Losses Mount for Startups Racing To Deliver Groceries Fast and Cheap (wsj.com) 137
A venture capital-backed battle is raging in New York City in the burgeoning field of instant delivery. From a report: At least six startups, including Gorillas, Jokr SARL, Getir Perakende Lojistik and Buyk, are vying to win the chance to ferry groceries to customers within 10 to 20 minutes of their order placement on an app. Prices are similar to grocery stores, discounts are plentiful, and many services don't have a fee or minimum order, allowing consumers to request a single pint of Ben & Jerry's delivered to their doorstep. Food-delivery app DoorDash, based in San Francisco, also recently entered the fray in New York City.
While these consumer-friendly offerings have brought surging sales, losses are heavy given the high cost of prolific advertising and paying couriers to hand-deliver potato chips, soap and eggs in a short time frame, industry investors and executives said. Some of the companies are averaging a loss of over $20 per order when factoring in costs like advertising, those people said. "The economics are brutal," said Damir Becirovic, a principal at venture-capital firm Index Ventures, which hasn't invested in any of the startups. He added that if any of the companies can build a giant business with efficiencies from scale, that picture could change, but the short-term challenges seem daunting. Take for example Fridge No More, a New York-based company that launched in 2020. As of September, its average order value was $33, according to a 2021 investor presentation viewed by The Wall Street Journal. After paying for the products, the people packaging them, delivery riders, waste and other expenses related to storage, it lost $3.30 on every order. That doesn't include marketing costs. Fridge No More spent $70 on advertising to win the average customer, an investment that resulted in a $78 loss for every customer that stayed in the 10 months through September, according to the presentation.
While these consumer-friendly offerings have brought surging sales, losses are heavy given the high cost of prolific advertising and paying couriers to hand-deliver potato chips, soap and eggs in a short time frame, industry investors and executives said. Some of the companies are averaging a loss of over $20 per order when factoring in costs like advertising, those people said. "The economics are brutal," said Damir Becirovic, a principal at venture-capital firm Index Ventures, which hasn't invested in any of the startups. He added that if any of the companies can build a giant business with efficiencies from scale, that picture could change, but the short-term challenges seem daunting. Take for example Fridge No More, a New York-based company that launched in 2020. As of September, its average order value was $33, according to a 2021 investor presentation viewed by The Wall Street Journal. After paying for the products, the people packaging them, delivery riders, waste and other expenses related to storage, it lost $3.30 on every order. That doesn't include marketing costs. Fridge No More spent $70 on advertising to win the average customer, an investment that resulted in a $78 loss for every customer that stayed in the 10 months through September, according to the presentation.
Volume matters (Score:5, Insightful)
You can't do this stuff outside of a few big city centers. Even lower density places like Northeast Philadelphia are too far flung for this to work.
Instacart and peapod work reasonably well in suburbs because they don't promise minutes, they promise hours.
And most people in the US live in suburbs where if they need something in 15 minutes they can go get it themselves.
So their customer base is limited and their opportunity to realize economies of scale is also limited.
Re:Volume matters (Score:5, Insightful)
These companies are losing money in Manhattan. If it won't work there, it won't work anywhere.
The big problem I see is that they're selling their own supplies. Instacart and others work by having people go into grocery stores that are already stocked. So they don't need to pay rent, refrigeration, spoilage, etc. They bootstrap on existing infrastructure, then they can consider moving downstream where it makes sense. Here they're trying to do it all at once, which is a huge effort.
Re:Volume matters (Score:5, Insightful)
These companies are losing money in Manhattan. If it won't work there, it won't work anywhere.
While that may be true, it appears their biggest challenge now is the startup investment model where everyone needs to fight against competitors who can bleed money for years. In such an environment you could have a good enough product and enough customer demand to build a successful company, but still have negative cash flow because you need to compete with discounts of competitors.
We won't really know if the concept can be sustainable until investors are no longer willing to lose millions trying to be the last left standing.
