Most grocery stores have their own brands, even the small to medium regional stores. So this should not come as a surprise that a large store will develop its own brand.
What I do want to see is the packaging. Most items are meant to be sat on shelves, and displayed to the consumers. But Amazon items won't need to sit on store shelves (just distribution centers) and don't need the packaging to sell themselves. Will Amazon come up with novel packaging optimized for delivery, or will it be more of the same?
As a kid, the grocery store's generic brand came in yellow boxes with black letter that stated what was in the box (e.g. "Corn Flakes"). There were no other markings.
I can't see Amazon letting a cereal box sit in front of someone while they eat and not try to sell them a Kindle.
Rewe in Germany is an interestingly punishing example of house brand design. Very simple design but with the word "Ja!" prominently displayed on each package. One can flip through the pdf on this page to see every single product:
God, I had to hunt down some Rewe Ja! Trauben-Nuss-Müsli (page 27 for those interested!) for a German friend last week; I guess their marketing works, because this muesli looks boring as hell!
I must confess that I am old enough to remember that this was based on an actual brand, "Plain Wrap", which was the store brand of the long-defunct Alpha Beta supermarket chain: https://pbs.twimg.com/media/CU25MNEU8AAbnvx.jpg
They actually used to stock all the Plain Wrap items in a single aisle, and the effect was like a consumer sensory deprivation tank.
Oh God, please yes. If I ever saw such products in my supermarket, I'd be buying them all. This is exactly how packaging should look like; what we currently have is ridiculous and only serves as an example that advertising isn't about informing people anymore.
Different stores had different color generics back then I remember one having blue packaging (used to call the stuff the blue food) - I think Safeway was one that used Yellow as thier generic label color.
So long as they don't revive the defunct "No Frills" brand, maybe they'll have a chance. I don't know why store brands skimp on branding and presentation. All they need is one intern churning out design and keeping a fresh look, rather than a set it and forget it approach where you have the housebrand look the same way it did when it debuted even decades later. Maybe they worry about cannibalization into higher profit brands?
> All they need is one intern churning out design and keeping a fresh look
I think changes to packaging requires market testing before you roll it out. Something as simple as a font change can confuse a customer into thinking the same product is now something completely different.
Even if the design intern is cheap, market testing isn't. I bet they stuck with the same simple packaging to keep costs down and recognition high.
Maybe, but I would think they also risk their housebrand becoming really stale.
I mean, while the contents might be the surplus/castoff from a branded producer (so quality-wise not bad), the bland packaging induces the product to languish unnecessarily and even become a liability if it doesn't move(limited space for goods).
The point of a house brand in most supermarkets is to appeal to bargain-hunting buyers. The most important part of the branding, then, is to communicate that the product is no frills.
Dated-looking branding probabky actually helps with that, which may be why even when store brands are new or updated, they are bith plain and dated-looking from the start. This also means that they don't really have a lot of reason to.keep them "fresh" most of the time.
Full on retro would be an interesting concept. Reusing box art from 1960, assuming its still in a vault somewhere, is cheaper and faster than trying to upgrade 2005 box art to 2016 current fads. And it would be kinda cool looking.
Two problems: Stealth inflation by shrinking package means the "one pound style" package will now be huge next to the current "one pound style" packages that are down to only 11 or so oz now. I suppose scaling in photoshop is pretty well understood. The other problem is the sports athlete on your 1961 Wheaties cereal box might have turned into a serial (cereal?) killer sometime in the last half century, need to research and censor some famous personalities.
I think the 'value' house brand's plainness also helps to nudge less price-conscious customers up to the next level up of own-brand stuff. Tesco used to have three levels of own-brand: the blue-and-white-stripe "Tesco value", a more "normal" looking Tesco own-brand, and the premium "Tesco Finest". I suspect the dated plain look of the 'value' range helped it avoid cannibalising sales of the mid-range versions of the same items.
