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Kroger acknowledges that its bet on robotics went too far

grocerydive.com

291–300 of 342 posts

Re: Kroger acknowledges that its bet on robotics went too far

#291

I’m regularly surprised by how important physically picking out groceries is for a large segment of the population. We have done grocery pickup for years but the pickup lanes are almost always empty while dozens of shoppers walk into the store. To me, shopping for groceries by hand is a waste of time but it clearly has some utility for a lot of people. I wonder if that inertia is making traditional grocery shopping s…

They go in to see, hear, and smell good things. They experience some products first-hand in a way that shows whether they're as advertised or not. They also know what's out of stock with many, immediate substitution options. There's also more coupon, markdown, or haggling opportunities for those who want them.

Finally, walking into stores lets you connect to people. Those who repent and follow Jesus Christ are told to share His Gospel with strangers so they can be forgiven and have eternal life. We're also to be good to them in general, listening and helping, from the short person reaching for items too high to the cashier that needs a friendly word.

We, along with non-believers, also get opportunities out of this when God makes us bump into the right people at the right time. They may become spouses, friends, or business partners. It's often called networking. However, Christians are to keep in mind God's sovereign control of every detail. Many are one-time or temporary events or observations just meant to make our lives more interesting.

Most of the above isn't available in online ordering which filters almost all of the human experience down to a narrow, efficient process a cheap AI could likely do. That process usually has no impact on eternity for anyone. Further, it has less impact on other people. Then, I have less of the experiences God designed us to have. Which includes the bad ones that build our character, like patience and forgiveness.

So, while I prefer online shopping, I try to pray God motivate me to shop in stores at times and do His will in there. Many interestings things, including impacts on people, continue to happen. Some events hit the person so hard that, even as a non-believer, they know God was behind it. I'm grateful for these stores that provide these opportunities to us.

Re: Kroger acknowledges that its bet on robotics went too far

#292

Earlier quoted context omitted.

At least for me. I buy fresh food via online ordering because I hate wasting time these days. Driving even to a nearby store takes 10mins round trip. Then having to walk through the store and fine what I need and checkout. I would much rather order online and get it delivered. Produce can still be a gamble, pickers have no incentive to pick the best produce but for the average meal, that’s fine.

We have mapped the planet, yet no grocery has a freaking map to find what you need.

That's intentional. Grocery stores are laid out to encourage you to spend more.

Like almost everything people complain about nowadays, this is not a tech problem, has never been a tech problem, and cannot be fixed with tech.

Re: Kroger acknowledges that its bet on robotics went too far

#293
post #262

Earlier quoted context omitted.

Because otherwise you'd have to do a lot more planning in advance. For instance, I called in to the patisserie this morning on a whim to treat myself to a pain au chocolat for breakfast. And I think I fancy cheese for dinner, so after work I'll nip out to the deli for some stilton and the greengrocer for walnuts and figs to go with it. I've already got fancy crackers and some good port from my last online delivery so…

Not a European, but this rings true for me in the US. I'll go out and get something, in part, because it is less lonely and feels more attached to life, to the world. Endless deliveries actually make that worse. I started buying more things locally in part because of that. It's also one of the reasons I don't really like working from home.

I'll go out and get something, in part, because it is less lonely and feels more attached to life, to the world.

When I was young, I worked in a couple of supermarkets. There were a lot of people who came in each day and bought one thing. Not because that's the one thing they needed that day, but because going to the supermarket was their only interaction with other human beings.

I was young, so I thought they were just poor planners. But there was this one guy who I knew would be in the dairy aisle at 4:35pm every day, and I started having his cup of yogurt ready for him when he walked through. It was he who explained to me why certain people were low-volume regulars.

Re: Kroger acknowledges that its bet on robotics went too far

#294

I work in this exact space (online grocery retailer in Europe). We're profitable and one of the few companies to be so in the sector - many online divisions are losing money and being bankrolled by the parent company with physical stores. Alternatively, burning VC money. The thing that's wrong with Ocado's technology is that it's ridiculously expensive and tailored for huge FC's (fulfillment centers). The problem wit…

I think there's a space for something in between Ocado and Uber Eats, in the 2010s I worked for a startup where you could book an Ocado style delivery slot for the next day from a bunch of different butchers, bakers, etc and then we'd send a van round to collect from all of them and deliver it to you. Annoyingly they ran out of money just a little bit too soon, I'm pretty sure if they'd managed to hold out until 2020…

FC's can have very efficient fundamentals if done right. Sharing shops with direct customers is very problematic - while appealing, the scaling just doen't work for them very well. They're also subject to a lot of variability due to contention with said customers.