Re:Volume matters (Score:5, Insightful)
But where are the profits. If you charge enough to pay both the gig workers sub-minimum wage, and enough to pay for the offshore grunts who set up the computing infrastructure and apps, then it will cost too much for customers to want it. Except during a pandemic when the fear factor makes some want to stay inside for two years while the serfs go out and shop and get sick and die on their behalf. When the pandemic is over, why would these businesses expect to make a profit?
Remember daily milk deliveries died once peope would buy pasteurized milk themselves from stores. Diaper services also nearly vanished except for the yuppie market.
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Yeah, I was kinda wondering the same thing.
Sure, a lot of us, self included, discovered online shopping that first year when the pandemic hit.
I personally did all mine from Costco.
But ever since I got my 2x doses of Pfizer last year April, and booster later....life ha
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Where I live, the only people you see without masks are in the other cars while you're driving. And of course nobody is allowed into a store without a mask.
And almost everybody is shopping normally.
Re:Volume matters (Score:4, Insightful)
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Re:Volume matters (Score:5, Interesting)
Ahhhh.. the old failing to see the value in your suppliers fallacy.
Hey you know what's a great business plan?? A race to the bottom selling COMMODITIES.
I can almost see the reviews now... "Dead delivery person found on doorstep, would not buy again".
Re:Volume matters (Score:5, Funny)
We lose a dollar on every item sold, but we'll make up for it in volume!
Re:Volume matters (Score:5, Interesting)
In 2000 I bought a Toyota 4Runner from an Internet startup, "carorder.com" https://www.fi-magazine.com/311476/carorder-com-out-of-business [fi-magazine.com]. I was very excited at the prospect of on-line auto sales taking the pain of dealing with dealerships away. However, in order to pick up my car I had to go to a... dealership. While I was there I asked the salesman hnadling the transaction for the dealership whether he felt threatened by the new business model. After showing me the $3,000 check he received from carorder.com in addition to ALL of the money I had paid carorder.com for the vehicle, he said that he was A-ok with the arrangement.
The joke at the time was that Internet startups were losing money, but would make it up in volume. That didn't work for carorder.com.
Note: I *really* liked the buy a car on the Internet experience. I was able go through the options, pick the ones that made sense to me, and see the "out the door" price right away. When I was ready to buy, I clicked "buy" and the deal was done. No meeting with the "finance" people in the back room, no having to say "no" over and over to attempted upsells. It was nice.
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I guess I didn't explain myself too well. I paid carorder.com for the car that I bought. I paid them an amount that represented a decent discount below the "dealer invoice" price, and which was substantially better than any dealer in my area seemed willing to haggle down to.
I picked up the car from a dealership. I didn't pay the dealership any extra money when I picked up the car. The sales paperwork showed the dealership receiving *all* of the money that I paid for the car, plus the dealership receivi
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Note: I *really* liked the buy a car on the Internet experience. I was able go through the options, pick the ones that made sense to me, and see the "out the door" price right away. When I was ready to buy, I clicked "buy" and the deal was done. No meeting with the "finance" people in the back room, no having to say "no" over and over to attempted upsells. It was nice.
You can still do this, just buy a car from any major automaker through their website, and then when you talk to the local dealership, just tell them, "Look, I don't want any discounts, I'm ready to pay the sticker price I just don't want to be upsold." They'll be happy to take your money. Upselling is to offset the lower price they're offering you. If you'll pay sticker they're already happy.
If you want the best price, or you want to see if you can get any "free" options, you'll have to haggle.
Re:Won't work without teleportation (Score:2)
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The only way it would work would be with teleportation.
No, because then someone will just replicate the food, but it's not long before the replicators get replicated, and everyone has one, and then the only reason that people don't download a car is because they've replicated a transporter and don't need a car.
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and then the only reason that people don't download a car is because they've replicated a transporter and don't need a car.
More likely, only the richest can afford parking at that point.
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Promising minutes is stupid, no matter whree it is. 10-20 minutes? It takes me longer than that go get into the store and back out, not counting any drive time.
This whole business model is clearly doomed to fail without premium pricing, and even that will fail once the pandemic is over and the twenty-something snowflakes realize that they can shop by themselves and use the savings to buy more beer.
