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Google Launches Fresh-Grocery Deliveries

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Re: Google Launches Fresh-Grocery Deliveries

#51

Post by stevekemp »

bobbles wrote: post #18

Woolworths and Coles have been competing on this in Australia for some time now. You shop online in the same categories as the shelves in a real store, then arrange a 3-4 hour delivery window. So much better than going into the store, plus they do stuff like 'you bought this last time'

In the UK this is common too, all of the larger supermarkets such as Tesco, Sainsbury, and Waitrose do online delivery.

As you say they remember what you bought in the past, and our delivery slots can be booked for 60 minute windows.

Generally there's a flat-fee of £5 for a delivery, which is pretty good compared to having to having to do the job yourself.

Re: Google Launches Fresh-Grocery Deliveries

#52

Post by nikolay »

I'm pretty happy with the free and near real-time Amazon Now. Amazon Fresh is one of the rare Amazon failures. Well, it's still around, but at $299/year (well, minus $99 for Prime) plus tips for delivery - it's expensive! I got the Express trial and was happy that I'll be able to save trips to Costco, but, no, I won't as they possibly offer less than 1% of Costco's inventory, so, it's a totally useless service for me as I still need to visit the wholesaler.

Re: Google Launches Fresh-Grocery Deliveries

#53

Post by roel_v »

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…

- Reduced need for stocking staff

- Less stores needed, just distribution centers. You could have your suppliers deliver in shipping containers and have your order picking robots (in a few years) pick straight from the containers. All you'd need is a big-ass warehouse with loading docks and a few cranes.

- Customer targeting and upselling. I'd spend more of my money in a store that would know my food preferences, family makeup, habits and that would advise me on what to cook. I'd even pay for a service that would let me pick, say on Sunday, what to eat for the rest of the week (guided by good suggestion algos of course) and would then deliver the groceries for that in one or more deliveries over the week. But even without paying for that service, it would let a supermarket get near 100% of a certain customer's total spending on groceries.

Re: Google Launches Fresh-Grocery Deliveries

#54

Post by roel_v »

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.

I've been ordering fresh groceries online for a few months now (Netherlands) and while I was concerned about that as well, this hasn't shown to be a problem yet. Vegetables and fruit are very well packaged, in big styrofoam containers that have plenty of room in them, and I've never seen them stack vegetables that can't handle it (i.e., putting some lettuce on top of a cabbage isn't going to damage the cabbage).

Obviously there will be variance between suppliers, but my experience has been good and contrary to what I expected.

Re: Google Launches Fresh-Grocery Deliveries

#55

Post by Cthulhu_ »

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.

It was before my time, but I'm sure there were a lot of people that thought the same thing about self-service stores (before that you'd step up to a counter and order things, at least on this side of the pool).

Mind you, I'm sceptical myself; there's several deliver-fresh-food-to-home schemes going on here, they're far too expensive IMO and according to my colleagues, can be very pushy when it comes to maintaining a subscription model of sorts.

Re: Google Launches Fresh-Grocery Deliveries

#56

Post by alaskamiller »

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…

That's not how Google Express works. Do you live in the bay area? You have to see the ops yourself.

Membership is $95/yr, $35 min, $3-5 for rush delivery.

They get the same data feed as anyone else, just check Curbside's website and see how their Target product listings are the exact same items and same pricing.

Most of the available items are only pantry stuff, cans, jars, boxes. You can splurge but it's gonna be rare to hit $300 buying $2 to $8 items to get there.

Costco has the ball most together. They've carved out a section just for Express deliveries. Boxes, tapes, most of the common items are already stocked. Costco employees are assigned to Express duty, pick, pack, and leave it for the Express drivers to pick up. Easy peazy.

Local delivery is commoditizing to about $5 per delivery, Postmates just dropped to about $5, DoorDash is about $5, whoever's dispatch makes their vig of a few percents just by matching demand to supply. Google's strategy is just dominating by putting the big capital investments into the fleet whereas the other guys have to rely on iffy relationships with 1099 contractors.

How is this different from Webvan?

Lots and lots. The unit economics are there.

Will this work?

Yes. But only when you have the money to wait and last it out and have an automated car trick up your sleeve.

Re: Google Launches Fresh-Grocery Deliveries

#58

Post by Symbiote »

nikolay wrote: post #52

I'm pretty happy with the free and near real-time Amazon Now. Amazon Fresh is one of the rare Amazon failures. Well, it's still around, but at $299/year (well, minus $99 for Prime) plus tips for delivery - it's expensive! I got the Express trial and was happy that I'll be able to save trips to Costco, but, no, I won't as they possibly offer less than 1% of Costco's inventory, so, it's a totally useless service for me…

The UK has a very competitive market for grocery delivery. It's existed using the Internet since 1997 - it's one of the first services I remember people being attracted to.

Everything is available, and after almost 20 years they've obviously worked out how to deliver what people want (fresh / unripe / whatever).

Delivery is still £1-5 or so, depending on time, and the supermarkets often have a minimum spend (or additional charge). £40 for Tesco.

If shopping every week, that's potentially less than Amazon, and with the full range, so perhaps there's room for competition.

Re: Google Launches Fresh-Grocery Deliveries

#59

Post by michaelt »

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…

  And Google intends to compete with that using
  something with higher cost?
The UK already has at least one mass-market grocery delivery company that is profitable (albeit barely - a pre-tax profit of £11.9m on sales of £1,202.9m).

The CEO, Tim Steiner, believes in the long term they can be more efficient than bricks-and-mortar retailers by having a few large, automated warehouses fulfilling orders for the entire country. This leads to better power efficiency (no need for things like open-front refrigerators retailers need) and reduced waste (trying to keep an item in stock in 3 warehouses results in less over- and under-ordering than trying to keep the same item in stock in 300 walk-in stores).

There's a £40 minimum order, and a delivery charge (£0-£5 depending on time of day and day of week), but groceries themselves are price-matched to a major bricks-and-mortar retailer.

Of course, to get great prices from suppliers you need a large enough market share to get economies of scale / negotiating leverage. And to get that market share you need reasonable prices. Mark up the items a lot or charge too much for delivery and you'll always be a niche competitor getting poor prices from your suppliers.

(Disclosure: I work for them. And we're hiring! If you're near north London, or in Barcelona, check out https://careers.ocado.com/Search.aspx )

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