but like the arrival notes, seasonal and temporary items often have incorrect information.
Even worse is when the normal stock location e.g cold beer in the beer isle is limited in capacity so overstock(?) is put in other locations that differ day to day, location to location. Good luck knowing that the overstock location for beer is the soda isle but also sometimes the seasonal area during any holiday or sporting event.
The other side of the decision process, are the companies doing these apps which optimize for every variable, make every picker 100% replaceable. It would be interesting if they could incentivize pickers to learn a handful of stores inside and out.
In India, Amazon owns a retail store chain. And does the ordering really well. I'm happy with it.
Other standalone supermarkets recieve orders through whatsapp, and deliver to doorstep. This is convenient when you know what you need. If needed they call you back to clarify .
Why is this still a gig-economy job with pickups in regular stores (anywhere)? It's not like when I order books from amazon that some guy runs an errand to a book store.
When I order food online it gets picked like an amazon order in a large warehouse fulfilment center. An online-only groceries store doesn't need parking, signs, price tags, nicely stocked shelves and a lot of other things that drive up cost. They just need a huge selection and they can sit in an industrial area.
Obviously no one will just magically create these warehouses but his is a business that has existed at scale for a decade or more, the pandemic didn't exactly come as a surprise.
Sitting in an industrial area makes for large distances from where people actually live. For fast delivery times, storage needs to be decentralised. Newer delivery services promise "under 10 minutes" as your delivery time, see Gorillas [0] for example. They do so by storing items all over the city and delivering by bike.
That seems more like a service for ”running errands” for which it makes perfect sense.
I usually have at least 24h advance on the services I use (not even in the same city) and the delivery isn’t free until you reach around $70 so I usually do a week’s shopping which is around $200. The prices are also ~20% over store prices. But this business model is wildly successful it seems. Unsure if it would work in the US where customers are more used to cheap services though.
Maybe I'm weird about how I shop, but online grocery ordering never made sense to me. If I'm picking out meat and produce for the week, I want to see the dates/ripeness and good deals before I decide what to get, and then plan meals around that. I tried delivery (Kroger) a couple times last year, and it was pretty rough--multiple packages of meat that expired that day, bizarre substitutions (canned green beans instead of frozen spinach), and a bag of completely unrelated stuff that we think belonged to someone else's order. And on top of all that, it cost more; I don't get it.
I used Peapod a ways back and dropped it as soon as I got off crutches for pretty much the reasons you give. I suspect that home delivery for a lot of people is a combination of 1.) food is fuel so they don't really care about the details; 2.) Grocery shopping is a pain because of mobility issues, young children, etc. and 3.) They resent spending the time shopping because #1.
It’s so easy in Singapore that I’ve become lazy. Even tho I literally live on top of the super market, I still order my groceries… delivery is free, I don’t have to deal with crowds, I can take my time, pick my delivery slot.
Ocado in the UK have really been clever with the way they've done it via automation rather than people. Worth reading about, I do wonder when they'll make a profit though...
What i noticed in my country (South Africa) that recently had a mini-explosion in online-groceries systems. Is how terrible their "search" is.
Many of these companies are "traditional" brick-and-mortar stores and although they have lots of I.T skills, it seems there is very little digital-product skills. Like Solr/ElasticSearch/App-Dev etc..
It doesn't really matter what the customer is willing to pay. Its all about how many people are willing/able to do the job vs how many people need the job done.
If you offer to pay 10x the price but the company is still able to find someone at the same pay, the company or management will take the extra.
No, what I’m calling into question is that 10x wages for employees results in a 10x premium for groceries. Wages are not that high a component of consumer price.
Another tongue in cheek way of responding to GP would be that we should pay JavaScript developers $12.50 an hour with no benefits.