Now such services are great, if you are shut in, disabled, elderly, and so forth. Many grocery stores before
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This whole business model is clearly doomed to fail without premium pricing, and even that will fail once the pandemic is over and the twenty-something snowflakes realize that they can shop by themselves
That's a mighty big assumption.
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Indeed. Out here in the sticks if I want food, I just go outside and pick it from the garden. I don't care how fast Instacart and Peapod drive, they're never going to be able to go faster than me walking through my own backyard.
You have cheeto vines and hamburger bushes in your garden?
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Well, I'm guessing if he's motivated enough to grow a nice veggie garden...
He's not terribly interested in eating crap like Cheetos.
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If you want to make your own shitty processed snacks, you can make them with an "air fryer" or "quick pot."
You're one of these people who thinks hamburger comes from the grocery store! The truth might shock you.
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Right now there is somebody farting in a jar in order to ship it out to their customers for big money.
I'll bet their profit margin is higher than a grocery delivery startup, too!
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Keep your microbiome to yourself please.
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Dones and self driving vehicles sounds expensive, and a significant capital investment. Workers are cheaper especially if you can pay them below minimum wage.
I think there's a lot of startup style of thinking - start a business, any business, then hope someone buys us out before they figure out it's impractical. There's just not a big enough customer base for this.
Didn't we go through this already? (Score:5, Insightful)
At the first bot com bust, back when fuckedcompany still existed they documented all the crazy dot com startups and how much they took in with their grandiose ideas, before their inevitable implosion?
Re:Didn't we go through this already? (Score:4, Informative)
https://en.wikipedia.org/wiki/... [wikipedia.org]
Check out Thelayoff.com - similar to fuckedcompany (Score:2)
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I don't remember the first bot com bust. I do remember first dot com bust.
Grocery delivery will never be cheap (Score:3)
..unless it is subsidized at a loss by some other higher profit sales. It's slow and expensive by its nature
Re: Grocery delivery will never be cheap (Score:3)
Re: Grocery delivery will never be cheap (Score:5, Interesting)
I have used grocery delivery once (after I had surgery last year). The annoying thing is they raise the price on individual items AND charge a service fee. IMHO the price of goods should be the same as it is on the shelf, then maybe a "picker fee" based on the number of items (since that's the predominant driver of time taken to collect the order) and a delivery fee that's based on distance.
But they want to be able to not show a bunch of fees, and also periodically offer "free" delivery as an incentive, and still make money of course, so I guess they've got to try to hide some of the costs somewhere.
Re: Grocery delivery will never be cheap (Score:4, Interesting)
The annoying thing I found, the few times I used them, is the pickers don't give a shit what they throw in your basket as they fill your order. Especially for produce or other non-prepackaged foods, they just grab the first thing in front of them rather than what they might buy for themselves. i.e. look for the best quality for the price. Or they substitute shit you wouldn't buy (say chunky peanut butter instead of smooth), and to get them to fix it is really too much of a pain in the ass. And then you are still paying the premium on the substandard.
Re: Grocery delivery will never be cheap (Score:5, Insightful)
The problem with your replacement issue is that there's no way to know what you wouldn't buy. You might hate chunky peanut butter and would never buy it. A lot of other people wouldn't care and would rather have chunky than nothing. The picker doesn't know what camp you're in. So their options are contact you (not always possible), make a guess, or remove the item from the order. There's no way to win here, any choice they make is going to piss someone off.
Re: Grocery delivery will never be cheap (Score:5, Informative)
The way Fred Meyer / Kroger does it works pretty well. A couple hours ahead of your pickup or delivery, you get a text saying "you have items in your cart which are unavailable. Please review these substitutions" - which you can approve or reject.
If you don't respond, the unavailable items are just removed from your order.
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I used Instacart (my usual grocery store is a Publix and they partner with Instacart), and I guess I got a good shopper - I'd put ice cream on my list, and she texted me a picture of the last two sad-looking cartons of ice cream (one flattened, possibly enough to be open, and the other covered in ice crystals) and asked if I wanted that or to skip it.