In the UK, Tesco had the brand "Tesco Value" (picture [0]) from 1993 - 2012. It became one of the best selling brands in the UK, and is deemed responsible for allowing them to become the biggest supermarket in the country.
Oh god, in Poland Tesco Value (or any like-brand) stands for absolute bottom feeder junk that is "healthy" and edible enough to not kill you outright.
Sure it sells, since ~50% of population can't really afford anything else (as they work for Tesco for min wage)
It's interesting how Amazon can distance itself from such connotations
I've wondered if it's because poor people instinctively reach for the cheaper looking brand. I've done that during the times in my life when it was necessary. I've also occasionally found that the cheaper looking brand isn't actually the cheapest brand, and wondered of someone's been capitalising on that instinct.
I'd also be very interested in seeing packaging that optimizes convenience while standing on a shelf. For example, boxes of toilet paper that allow you to remove rolls from the bottom like coke cans, packages that interlock/stack more efficiently, etc.
Really good point. Personally can see it being advertising heavy. Hey if it is subsidised in any way (the way Kindle with Special Offers is) that is totally cool with me.
I've inadvertently purchased a lot of low quality junk from Amazon lately propped up by fake reviews and shady third-party dealers peddling counterfeit goods. If they want to sell me vitamins and food, they need to fix their brand. Are they a supermarket that is in control what they sell, or are they a back-alley bazaar that's strictly buyer-beware?
Unfortunately now you can't even dodge this by making sure the things you buy are sold by Amazon. They deem many products to be interchangeable so they will take "Fulfilled by Amazon" stock and commingle it with stuff from third-party sellers.
I'm not sure you really understand how commingle works?
If you have something with a UPC code, say the DVD Back to the Future, the latest edition... it will get put on the same shelf as other people with the same identical product, with the same identical UPC.
They aren't just dumping all DVDs in a big pile and picking out a random one.. its for literally identical products.
Does someone pirate DVDs and put the proper UPC on them? I guess it might happen, but how often? And if it did you tell Amazon and get a full refund and the seller is banned.
I can see reasons to not trust Amazon (the fake reviews, etc), but commingling of sealed goods is not one of them.
And by the way yes, I understand how commingling works, and Amazon says they will not do it with DVDs. I understand that Amazon says they can trace who provided the goods I receive. That protects Amazon. It does not protect me.
"[You can file a claim when] the item you received was damaged, defective, or materially different from the item represented on the product detail page."
It happens all the time with electronics, particularly chargers. And it prevents me from buying food/toiletries from amazon, because who the hell knows who they were sourced from.
Apparently you should never buy sex toys on Amazon. They're mostly low quality counterfeits, most that break easily but some that are unsafe. A lot of the good manufactures refuse to sell to anyone who has an Amazon store. Most people don't talk about it cause..sex toys. giggle
Amazon also has a book store in Seattle (a real physical bookstore). Both their air delivery and dash button ads look like they should be on a show like should be satire. But they're real. People are actually developing these things. Pretty soon we'll be consuming all the time. You'll never stop shopping.
Amazon is pretty much the new Wal-Mart. I often go out of my way to not buy thorough them and it makes me sad that they own woot now (cause those t-shirts are awesome).
Be careful if you return too many of those shitty products, they will close your account, even if you have a Prime membership. Amazon is shady as fuck and an untrustworthy retailer. The way they treat employees is beyond atrocious. Amazon makes Walmart look ethical and honest in comparison.
There have been a few documented cases but for a business with many millions of customers I don't think it's a real issue?
My return rate is around average (I guess) and I've never had a problem.
The last incident is where I put the wrong sim card in a phone and couldn't get it out. Just return it I was told and the refund came through as soon as I had printed the label.
This is 100% the direct opposite of what would happen with any other UK retailer.
Same. Well, just the first point. I've returned a ton of stuff from many sellers without a problem and sometimes I was not required to return the actual object (I just got money back).