Re: Kroger acknowledges that its bet on robotics went too far

#295

I work in this exact space (online grocery retailer in Europe). We're profitable and one of the few companies to be so in the sector - many online divisions are losing money and being bankrolled by the parent company with physical stores. Alternatively, burning VC money. The thing that's wrong with Ocado's technology is that it's ridiculously expensive and tailored for huge FC's (fulfillment centers). The problem wit…

I've done a few projects in (traditional, not pure ecommerce) retail, and in my experience it is a very low margin business. This contrasts sharply with being an innovator in the robotics space, which typically is extremely capital intensive with very long ROI trajectories.

We're proving that automation can happen in that space profitably if done right - carefully, surgically and with a small, focused team. There's Autostore in that space and that system has a massively different economics than Ocado's solution, despite the similarities.

Re: Kroger acknowledges that its bet on robotics went too far

#296

Earlier quoted context omitted.

I see Ocado vans driving up to deliver on the Isle of Skye, which I guess must come from either Fort William or Inverness. I can't imagine it's especially profitable to deliver a bag of food in a refrigerated van to somewhere that's nearly four hours driving each way.

I'd guess that they make a loss on this, but that they accept some losses in exchange for being able to say "we cover the whole country!" This is the case for pretty much any delivery business.

Meanwhile the AirBnB dwellers continue to not spend a penny locally while taking up valuable housing.

They're actually worse than the motorhome brigade.

Re: Kroger acknowledges that its bet on robotics went too far

#297
post #224

Earlier quoted context omitted.

I like to browse what is there and make decisions on what I'll be eating based on what I see. Purchasing online feels more narrow and has me thinking more about things I've cooked before vs what I might want to try cooking/eating.

Yes, it's not only pickup. Online retailers UIs are all extremely bad for browsing. One would imagine they would be better, because they can reorganize any way they want, without any limitation, personalize it to each customer, and have several different organizations at the same time available for people to pick what's best each time. But no, browsing universally sucks.

My grocery store's website (Jewel-Osco) doesn't even work on Firefox; searching for anything just gives me a loading screen that never goes away, even on a brand new profile with all cookies accepted and no adblocker or other extensions. On Chrome it works, but it's comically slow, and the mobile app is somehow even worse.

The really confusing part is the parent company's website (Albertsons) works just fine, though it is also slow.

Re: Kroger acknowledges that its bet on robotics went too far

#298
post #97

Or their online groceries didnt succeed because people can p4ice shop. I am of the belief Kroger does well because they obfuscate their prices and their tags which make it seems like they are sales truely are not. Unlike Publix if I see a discount I know it is a discount. Every other item in Kroger has a yellow tag and a red price to make you think you are getting a deal when in fact the red number is higher than reg…

What are "normal stores"? For me, Ralphs (Kroger), Stater Bros and Whole Foods are the main available (what I think of as) "normal" grocery stores, and of the three anything on sale at Ralphs is sure to be the cheapest of the three.

Re: Kroger acknowledges that its bet on robotics went too far

#299

I work in this exact space (online grocery retailer in Europe). We're profitable and one of the few companies to be so in the sector - many online divisions are losing money and being bankrolled by the parent company with physical stores. Alternatively, burning VC money. The thing that's wrong with Ocado's technology is that it's ridiculously expensive and tailored for huge FC's (fulfillment centers). The problem wit…

The grocery business has razor thin margins. There is no dry sponge remaining to absorb this kind of massive fixed cost. The business is highly variable. I think scaling up would be the only way out of this problem. Scaling down only makes it worse.

No true for us at least. Well kind of - the scale I'm mentioning is required if you're doing your own tech like we do. We develop all our core tech - the website, the logistics operation automation, the last mile app and scheduling. If we can do that profitably, what do you think will happen a company like our develops a few FC's of similar scale using the same technology?

The margins are thin, but not as razor thin as you might think. The grocery stores have a lot of overhead that we don't. Additionally, people realize that not only is that the case, but they also save from their own costs - just driving to the store is not free, let alone the time you spend, which is massively cut down.

Re: Kroger acknowledges that its bet on robotics went too far

#300

Earlier quoted context omitted.

The grocery business has razor thin margins. There is no dry sponge remaining to absorb this kind of massive fixed cost. The business is highly variable. I think scaling up would be the only way out of this problem. Scaling down only makes it worse.

Or you sell every bit of data you collect.

We don't need to do that at all. Essentially zero. Whether we'll do it in the future - I don't know. It's not really under my control, but right now we can be profitable without needing it. And we're price-competitive with the large grocery stores.
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