Re: Grocery delivery will never be cheap (Score:5, Informative)
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Many grocery stores I see have a pick-up location in the parking lot. So those who aren't disabled can actually drive over and pick stuff up without paying for a driver and while staying safe, and it likely saves on overall fuel consumption.
If you need delivery too, then that's when you use a service (or friends and family). But assuming up front that it must be delivered, and that it must be delivered quickly, is just modern day silliness. You don't bitch at your friends if they delivered your groceries
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Re: Grocery delivery will never be cheap (Score:5, Informative)
Sounds like an American problem, a subcontractor problem. Here in Europe the cost of groceries online from the website of the supermarket is the same as in the shop, even with similar levels of discounts. You only pay either a delivery fee or a subscription fee (which is cheaper if you get groceries delivered weekly).
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It's the same in the US, or not, depending one which store you shop at. All of these different ways are available, including how you do it.
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And many grocery stores already offer delivery for customers who have difficulty shopping in person. Sometimes they do this at a loss, but it maintains customer loyalty and community.
My friend has stuff delivered, which is beyond his income to be honest, but he wants to "stay safe". Which is absurd as he's tripple vaxed, and he seems to overlook the fact that it's unsafe for those who do the delivery. He also complains when they can't find the right Pringles flavor. On the other hand, he's got some psych
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Kozmo (Score:4, Insightful)
Yeah, I remember this from 2000, when it was called Kozmo.com [wikipedia.org]. It didn't work then, with their armies of van drivers and delivery bike riders with giant orange bags, and I don't see why it'll work now. Groceries already have very tight margins for the retailers, and last-mile delivery with a cold chain and ideally with fast drop-off is expensive.
Fun for users though, who get to waste the VC money.
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Not really (although it's crazy to think that no one was using mobile ordering with Kozmo; you had to do it from your work or home computer).
If the real price were factored in, there would be little (though still some) demand. So usually they burn through many millions of VC dollars in step one to subsidize the service to users (sell lots of people convenience store things at convenience store prices), never figure out step two (???), and never reach step three (profit).
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There is a group of people though who love this sort of thing. They spend every last dollar of their paycheck because they don't think about saving and investing for the future. This group is also very good at promoting the services, for free, which I think may mislead the marketing into thinking that there's a larger demand than there really is.
and the drivers are not likey paying meaters or pa (Score:2)
and the drivers are not likely paying meters or if 1099'ers the drivers don't get any thing like that covered and for get about tolls.
In the 1930's (Score:4, Interesting)
Long ago, people in cities could get their groceries delivered. People worked for tips. But it was usually just a bag of daily necessities. Not two weeks of bulk food to be delivered to a suburb 20 miles out of the city center.
I feel like a working public transit system could carry packages and groceries more effectively than a bunch of drivers and drones and robots. At least for those that were smart enough to live near a train station or bus stop.
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I would bet that was only for people with money. That was the 1930s during the depression. People would suck a cock to get some food. So a tip to deliver groceries to some privileged cunts isn't surprising. But unemployment now isn't like then.
Re:In the 1930's (Score:5, Informative)
I would bet that was only for people with money. That was the 1930s during the depression. People would suck a cock to get some food. So a tip to deliver groceries to some privileged cunts isn't surprising. But unemployment now isn't like then.
This was common in NYC up until the 1990s (and likely later, though I can't speak from personal experience having moved in the mid-90s) which is hardly "great depression" and the supermarket was in your neighborhood, so unless you lived somewhere "exclusive" then the people delivering your groceries had similar socioeconomic background to you.
Of course, you would actually go to the store and shop for your groceries and pay for them in store. They would then be delivered to your home 30-60 minutes later. The person delivering the groceries was just another store employee making whatever the store paid, plus the tip you gave them (or not). The obvious benefit here was that you didn't have to bring a car (which you may not have owned anyway) to a place that was less than 1/4 mile from your house to buy more than a bag or two worth of groceries.
TL;DR: not everything is some late stage capitalist shitshow.
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> you still have to account for the times when there are no bagging orders to be filled.
you do this by scheduling pickups.there are a fixed number of slots to pick up during each period, so you can keep the pickers busy.
