Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Google Launches Fresh-Grocery Deliveries

blogs.wsj.com

Post reply on HN
Print view View original

121–130 of 161 posts

Re: Google Launches Fresh-Grocery Deliveries

#121

Post by Dwolb »

_asummers wrote: post #111
Dwolb wrote: post #104

Earlier quoted context omitted.

Yup this is it. Google's bleeding money on these initiatives to preserve its crown jewel: search. More and more people are using Amazon and other services first to find stuff they need - which means lower engagement with search and lower effectiveness of paid ads. If Google can build some of these services themselves it could potentially maintain its reputation as the first stop on the customer journey.

As a slight anecdotal counterpoint to your comment about Amazon, while I often buy the product eventually from Amazon, I initially search "amazon $productname" on Google because I don't like Amazon's search.

I hear you. It's telling though you know the product is already on Amazon. You can imagine people going straight to Amazon if they know the product is there.

Re: Google Launches Fresh-Grocery Deliveries

#122

Post by noir_lord »

mbesto wrote: post #114
Dwolb wrote: post #102

Earlier quoted context omitted.

It's not that low... Amazon appears to do about 7B in EBITDA on about 100B revenue. I'd bet AWS is propping that up a bit with its really high margins. If you compare them to another grocer (which they kind of are), their numbers seem more reasonable - the industry profit margins are typically single digits.

The point is that all retail is super low margin (in this case < 10%) which is made up for in volume. For Google the only incentive is to go towards a volume play because the margins will _never_ be great. The OP's point stands - this seems odd that Google would go after such a low-margin area, considering almost everything else they do has super high margins (30%+). The challenge in the US is that volume is hard to…

If google cracks self driving vehicles then the margin would likely increase quite a bit by not paying drivers, if they applied similar technology to automate as much of the process at every part they likely could increase the margin again.

I've worked for large retailers (Staples in this instance) and they are not remotely efficiently run, bad warehouse management, bad stock management (old dated broken software), incredible lack of intelligence on stock ordering etc.

A company with the programming ability to manipulate data the way Google does could get a decent headstart on the competition in the short term (eventually others will catch up but that's the way the game is played in retail).

Hell throw in viable electric vehicles for the deliveries and you could eliminate driver costs and 2/3 of your fuel costs, that'd be a hell of a saving.

You'd also be able to offer a faster turn around time (multiple small vehicles vs multiple orders on a single van).

Throw in some nice UX stuff, real time alerts when you delivery is on the way drawn on a nice google map rather than "It'll arrive between 7-9" which means anywhere from 6:30 to 10pm in my experience and I'd sign up.

Re: Google Launches Fresh-Grocery Deliveries

#123

Post by rhino369 »

skyyler wrote: post #113
JPKab wrote: post #109

Earlier quoted context omitted.

Agreed. Additionally, this decision by Google to jump into this game has now completely screwed a big project I was working on. How? I work with retail data on behalf of large companies, and companies like Walmart and Target don't want any of the point of sale or inventory feeds they provide to their suppliers hosted on cloud infrastructure owned by a competitor. In the past, this meant absolutely no Amazon options f…

So Google should consult you before they take on a new product, just to make sure you're ok with it?

Well that would be the considerate thing to do.

Re: Google Launches Fresh-Grocery Deliveries

#124

Post by rhino369 »

fs111 wrote: post #110

They do the alphabet-rename thing to better split things into different brands, yet this is attached to the Google brand. How does that make any sense?

Because the alphabet rename was a stupid idea in the first place. There is no reason to do business under the name of your Conglomerate entity name.

Re: Google Launches Fresh-Grocery Deliveries

#126

Post by massysett »

infinite8s wrote: post #112
puranjay wrote: post #108

Earlier quoted context omitted.

I don't know if this is a factor, but isn't parking a big problem in big UK cities? If you wanted to make a grocery store run, you'd have to fret about parking and traffic. Most American cities don't really have this problem

Correction - most American suburbs don't have this problem. Grocery stores in most major American metropolises (NYC, SF, Boston, DC) can't afford the real estate for parking lots.

Most Americans do not live in cities anything like NYC, SF, Boston, or DC. Even in DC, the District of Columbia is is a relatively small jurisdiction of (generously) 700,000 people in a region of over 5 million. Even District grocery stores generally have on-site parking--perhaps over or under the store--and it is often free.

So, no correction is in order and it is perfectly accurate to say "Most American cities don't really have this problem."

Re: Google Launches Fresh-Grocery Deliveries

#127

Post by nickpsecurity »

JPKab wrote: post #109
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…

Agreed. Additionally, this decision by Google to jump into this game has now completely screwed a big project I was working on. How? I work with retail data on behalf of large companies, and companies like Walmart and Target don't want any of the point of sale or inventory feeds they provide to their suppliers hosted on cloud infrastructure owned by a competitor. In the past, this meant absolutely no Amazon options f…

That's an angle I didn't think about. Just switch to one of the other clouds like DO that's unlikely to compete on that. Also, keep your stuff provider agnostic where possible. Stuff can always happen.

Re: Google Launches Fresh-Grocery Deliveries

#128

Post by nickpsecurity »

toomanybeersies wrote: post #76
michaelt wrote: post #59

Earlier quoted context omitted.

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 count…

It certainly does make sense if you're looking at places with expensive property, like London. A supermarket takes up a huge area, and usually in areas where land tends to be expensive. Nobody wants to go to a supermarket in the middle of nowhere. I think that's where online supermarkets are going to win out over conventional supermarkets. Personally, I prefer to go to supermarkets than shop online, even if it was ch…

That's an interesting counterpoint. I haven't investigated how successful companies are in U.S. if specializing only in those areas. However, they have to have economy of scale to get low prices on stuff people want. Or buy from groups like Costco as Google is with further markup.

So, there's potential there but a lot of risk, too. Need more data on such things.

Re: Google Launches Fresh-Grocery Deliveries

#129

Post by nickpsecurity »

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…

I agree it's probably a precursor to something else. They could do all sorts of things with a good distribution chain or more data on consumer purchases. Not sure how many are good business plays but there's potential.

Re: Google Launches Fresh-Grocery Deliveries

#130

Post by nickpsecurity »

Outdoorsman wrote: post #32
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...

Companies in the grocery market have already gone bankrupt because they couldn't be competitive at billions in sales. I'd have either partnered with a strong company to invest in new stores with a profit cut plus discounted Google tech to make them competitive. Or straight up bought companies that produce things like salt, sugar, or key brands that fuel grocery sales. That's what the elites, esp Koch Brothers, are doing. It's recession-resistant, too.
Post reply on HN