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Costco is the anti-Amazon

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Re: Costco is the anti-Amazon

#31

The part about Costco choosing to avoid the last mile shipping problem reminded me of a proverb, roughly translated as: A clever person solves a problem; a wise person avoids it. I think it holds a lot of truth in engineering.

Both spectrums are hard. Solving last mile is really really hard, but if you do that's a huge moat (aka Amazon). If you avoid last mile, you best deliver value in some other way, which Costco does by giving you more per dollar than anyone else.

Re: Costco is the anti-Amazon

#32
I admired Costco for installing USA-made manhole covers rather than use those made in India, which most municipalities have shifted to for lower cost.

I’m probably the only person who would notice that. Sort of how Steve Jobs explained that a good carpenter cares about the backside of the dresser as much as the front, even if no customer will ever notice.

Re: Costco is the anti-Amazon

#33
> Even if you think it is preferable at an individual level, there are good reasons to question the social value of the logistical complexity that it necessitates. Home delivery of single-packaged items entails an entirely different cost structure than freight trucks driving to consumer-facing warehouses delivering entire pallets of goods to be driven home by customers themselves.

Ok, so 100 people can all drive to the store, or one delivery truck can drive to everyone's house. (Ignoring the packaging waste for a second,) I suspect delivery of single items cuts back significantly on trips to the store.

Re: Costco is the anti-Amazon

#35
post #12

> To put it crudely, having someone in a Sprinter van deliver a recently-purchased toothbrush to your doorstep is simply not a universalizable action, from either a business or logistical standpoint. It is a modern feat that Amazon is capable of doing this, but that it can be done does not mean that it should, nor even that it can be done writ large. For most consumption, it is far more efficient for people to handle…

Here's one study sort that answers your question https://news.umich.edu/carbon-emissions-and-grocery-shopping... In-store pickup using a internal combustion engined vehicle produced more emissions than any other option studied.

Great, thanks. Here's the abstract. And for context, it's a collaboration with Ford Motor Co.

... We report and compare the greenhouse gas (GHG) emissions for a 36-item grocery basket transported along 72 unique paths from a centralized warehouse to the customer, including impacts of micro-fulfillment centers, refrigeration, vehicle automation, and last-mile transportation. Our base case is in-store shopping with last-mile transportation using an internal combustion engine (ICE) SUV (6.0 kg CO2e). The results indicate that emissions reductions could be achieved by e-commerce with micro-fulfillment centers (16-54%), customer vehicle electrification (18-42%), or grocery delivery (22-65%) compared to the base case. In-store shopping with an ICE pick-up truck has the highest emissions of all paths investigated (6.9 kg CO2e) while delivery using a sidewalk automated robot has the least (1.0 kg CO2e). Shopping frequency is an important factor for households to consider, e.g. halving shopping frequency can reduce GHG emissions by 44%. Trip chaining also offers an opportunity to reduce emissions with approximately 50% savings compared to the base case. Opportunities for grocers and households to reduce grocery supply chain carbon footprints are identified and discussed.

It's interesting that consumers driving EVs reduce the cost on the same scale as deliveries (presumably in an ICE vehicle).

They omit apples-to-apples comparisons (at least from the press release and abstract)

  * Consumer ICE vs. Delivery service ICE
  * Consumer EV vs Delivery service EV
  * Sidewalk delivery robot vs Bicycle or ebike
The last is a bit bizarre - comparing a 2-mile radius sidewalk mechanism to pickup trucks and delivery vans, but omitting the very popular 2-mile delivery method.

Re: Costco is the anti-Amazon

#36
post #12

> To put it crudely, having someone in a Sprinter van deliver a recently-purchased toothbrush to your doorstep is simply not a universalizable action, from either a business or logistical standpoint. It is a modern feat that Amazon is capable of doing this, but that it can be done does not mean that it should, nor even that it can be done writ large. For most consumption, it is far more efficient for people to handle…

Also this argument is easily refuted by the US Postal Service, which physically delivers individual pieces of paper in a few days, for pennies.

Right but that’s a government service and it should be totally fine for them to deliver mail below cost using taxpayer money to make up the deficit.

Like every other government service - highways, defense, etc. They’re profitable to the system, but not per se.

Re: Costco is the anti-Amazon

#37
I like the idea that Costco and Amazon are diametric opposites — for example I couldn't shop at Costco for a very very long time because I lived in the city and didn't have a car.

Amazon and other delivery companies (e.g. Weee) came to the rescue. For a while I lived close enough to a Costco for a 20 minute bike, so I'd load up my gym bag full of food - even then Costco is not ideal because there's only so much you can carry (one thing of meat, one thing of eggs, some veggies).

For those that think Costco are the uber-shopping experience are missing that they both provide very opposite consumer experiences. (Yes Costco has shipping, and same day shipping, but it hits different from Amazon).

This is also opposite to corner store grocery systems where you can pop in at any moment to get fresh fruit, a wider choice, smaller quantities at more flexible hours etc.

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tldr - what I think I'm saying is that Costco is the perfect "suburban" purchasing experience - great if you tick the boxes that you have a big family (otherwise why do you need a 60 pack of toilet paper), a big house (where do you fit all that toilet paper), a car (to transport the toilet paper), etc.

anyone who don't tick those boxes can't really take advantage of any of that - so while Costco is amazing, it definitely shouldn't be the only way to shop.

Re: Costco is the anti-Amazon

#38
post #33

> Even if you think it is preferable at an individual level, there are good reasons to question the social value of the logistical complexity that it necessitates. Home delivery of single-packaged items entails an entirely different cost structure than freight trucks driving to consumer-facing warehouses delivering entire pallets of goods to be driven home by customers themselves. Ok, so 100 people can all drive to t…

Those individual trips to the store are typically for more than single items, and are often incorporated into trips one would have taken anyways as part of the doing of errands.

Re: Costco is the anti-Amazon

#39
post #33

> Even if you think it is preferable at an individual level, there are good reasons to question the social value of the logistical complexity that it necessitates. Home delivery of single-packaged items entails an entirely different cost structure than freight trucks driving to consumer-facing warehouses delivering entire pallets of goods to be driven home by customers themselves. Ok, so 100 people can all drive to t…

> But to date it has still not been able to make the conversion away from being an online convenience store, which tells you something important about its model: Amazon is there to fill in the gaps of a dominant mode of goods procurement, not to replace it.

Either we can view single-packaged items as a gap in the goods procurement process, or we remove the means (Amazon) and view it as a forcing function to not have single-packaged items since a certain % of 100 people will start batching before they drive to the store.

Re: Costco is the anti-Amazon

#40

Earlier quoted context omitted.

Also this argument is easily refuted by the US Postal Service, which physically delivers individual pieces of paper in a few days, for pennies.

Right but that’s a government service and it should be totally fine for them to deliver mail below cost using taxpayer money to make up the deficit. Like every other government service - highways, defense, etc. They’re profitable to the system, but not per se.

The US Post Office is funded by its own revenue, I'm pretty sure.
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