My local Walmart found the balance such that you can count on an afternoon pickup being available if you order the prior afternoon or early enough in the morning, yet all of the days slots fill.
Also, the picker takes a fraction as long as a shopper to get the goods; I think it's a half a
Re: In the 1930's (Score:2)
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We know that going to the grocery often takes 30min to an hour to get everything on the list. Even with the most efficient man-power system you can come up with, its going to take at least 15min to bag all your shit. Even in a system where every employee picker is assigned a single row and they just get the items on their row for every customer, you still have to account for the times when there are no bagging orders to be filled.
Anybody in the grocery delivery business who hasn't built one of these [youtube.com] has no chance in hell of competing.
If grocery delivery is ever to succeed, there will be no human pickers, period, and the robots will be well-nigh infallible. And by infallible, I mean no more than 1 in a billion picks can fail, and zero picks are allowed to fail catastrophically. Such a standard may be impossible to meet, or at least impossibly expensive, so it may never happen.
I could see it happening only if it makes a big enough d
Re: In the 1930's (Score:2)
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Are they really delivering groceries 20 miles?
I live in an area with plenty of farmland and wooded trails and I just did a quick map search. Searching on just one grocery store chain there are 22 stores less than 20 miles from me. I don't think "suburb" is the right word to describe a place 20 miles from the nearest grocery store.
There are plenty of other grocery stores around too, 22 stores within 20 miles is just for one particular chain. The closest one is less than a mile away and there are four within
tough reality delivered with some snark (Score:2)
Are they really delivering groceries 20 miles?
Sorry if I wasn't clear. The suburb itself is 20 miles out. That's where the population density really falls off. I didn't really complete what I intended to say about that aspect of this problem. My apologies for my ineffective hand waving.
The robots I've been involved with are limited to a delivery radius of 2 miles away. And restaurants delivery drivers are typically limited to a 5 miles radius. Grocery stores vary a lot by policy but 10 miles is not unusual out here.
The funny thing about radius. Let's s
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Delivery of Easter hams and Thanksgiving turkeys isn't going to work just on the demand spike alone.
Hams are cured, and turkeys are frozen. These are usually purchased days before the holiday. I doubt delivery has to be faster than in-person shopping to succeed. It only has to be more convenient. Since you don't have to go to the store, if it leaves the store at the same time as if you were buying it yourself, then it is guaranteed to be more convenient. There is no tradeoff unless it is slower than going yourself.
Re:In the 1930's (Score:5, Interesting)
The issue isn't grocery delivery itself. It's the expectation of instant gratification. No one blinks an eye about grocery delivery, heck most supermarkets here offer it themselves, make money, pay their drivers etc.
These startup companies exist to deliver to you a bottle of beer within 15min or some bullshit like that, not provide you your biweekly (or even daily) supply of groceries. It's an insane business that makes little sense financially because people who would pay a justifiable delivery fee to have something picked up that quickly could just get their butler to do it.
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I'll deliver a bottle of beer for a $20 delivery charge. I could probably go even lower if I work out the numbers. ($15/hr minimum wage in my town. if I could average more than 1 delivery per hour then the math starts to work out favorably)
I don't like the idea of having a lot of capital tied up in robots that will be vandalized and more importantly become quickly obsolete. I think the key to investing in robot deliveries services is to wait for the market to mature for 20 years. I've taken the same stance
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Well, for bottles or cans, why not just adapt the existing pneumatic tube distribution network used to dispense Chinese food from the central kitchens in the midwest to various restaurants? (This is why it usually tastes the same everywhere in the US)
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Technology can't deliver Service with a Smile.
And here I thought Chinese food in the Midwest all tasted the same in order to cater to the midwestern palette.
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I'll deliver a bottle of beer for a $20 delivery charge.
Precisely my point. Anyone who can afford $20 for a beer would send the hired help to do it rather than calling you.
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>a bottle of beer within 15min
ok, I'd been dismissing the notion, but now that you've brought *beer* into this . . .
err, they will bring me the good stuff, and not just swill lite, won't they?
