Amazon to Launch Online Grocery Store 260
Aryabhata writes "It might sound like a bad flashback to the dot-com days, but news is that Amazon is planning to test the waters with an old idea; the online grocery store!. To its defense Amazon is only attempting this with nonperishables like peanut butter, potato chips, and canned soup implying that there's no refrigeration required--ordinary warehouse shelves will do fine."
Not That Different (Score:5, Funny)
Well, in that case, it isn't different from what Amazon was doing before hand, now is it? Amazon to Sell Stuff Online, Film at 11.
Re:Difference between Amazon & Safeway (Score:5, Insightful)
Even if cashiers at grocery stores use disinfectant regularly, there still isn't any guarantee a customer didn't take that food item and get flu germs or worse all over it. I'd be a lot more concerned with what other customers might have done to food than the people working there.
Re:Difference between Amazon & Safeway (Score:5, Insightful)
Nevermind that the behavior of the cashier is essentially for show. If you want to know how "sanitary" your food from Safeway is go at 3 in the morning and watch the shelf stockers.
And of course other customers never touch your food before you buy it, no siree Bob! You might want to start considering your sanitation concerns being, by their very nature, your problem to look after. If you're afraid of catching something from your peanut butter jar wear gloves when you shop and wipe everything down with Vodka before you take them off.
KFG
Re:Difference between Amazon & Safeway (Score:3, Funny)
wear gloves when you shop and wipe everything down with Vodka before you take them off.
Funny, my last girlfriend said the same thing to me...
Re:Difference between Amazon & Safeway (Score:3, Insightful)
That is a nice gimmick.
Have you ever spent any time in the backroom of a supermarket, or a warehouse, or a food manufacturing plant? Obviously not, if you think that it makes any difference whether the cashie
Re:Difference between Amazon & Safeway (Score:5, Insightful)
seriously, that type of attitude is a contributor to the problem.
When someone who is NOT sick sneezes, etc the risk of any type of infection spreading is nil. Now there is always the chance someone has something but doesn't know it, and hence it is prudent to take others into consideration. But this attitude of using disinfectants and antibiotic soaps, etc make things worse, not better when they are misapplied.
Me I think companies should do a better job of convincing people who are sick to STAY HOME. I don't care what environment they are in, even if they suppress most of the symptoms they are the ones spreading it to others.
Someone who is sick should NOT be serving the public.
But, if you're overly sensitive, trust me, you don't want to actually know what's in your food.
really.
Peapod (Score:5, Informative)
I've never heard of this WebVan company, but the online grocery store that I do know - Peapod [peapod.com] - is still around and, going by how often I've seen their vans parked in some residential neighbourhoods around Chicago, quite successful. And they do deliver perishables.
And the others... (Score:5, Informative)
Re:And the others... (Score:5, Insightful)
Amazon also love the UK for that - apparently we're one of their best markets because most things get delivered next day.
Re:And the others... (Score:2)
According to the US Census Bureau, about 222 million people in the US lived in urbanized areas, meaning more than 2/3's of the population, and a market 2.5 times larger than any single European country (Germany is at about 80 million people).
The US' 50 largest cities alone make up a larger market than most European
Population Density (Score:4, Informative)
I used to live near Dallas/Fort Worth. You can drive 200 miles there and never leave an "urban" area, if you drive it East/West. Even North/South it's about 80 miles.
NYC's density is 26720 people per square mile.
Chicago's is 12604/sq mi
London's is ~12071/sq mi.
On the other hand...
Dallas' is 3534/sq mi.
Memphis' is 346.9/sq mi.
So you see, there's a bit of a difference there. Driving distance is indeed a factor for a large portion of the population. You really need a certain density to support this kind of thing on a local level.
Several stores have tried it in the past and failed. Kroger tried it in a few test markets. I was in Huntsville at the time they tried it there, but it only lasted about 6 months. They couldn't get enough people to use it to make it worth hiring more drivers, and they couldn't get the groceries to all the people in enough time to make more people want to use it.
