Google Launches Fresh-Grocery Deliveries • Hacker News Board

Re: Google Launches Fresh-Grocery Deliveries

#41

Post by solidocracy » Thu, Feb 18, 2016, 7:17 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).

Drones quite clearly. They have embedded their intentions on their art work. Pretty boxes falling from the sky each with its own parachute. Its drones. They are getting in now to get skin in the game to test everything and use that data to optimize. Immediate objectives do not include profit rather get customers, create ambassadors, retailer loyalty, and bring those drones in when the timing is right.

Re: Google Launches Fresh-Grocery Deliveries

#42

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

mc32 wrote: post #38

Outdoorsman wrote: post #37

Earlier quoted context omitted.

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.

They are not selling groceries...

They are selling the convenience of having groceries delivered to your home...

The two are entirely different, the margins, as well...

Re: Google Launches Fresh-Grocery Deliveries

#43

Post by makerman1982 » Thu, Feb 18, 2016, 7:20 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 think what many comments are missing is how self driving cars play into this. Imagine a car goes to the store, pings a helper for the items, drops off the items. Wages are way lower and you have mostly capital cost.

Re: Google Launches Fresh-Grocery Deliveries

#44

Post by seanmcdirmid » Thu, Feb 18, 2016, 7:35 AM UTC

mc32 wrote: post #16

What does Google see that WebVan did not and Peapod and the USPS do not? Groceries tend to be low margin and relatively heavy goods. [And, it takes me half hour to an hour to do my shopping, and that's knowing what I want to buy in advance, knowing the store. There is not much room for profit in this scenario, except charging value added rather than flat fee. I mean they are partnering with local grocers rather than…

USPS is not allowed by congress to compete in those markets. Their charter and monopoly is quite narrow. It is definitely not the unions, a lot of republicans in congress want to see it die (e.g. By requiring very aggressive leech ding of pensions).

Re: Google Launches Fresh-Grocery Deliveries

#45

Post by kchoudhu » Thu, Feb 18, 2016, 7:36 AM UTC

Why?

Re: Google Launches Fresh-Grocery Deliveries

#46

Post by mc32 » Thu, Feb 18, 2016, 7:36 AM UTC

Outdoorsman wrote: post #42

mc32 wrote: post #38

Earlier quoted context omitted.

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.

They are not selling groceries... They are selling the convenience of having groceries delivered to your home... The two are entirely different, the margins, as well...

But the market for that convenience is noticeably smaller than the one for just affordable groceries.

And at a $10/mo subscription, that's not profitable. Hiring someone at $15/hr to pick groceries and deliver them. I don't see the math working out very well.

Re: Google Launches Fresh-Grocery Deliveries

#47

Post by nitrogen » Thu, Feb 18, 2016, 7:40 AM UTC

mc32 wrote: post #30

kevindeasis wrote: post #24

Earlier quoted context omitted.

It seems to make sense for having a fleet of self-driving cars. I think they're gonna go head to head with Uber within a decade.

That would make sense if the grocery bags were waiting to be picked up for delivery without that adding any additional cost (as I mentioned, it takes me (quite some) time to do my own shopping, imagine shopping from a list in a store you might be unfamiliar with) Let's say $300 shopping list (and cost of transport is 0): Grocery store profit: $6.00 Time to shop for $300 of groceries: 40 mins. Dollars/hour/40mins: ? W…

They could have devices similar to those used in distribution warehouses that direct pickers from aisle to aisle, picking multiple orders at a time.

Re: Google Launches Fresh-Grocery Deliveries

#48

Post by tiglionabbit » Thu, Feb 18, 2016, 7:45 AM UTC

skewart wrote: post #34

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 operati…

Well they do have self-driving cars. Maybe this is the most impressive way to start delivering stuff with them?

Re: Google Launches Fresh-Grocery Deliveries

#49

Post by notduncansmith » Thu, Feb 18, 2016, 7:52 AM UTC

I think that the comments about the profitability of grocery delivery are off the mark.

This feels like a loss-leader to get data, and perhaps later on we'll see an integration with Verily (formerly Google Life Sciences).

Re: Google Launches Fresh-Grocery Deliveries

#50

Post by roel_v » Thu, Feb 18, 2016, 7:54 AM UTC

Outdoorsman wrote: post #42

mc32 wrote: post #38

Earlier quoted context omitted.

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.

They are not selling groceries... They are selling the convenience of having groceries delivered to your home... The two are entirely different, the margins, as well...

Grocery delivery here in the Netherlands is booming, with the big supermarkets offering their own and several smaller players working on services. When I buy from the biggest supermarket here, delivery fee depends on the moment of the day you want it delivered (between 5 and 8 in the evening is the most expensive, e7 (~$10)); cheapest moment is e3 or so. But, if you buy some products delivery is free; this week it was 8 bottles of coke or so. It's pretty much always non-perishables that get you the free delivery. I don't think we've ever paid the delivery fee, maybe once or twice.

The price of the groceries is the same as in the shop. You get the specials and all. The ordering app they have even lists the specials right at the top, it's easier to order specials online than it is in-store. Dutch are very price sensitive, there is very little margin for marking up convenience.

I don't know how they can make money on this. I suspect they bet on being able to automate order picking within say 5 years and are providing the service now as a loss leader to get people used to the idea, and work out their processes using people before spending big on automation.