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err, they will bring me the good stuff, and not just swill lite, won't they?
If you're going to pay for someone to bring you drink I'm sure you can afford more than a shitty pilsner. The only remaining question is, are you a man of class or a run of the mill barbarian.
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It's an insane business that makes little sense financially because people who would pay a justifiable delivery fee to have something picked up that quickly could just get their butler to do it.
In the US you can also pay a taxi driver to do this sort of thing for you. You can't call cold unless they know you, but you can arrange it in advance and pre-pay the first time, and then they know you're legit and after that you can just call.
In cities there are also concierge services that will do anything from arranging travel to delivering groceries. They emphasize the arranging travel sorts of things, but they're actually just personal assistants. But if you use it a lot, then a butler might be cheaper
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Not two weeks of bulk food to be delivered to a suburb 20 miles out of the city center.
Clearly that would be a fridge too far.
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They probably didn't have cars, either.
If you can get rid of a second car, these services make financial sense, even if they do increase your weekly grocery cost.
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For that amount of food delivery starts making sense again though, if you don't mind needing to stay home for an hour or so for the delivery window.
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I don't remember that service being used for anyone who wasn't staying home most of the day anyway. Working people didn't use it much. It was for retirees, those with disabilities, elderly who had difficulty walking, etc.
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Or maybe people could have a weekly shopping trip to pick up what they need for the next week or two.
Now that's just crazy talk!
Webvan all over again (Score:2)
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I remember using kozmo.com [wikipedia.org] back in that time frame as well. They also didn't make it and went bust in 2001, only to apparently relaunch recently to try it again.
If you're losing money on every sale... (Score:5, Funny)
... you just gotta make it up in volume! :-)
If it could be done ... (Score:5, Insightful)
Re:If it could be done ... (Score:5, Interesting)
They are to a degree. I think though that the grocery chains themselves are going to win this one. They already have the distribution and warehouse network in place with their brick-and-mortar stores, and they're used to dealing with razor-thin profit margins as a matter of routine. They won't be offering delivery within hours, it'll be next-day service with scheduled delivery times, but most people plan their grocery shopping ahead at least that far. 1-hour delivery service I think will end up being a niche service offered by concierge delivery services handling fast/emergency delivery of more than just grocery items at a hefty premium.
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I know it's different everywhere - but here we utilize the free "pickup" services offered by grocery stores. Order online, drive up, they put it in the back of our vehicle... and we drive home. It's incredibly fast and convenient. It saves us literally hours a week of grocery shopping.
I know that it wouldn't work in NYC... but any place where the majority of people drive to work is a place where free order pickup will win.
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Yeah, I do this if we need a lot of groceries, or if I'm not feeling well and don't want to potentially share my germs. I'm glad they offer this handy service (and were already doing it before COVID-19 was a thing).
Otherwise, I just go into the store a couple times a week - and typically do self-checkout.
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It probably could work for car-hostile with the twist of delivery. The key would be abandoning the madness of promising delivery within minutes and requiring a minimum order. Get the ability to batch up orders and avoid individual orders from being a pain and you got yourself something.
Of course, with a dozen contenders in a specific market, they get in the way of each other getting to reasonable levels of efficiency. You'd need it to settle into 2-3 contenders before, for example, a particular apartment
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Doesn't Walmart already do that in selected areas to begin with?
What I don't understand is why the grocery chains with at home delivery haven't taken over the meal kit market, it's just software for them.
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Not really. Amazon for all their evil generally still stick to some semblance of traditional business rules. Their delivery centres are above board and their drivers work in a traditional way, they partner with traditional businesses for distribution.
These companies on the other hand are akin to what Uber is to the laws regarding taxi use. They circumvent the barely legal, underpaying their "not staff", abusing infrastructure and skirting laws. One of the biggest issues locally for these companies right now
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Doordash does this shit, and they also have a million fake restaurants trying to use someone else's kitchen. They also haven't made any money while trying to swallow the market whole.
Correction, if it could be done (Score:3)
Seriously, I was wondering how Amazon got away with what they do, and it turns out the only metric we used to decide on anti-trust enforcement for the last 20 years was whether it would raise consumer prices or not.