Not exactly (Score:3, Interesting)
I live in an suburban area of Colorado, and only 5 miles from the nearest supermarkets and yet I can't get a single supermarket to deliver. Apparently i'm too far out!?
I think it has a lot more to do with the US tendency to drive. Many people in the UK find 18 miles r/t too far to drive to pick up a few items - yet in the US that's nothing.
Re:Peapod (Score:3, Informative)
gentlemen, start your engines... (Score:5, Funny)
If online grocery shopping gives you flashbacks to failed experiments like Webvan, you are not alone.
In fact, here they come now...
Re:gentlemen, start your engines... (Score:3, Informative)
Seeing them fade away with all the other wacked out
In New York City, we already have that. (Score:5, Informative)
Re:In New York City, we already have that. (Score:4, Insightful)
Next frivolous patent... (Score:5, Funny)
Re:Next frivolous patent... (Score:2)
Better sell hard to find stuff. (Score:5, Insightful)
Of course, if this works then I should invest in UPS & FedEx...
Re:Better sell hard to find stuff. (Score:5, Insightful)
For example, I listen to Howard Stern and one his side kicks, Artie Lange, likes "Devil Dogs". I have never seen these things and it turns out you really can't get them on the West Coast. However, a quick search and I found a couple of places that will ship them out to me.
Re:Better sell hard to find stuff. (Score:2)
Re:Better sell hard to find stuff. (Score:2)
The trick is to sell things where you aren't competing with local grocery stores or where volume can give you a huge price advantage.
Re:Better sell hard to find stuff. (Score:2)
Trust me- my left arm tingles all the time.
Re:Better sell hard to find stuff. (Score:2)
Re:Better sell hard to find stuff. (Score:2)
My first reaction was, surely they'll be teaming with local grocery store chains to do this? But no:
Maybe I'm crazy, but I can't see UPS shipping a box the size of a grocery cart for a price I would pay. The b
Re:Better sell hard to find stuff. (Score:2)
Re:Better sell hard to find stuff. (Score:4, Informative)
I could see this being really useful for bulk sizes of items. Things like cereal, laundry detergent, etc. As long as the price is competitive, it could make a portion of the grocery shopping that much easier.
Re:Better sell hard to find stuff. (Score:2)
Re:Better sell hard to find stuff. (Score:2)
And I want them to sell me food I can buy locally by striking deals with local stores. I could shop online for what stores in my town sell and have it delivered in the next 24 hours. If they combine deliveries, it would cost less than FedEx. The grocery store gets a competitive advantage, Amazo
Re:Better sell hard to find stuff. (Score:3, Interesting)
So? (Score:5, Interesting)
Re:So? (Score:4, Interesting)
But I agree, on the whole, the FreshDirect experience is hard to beat. Did you ever see those signs at Fairway hanging from the ceiling, bashing FreshDirect and its owner for various injustices apropos nothing? Priceless.
Re:So? (Score:2, Funny)
I just had to add this little gem from New York magazine, courtesy Wikipedia [wikipedia.org]:
Re:So? (Score:2, Redundant)
Re:So? (Score:2)
Re:So? (Score:4, Insightful)
What precisely was the point to your post?
Re:So? (Score:2)
Re:So? (Score:3, Informative)
Re:So? (Score:2)
mostly items in bulk (Score:5, Informative)
Jonathan
Re:mostly items in bulk (Score:3, Insightful)
Re:mostly items in bulk (Score:2)
Re:mostly items in bulk (Score:5, Informative)
To understand this sort of thing you have to think about three issues: supply chains, inventory management and fulfillment. They're the three biggest logistical issues in retail. Actually building stores or finding customers or selling them stuff... a bit further down the list. For a big retail company, huge amounts of money are gained or lost based on those three processes, and small changes there have a far bigger effect than anything that goes on in a store. The supply chain is about getting ahold of the stuff you're going to sell. But getting it in just the right amounts, in the right places, at the right times, with the right number of nines in the probability it'll all happen correctly and the right number of zeroes in the dollar penalty if it doesn't. A "bubble" in the supply chain, where a shipment was late, equals lots of lost revenue -- not just in the store, but in the warehousing and all the disruptive ripple effects. It doesn't take much to disrupt a supply line -- a breakdown in a loading dock, a storm that delays a cargo carrier out of China from making port in Oakland or Los Angeles. You can see why big retailers like Target, Walmart or Amazon are so union-hostile; their systems are extremely vulnerable, and the economic impact of a strike has magnified.
