Google Launches Fresh-Grocery Deliveries • Hacker News Board

Re: Google Launches Fresh-Grocery Deliveries

#31

Post by ISL » Thu, Feb 18, 2016, 6:41 AM UTC

nickpsecurity wrote: post #27

Google usually operates in high-margin industries. This is the opposite. I've had the "privilege" of working in this one. You're talking all kinds of players working against each other for perceived self-gain with individual companies constantly pushing costs down to the point their staff can barely break even. And Google intends to compete with that using something with higher cost? Pretty crazy. I was unsurprised t…

When I was laid up in bed with an injury and used Amazon Fresh for groceries, the impulse-buy was extremely powerful, and took a different form.

Groceries would sometimes be delivered within hours, and plenty of pricey electronics and media could be had simultaneously. Prime now covers much of that draw. Speed is critical to capturing that impulse now.

Re: Google Launches Fresh-Grocery Deliveries

#32

Post by Outdoorsman » Thu, Feb 18, 2016, 6:43 AM UTC

nickpsecurity wrote: post #27

Google usually operates in high-margin industries. This is the opposite. I've had the "privilege" of working in this one. You're talking all kinds of players working against each other for perceived self-gain with individual companies constantly pushing costs down to the point their staff can barely break even. And Google intends to compete with that using something with higher cost? Pretty crazy. I was unsurprised t…

So, maybe they're diversifying?...and maybe they're betting on being able to provide a more reliable service...?

They certainly have a bit of capital to burn...

Re: Google Launches Fresh-Grocery Deliveries

#33

Post by cosmie » Thu, Feb 18, 2016, 6:45 AM UTC

mmgutz wrote: post #15

I'm skeptical this will be successful. I just can't see these kind of operations selecting ripe and fresh produce like my mother taught me from the grocery store. They're concerned about their bottom line and will send whatever is available. Good for the stores, not good for wise consumers.

Customer retention is a key concern for their bottom line, so they're incentivized to not piss off a customer by sending overripe or wilting produce. In the case of partnering with local stores, you'll end up with clashing incentives (the delivery service wants you to get the shiny apple, the store sees you as a way to pawn off the bruised one). But the delivery service can still apply pressure on the retailer, as well as instructing their drivers to do a quality control check before accepting the delivery.

Re: Google Launches Fresh-Grocery Deliveries

#34

Post by skewart » Thu, Feb 18, 2016, 6:53 AM UTC

nickpsecurity wrote: post #27

Google usually operates in high-margin industries. This is the opposite. I've had the "privilege" of working in this one. You're talking all kinds of players working against each other for perceived self-gain with individual companies constantly pushing costs down to the point their staff can barely break even. And Google intends to compete with that using something with higher cost? Pretty crazy. I was unsurprised t…

I suspect there's another reason they're doing this, and they don't actually think this will be a profitable business opportunity. Delivering groceries in 2016 is probably a strategic move in support of a larger effort that will pay off in 2019.

Perhaps it's about gathering richer data on consumer preferences and behavior. Or maybe it will help them develop autonomous vehicles in some way (having already been operating a delivery service for a while might be helpful when they start rolling out new tech).

Or maybe they're just throwing spaghetti at the wall to see if it sticks.

Re: Google Launches Fresh-Grocery Deliveries

#35

Post by Gustomaximus » Thu, Feb 18, 2016, 6:56 AM UTC

joelrunyon wrote: post #4

What's Google's USP here? This service sounds like everything Google that Google goes at great lengths to avoid (physical products, customer service, etc).

I would say this ties in nicely with self driving cars eventually. Not really a USP though. My best guess is this doesn't roll out in anymore cities and we hear little more.

Re: Google Launches Fresh-Grocery Deliveries

#36

Post by autopov » Thu, Feb 18, 2016, 7:01 AM UTC

frik wrote: post #6

Now that Amazon bought the WebVan brand, Google starts Express fresh-grocery delivery too, and we read about crazy Giphy $300mio evaluation. Btw who owns the Pets.com brand these days?

I still have a couple of WebVan's plastic bins. They went out of business soon after my order was delivered. They're still in quite good condition despite the abuse I've heaped on them. Will Google want them back?!

Re: Google Launches Fresh-Grocery Deliveries

#37

Post by Outdoorsman » Thu, Feb 18, 2016, 7:01 AM UTC

mc32 wrote: post #25

Outdoorsman wrote: post #22

Earlier quoted context omitted.

From the article they're simply entering the "delivery" market...picking up items from retail stores and transporting them to willing buyers...obviously a markup is implied...the cost of convenience... There's no holding of inventory...thus no storage-related overhead... When I was in college one of the jobs I had was at a combination "feed" mill/agri-center...the boss was 85 years old and made a speech each year whe…

There have been many players in this market, old and new. And when you don't have warehouses to automate and extract efficiency, you need people to do the picking. It takes me quite some time to do my own shopping, knowing my store's layout, knowing what I want in advance. I only see low, low margins. I mean, this is the opposite of self-checkout efficiency. They're putting more people into to the cost of the product…

Wal Mart became a giant by operating on low margins...scaling, then using scale for purchasing leverage...

I wouldn't assume that Google is paying the same price that ordinary customers are in the retail settings Google order fillers pick from..

Likely rates were negotiated before launch...

Re: Google Launches Fresh-Grocery Deliveries

#38

Post by mc32 » Thu, Feb 18, 2016, 7:04 AM UTC

Outdoorsman wrote: post #37

mc32 wrote: post #25

Earlier quoted context omitted.

There have been many players in this market, old and new. And when you don't have warehouses to automate and extract efficiency, you need people to do the picking. It takes me quite some time to do my own shopping, knowing my store's layout, knowing what I want in advance. I only see low, low margins. I mean, this is the opposite of self-checkout efficiency. They're putting more people into to the cost of the product…

Wal Mart became a giant by operating on low margins...scaling, then using scale for purchasing leverage... I wouldn't assume that Google is paying the same price that ordinary customers are in the retail settings Google order fillers pick from.. Likely rates were negotiated before launch...

Yeah but groceries are a very thin margin business half percent to two percent profits. There isn't a lot of room for negotiating great prices.

Re: Google Launches Fresh-Grocery Deliveries

#39

Post by Outdoorsman » Thu, Feb 18, 2016, 7:09 AM UTC

nickpsecurity wrote: post #27

Google usually operates in high-margin industries. This is the opposite. I've had the "privilege" of working in this one. You're talking all kinds of players working against each other for perceived self-gain with individual companies constantly pushing costs down to the point their staff can barely break even. And Google intends to compete with that using something with higher cost? Pretty crazy. I was unsurprised t…

They're not selling groceries...

They're selling convenience...

The margin on convenience is what matters...

Re: Google Launches Fresh-Grocery Deliveries

#40

Post by derefr » Thu, Feb 18, 2016, 7:12 AM UTC

nickpsecurity wrote: post #27

Google usually operates in high-margin industries. This is the opposite. I've had the "privilege" of working in this one. You're talking all kinds of players working against each other for perceived self-gain with individual companies constantly pushing costs down to the point their staff can barely break even. And Google intends to compete with that using something with higher cost? Pretty crazy. I was unsurprised t…

Is Google Fiber a high-margin business? It seems like Google has this secondary set of strategies emerging, now, involving pushing various basic services into markets, steamrolling over whatever has been holding those services back, in order to "uplift" everyone in those markets into the sort of SV yuppies that Google makes most of their money from.