That means Amazon could just keep prices down overall and get away with (corporate) murder.
Oddly enough Joe Biden changed that. It's a huge win for consumers and
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Actually, it's more like the last 40 years. It was the corporation-friendly Reagan administration that decided it would be policy to only pursue cases if it could prove unfair competition that caused consumer harm, which is a lot harder to prove than just unfair competition that harmed competi
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Having no competitors is also the only way to keep such a business viable. As per the article, startups are taking a massive hit because of marketing and promotions, just to try and have a basic level of customers using the service. They can't afford to compete. Amazon gets around this ultimately by just killing off everyone else. Uber did similar to the taxi industry in many countries around the world. Starbucks has been doing it since their inception. For the consumer it's a very odd place to be in, becau
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Amazon *IS* doing it already. I don't personally use the service very often because I prefer Trader Joes for day-to-day groceries and Costco for bulk staples. But if you want the standard brands you'll find at Safeway or of you want the fancy-pants Whole Foods stuff (Pet Food Express is even available.) delivered; it's all right there in the app. They let you set a 2-hour window and if you wait too late in the day, you may have to schedule it for the next... and the first few months of COVID crushed even
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the catch with amazon express is that the "free" delivery isn't--they even tell you the "recommended" tip.
I think, but am not sure, that Walmart expects tips for delivery (as opposed to shipping).
Give me a price and be done with it; I'm not playing this hidden cost game.
Yes we need more tax on these companies! (Score:2)
-Cryptocurrency can't collapse fast enough to save the environment, it needs a push!
Webvan (Score:2)
It seems these companies are headed tward the same fate as WV. Except this time it's due to too many competing players on the field, rather than trying to build their own warehouses and distribution centers like WV did.
I didn't RTFA, but I assume this is the case here.
Imagine that (Score:4, Interesting)
An industry that revolves around people who clip $0.25 coupons is having a hard time getting people to pay extra/more for delivery.
Idea (Score:2)
Fridge No More spent $70 on advertising to win the average customer, an investment that resulted in a $78 loss for every customer that stayed in the 10 months
If they stopped advertising, they would have less customers, and earn $8 for each customer they don't have!
Door to Door Organics (and ascetic monks) (Score:3)
Anybody remember Door to Door Organics? It closed in November 2017 after taking Thanksgiving orders. After 20 years of I guess successful operation in Denver, it went on a nationwide expansion spree, buying a startup in my area. Many startups here come out of projects from the local university's MBA program, along with money from wherever. We watch them fly and burn usually, but the one Door to Door eventually bought lasted a few years, always seeming to spend more than made sense. You had to pick up the groceries at various parking lots or pay more for home delivery.
Grocery store profit margins are notoriously thin. Only Amazon or another cash-rich company have the money to burn, and even then it may only make sense for Whole Foods customers. Unless people decide they want to pay for service. See: Uber.
And how many single-item startups, advertising heavily, are jobs programs for the children of billionaires? Looking at entrepreneurship from the jobs-at-the-top perspective makes a lot of sense. I've been reading about the Stylite ascetics ascetics of the 5th century, named after the columns they stood on all day, contemplating religion. It was a fervid time in theology, with lots of innovation, donations from urban worthies, and political implications to every nuance of biblical interpretation . For all the apparently sincerity of the ascetics, you have to wonder if it was a scam to keep from working in the fields.
Re: (Score:3)
And since MBA programs are only two years, the crackpot level is fairly high. As well as students just punching tickets for a degree - we've had a few of them come through the door to write a term paper (they use another name) on our business. They come in teams of three.
Very nice (Score:3)
Accurate inventory (Score:3)
I don't need fast delivery, I don't care if they take 2 days to deliver my order, as long as they have accurate inventory and the products I ordered are actually available. Amazon Fresh is the closest to this, much better than Safeway, last time I ordered from Safeway, half the products were unavailable or substituted (sometimes with a substitute that doesn't make sense)
Sounds like for this to work... (Score:2)
Re: (Score:2)
Whatever you say, Lizzie. ;-)