Then there's inventory. If you're in the business of selling stuff, inventory is bad. You have to pay for the shelf it's sitting on, you have to keep it from getting wet or dirty (if it's perishable, you have to pay to keep it cold). And it's depreciating every minute it sits on your shelf, representing a paper loss you have to explain to the shareholders. Plus, it's taxable. Remember how smaller shops used to be out of everything around the end of the fiscal year? If you asked the shop keeper, he'd look a little frazzled and mumble "inventory," 'cause he was trying to get rid of as much as possible of it before the IRS made him pay taxes on it. Big retailers don't do that anymore, because they own so little inventory it doesn't hurt them -- and often they don't own the inventory that's on their warehouse or store shelves at all. The shift in power from the manufacturers to the retailers over the last decade or so displaced the tax burden of ownership back to the manufacturers, who in turn shift it backwards to their own supplies or subsidiaries, often in Asian countries that don't tax physical assets. The ideal arrangement from a retailer's point of view would be for the warehouses to have no shelves at all, but simply to be this giant tube through which products were hurled, changing quantities or packaging a little bit in midair, and never touching the floor once before landing in a different truck on the far side of the tube.
And then, fulfillment. For Amazon, that's putting the items in a box and tossing it into the UPS truck. For a big-box retailer it's putting a pallet of them on a truck and driving it to the store. It's a difference of scale made a little earlier on, but fundamentally it's no different. Products need to be physically located near the point of sale (that's the store the customer walks into or the room their web browser was in, whichever) to get it to them cheaply. That's "near" in terms of cost, which is sort of like physical distance but not precisely. The right amounts of inventory (or better, supply chain infeeds) need to be pre-positioned on transit arteries that can reach the stores with the demand or the shipping carriers' local shipping centers as quickly and cheaply as possible. Good highways, good weather, complaint carriers, cheap labor, and union leaders run out of town by a compliant local government eager for the thousands of low-wage jobs you're promising to bring in. Costs to get the product into customer's hands need to be minimized, whether that's with an effective supply system to brick-and-mortar
Why a flashback? (Score:5, Informative)
What services do you use? (Score:2)
Re:What services do you use? (Score:2)
Re:What services do you use? (Score:2)
They already sell some food (Score:5, Informative)
Re:They already sell some food (Score:2)
Does that market fit into their portfolio? (Score:4, Insightful)
Now where does peanut butter come into play? I mean, I somehow CAN see certain porn movies and peanut butter, but it's not really the thing that comes to my mind when I start browsing Amazon. Where's the synergies? When did it happen to you the last time that you wanted to buy a book and realized "Hey, I also need noodles!"?
Books, movies, games, makes sense. Groceries just don't fit into the fold.
Re: Does that market fit into their portfolio? (Score:5, Funny)
When was the last time you watched The Buns of Navarone, listened to Give Peas A Chance, read The Da Vinco Cod, or saw Bring Me the Bread of Alfredo Garcia?
Re:Does that market fit into their portfolio? (Score:2)
Re:Does that market fit into their portfolio? (Score:2)
In my mind it's the delivery costs that have killed many online grocery stores in our area. Houston is very spread out, and although one of the first online grocery services was launched here, it failed miserably due to delivery issues. Sure, it takes time for people to adjust to a new culture, so the customer's were
Re:Does that market fit into their portfolio? (Score:2, Funny)
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If only... (Score:3, Funny)
Re:If only... (Score:4, Funny)
since no perishables (Score:2, Interesting)
Re:since no perishables (Score:4, Funny)
plenty in the UK (Score:5, Informative)
Re:plenty in the UK (Score:4, Informative)
Re:plenty in the UK (Score:2)
However it does seem that few actually use this service. Probably the 2 biggest customers in this area are businesses ordering for employee snacks and people living downtown who don't own cars.
Re:plenty in the UK (Score:2, Insightful)
Re:plenty in the UK (Score:2, Interesting)
It doesn't matter how big the country is. There are plenty of stores here. It just needs someone from a single major retailer to admit that people only want to buy what they NEED, and not what gets placed at the end-caps, checkout lanes, and on falsely labeled sale shelves.
Re:plenty in the UK (Score:2)
Albertson's (#2 US) and Safeway (#3 US) have offered online shopping and home delievery in many of the metro areas they operate in for years now.
In addition one of the remaining "buy groceries online" companies (Peapod.com) is now owned by Royal Ahold who also owns the Giant supermarket chain. When they took over Peapod they cut it back to markets they already served in the US and made is essentially the hom
Makes sense with their other infrastructure, too (Score:3, Insightful)
Correlation between Reading habits & Eating ha (Score:4, Funny)
Re:Correlation between Reading habits & Eating (Score:2)
Re:Did a google and it has already been done! (Score:2)
After analyzing the data, Amazon.com has determined that transporter (733324) primarily lives on Cheetos & Vitamin tablets and finds no time for reading books (spends all his time posting funnies on slashdot)
Bulk goods == expensive shipping (Score:5, Insightful)
If there's one type of goods which I would like to order online and have delivered to my door, it is bulk goods. A box of 12 1L cartons of orange juice; a dozen 2L bottles of diet coke; a 4 kg box of laundry detergent. These can sit on my shelves for months, but they're bulky, heavy, and generally annoying to handle. I'm doubt I'll ever buy tonight's dinner from an online grocery store, but I would be very happy to buy next month's laundry detergent.
Unfortunately, the very nature of these goods which makes me want to order them online and have them delivered makes them impractical for a company like Amazon to handle. Products like this tend to be are at the very low end of the $/kg scale; they are exactly the sort of products which need to be shipped in large quantities to local warehouses and then delivered locally -- not packaged into individual deliveries at a central warehouse and then shipped separately halfway across the country.
The reason an online bookstore works so well is that the book market is characterized by low turnover, high profit margins, and high $/kg ratios. Grocery stores have high turnover, low profit margins, and low $/kg ratios. Trying to apply a solution designed for bookstores to the grocery store area simply won't work.
Re:Bulk goods == expensive shipping (Score:2)
Re:Bulk goods == expensive shipping (Score:2)
Re:Bulk goods == expensive shipping (Score:2)
"Let's make a business of selling 50-lb bags of dog food with free shipping. While we lose money on each sale, by spending $25 million on Super Bowl advertising we can make back our losses on volume."
Meanwhile, in the UK (Score:3, Informative)
More Creative Delivery Options (Score:2, Insightful)
In addition to internet ordering the major grocery chains in Spain (two of the largest are actually French and German owned) offer other creative options. I for example found I didn't particularly like shopping for groceries online. There were too many things I wanted to see and select in person: fresh fruit and vegetables, meats, cheeses, etc. But I also found I didn't like lugging my groceries home on public transit so I would sh
a terrible idea (Score:2)
Who really wants to shop for 1/2 their groceries online, and the perishables in the store?
Re:a terrible idea (Score:2, Funny)
Harry Potter reference link [amazon.com] (Sorry, it was the first thing that popped into my head for which to search)
Re:a terrible idea (Score:2)
Re:a terrible idea (Score:2)
Perishables??? (Score:2, Funny)
What other kind of food is there? I know not of this 'perishable' food.
-Grey [wellingtongrey.net]
Re:Perishables??? (Score:2)
Peapod.com (Score:2)
Re:Peapod.com (Score:2)
That said, even though they deliver perishables, I wouldn't use them for produce or any non-ground meat.
Albertsons.com (Score:2)
Still, even without refrigerated local delivery, there've been places shipping non-perishable food items for a while now. Just google for "groceries."
Click and Motor (Score:3, Insightful)
Some competition from Amazon might force down the prices, and produce some new innovations for better service. And it will double the number of doubleparked giant delivery trucks clogging previously residential-only streets that rarely took deliveries.
These delivery services should deliver only after 8PM, when people are at home, and traffic congestion is lighter, and the double/parking has settled down. Getting that setup for residential zones would help make it more obviously better in commercial and mixed zones. Eventually we can have deliveries only between 8PM-6AM, and use the full capacity of our roads, even increasing it by lowering wasteful congestion.
A great combination of efficiency and convenience, at every level.
Metro's Seem to Have This (Score:2)
I suspect that this is something that makes a lot more sense on a metro by metro basis, hooked into existing stores just
*sigh* (Score:2)
No Mountain Dew (Score:3, Funny)
Most UK supermarkets have done this for years (Score:5, Informative)
There's a charge for the service, of course (about 5 pounds), but it saves so much time and hassle it's generally worth it (not to mention that it massively cuts down on the temptation to impulse buy).
American too... (Score:2)
I see the employee shoppers in Safeway a lot. They have these carts that know what they are to buy, and route the person on the shortest path through the store to pick up each item, and tells them which items to buy and which bin to put them in (since they shop for a couple people at once).
Pushed by Google? (Score:3, Insightful)
Even now, if I were to buy a book, I'll just google it and find the amazon link from there. Thats advertisement expense that Amazon is losing right there - more importantly Amazon has stopped being my first resort for book searches though majority of my purchases might be still from there. Amazon would probably want to gain that "first site you go to" share. And if they stick arnd with just books, whereas google offers everything (including Amazon links - which obviously they cant afford to take out), they might start to lose a bit of relevence. And obviously google's plan to scan the worlds books is a very visible threat.
Re:Pushed by Google? (Score:2)
And if they stick arnd with just books, whereas google offers everything (including Amazon links - which obviously they cant afford to take out), they might start to lose a bit of relevence. And obviously google's plan to scan the worlds books is a very visible threat.
I suggest you go look at Amazon - they sell quite a large variety of stuff. Books, Video, Sporting goods, clothing, gems, electronics, Badonkadonk, cosmetics, watches - you name it. The one thing they seem to shy away from are things that r
It's an experiment -- nothing more (Score:3, Interesting)
These types of goods are commoditized to the point that no one -- not even Amazon -- will be able to gain significantly better economies of scale than are already present. The margins are just too thin. As others have mentioned, Amazon is already at a disadvantage because of the shipping.
Most of the traditional grocers gave up on trying to compete with Wal-Mart on price long ago and are looking for new ways to differentiate the customer's shopping experience instead. Been in a Wegmans [wegmans.com], Whole Foods [wholefoods.com], or one of the new A & P "Fresh" format stores (A & P Fresh, Waldbaums Fresh etc.)? It's all about ultra-impressive super-clean 100K+ sq. ft. stores, organic foods, in-store cafes, etc. coupled with a progressive (for retailers anyway) use of technology. With many traditional low-end grocers going under, selling off large numbers of stores or re-orging (Winn-Dixie, Food Lion, etc.), the rest are content to let Wal-Mart have the low-income demographic and aim squarely at capturing upper-middle class and above shoppers' dollars. These shoppers have proven that they're willing to pay a bit more for a high-quality shopping experience. Amazon's approach will add some more content to their own store (the ultra-important "long tail") but will have little effect on the grocery biz.
Disclaimer: I work for a retail software vendor.
Does anyone know if.. (Score:2, Funny)
Used & New (Score:3, Funny)
Re:Used & New (Score:2)
*Zing*
Top Ten List (no not Letterman's) (Score:3, Insightful)
http://www.amazon.com/exec/obidos/tg/new-for-you/
Re:What happens if there is a delay? (Score:2)
Re:Schwan's (Score:2)
Re:Amazon has lost its advantage (Score:2, Informative)