Yes, Amazon is good for books and electronics, but I'm getting really tired of low quality household goods. I don't even know if the reviews are fake, or if people are just uncritical and give five stars for junk.
I'm finding that even electronics are going downhill because of third party sellers and Amazon blurring the line between these two entities. There are lots of people that do not even understand that a review is about the product. While things like how it was shipped, packaging, speed of delivery or color are important someone giving a 5-star review to a product because it was shipped quickly does not make for a good review. Then there are all these reviews where the seller gives a reviewer a free product in exchange for a review. Maybe they received a higher quality product? Maybe they're just shills looking for free things in exchange for writing 5-star reviews on a 2-star product?
In my mind Amazon's consumer experience has been going downhill over the last 2 years. Prime is not nearly what it used to be, shipping times have been slipping greatly and as you say, there are a lot of low quality goods. Even their prices anymore are questionable. I used to simply order a product knowing that even if it wasn't the lowest price out there it would ship quickly and the price would be comparable enough to choose convenience over another store. That's not the case anymore.
This should surprise no one. Do you purchase things? Amazon's goal is to sell you them. Then, after it figures out how you buy them, they'll work their way up and down the supply chain to improve their margins. Done.
Standard Oil's vertical integration brought low prices to what was essentially a process that has a single input and a handful of outputs. The vertical integration of Amazon would involve billions of inputs and billions of outputs. They aren't even remotely comparable, and it is likely that, due to diseconomies of scale, a vertically integrated Amazon would be less efficient than they currently are.
I was talking specifically about Amazon Fresh and the retail grocery market. Not Amazon as a whole.
The input/output dynamics don't change very much in that context (by strictly producing commodity style products), except the potential for higher-margins and more efficient distribution channels.
I doubt they can get shipping cheap enough to make much of a dent in local supermarkets. Music and books can be downloaded. Kitty litter, not so much.
Spend 10 minutes outside of a typical suburban grocery store and try to estimate the weight of everything coming out.
Will it be used? Sure. I think it's more likely that it will push grocery chains to start/improve their own delivery services. After all, they already have "distribution centers" all over the place.
I cannot foresee how this will play out in the long term for the end consumer.
In the short term, consumers get a whole lot of convenience and lower prices. What happens after a large chunk of other stores have gone out of business?
How would any new player even approach entering the market? It almost seems impossible unless Amazon systematically screws up and leaves a gap for someone to exploit.
Google Express is an interesting counter to this - the ease of online ordering while using the local stores as local inventory holders. It mostly works (though it doesn't do fresh groceries where I am). I comparison shop amazon vs. whatever's on express, and it's pretty common to find what I want more cheaply via a local vendor, particularly Costco.
I really, really hope this model makes it possible for local shops to coexist with Amazon for those of us weird enough to want to shop online. (I say that because it's worth remembering that nobody posting here is "normal" from the perspective of consumer online habits.) I can't imagine local places are going to out-compete Amazon when it comes to high $/lb or $/cm^3 items where the amortized cost of shipping is low, or cases where it's something with very slowly-moving inventory, but shipping gallon jugs of vinegar is going to have a very hard time competing against Costco.
(oblig. disclosure: Google's paying my salary this year but this comment has nothing to do with me hacking Tensorflow.)
First : According to research - "Shoppers see value and are willing to pay for the convenience of these services. A MAJORITY of shoppers consider $6 to $10 a reasonable fee for delivery to their homes, and $3 to $5 for in-vehicle or in-store pickups."
And i would add - many would probably be willing to pay something between those numbers for delivery to a fast pickup point on their way from work.
So what if we start talking about parcel lockers for food(as there are in some places), which increase last mile delivery productivity 10x according to some ? And if we designed robotic parcel lockers, built to height, so we could optimize land productivity ? And fully/mostly robotic order fulfillment ? And once eCommerce takes some grocery share, grocery prices will rise somewhat. And of course, online will have a larger selection(which tends to impact prices,by competition).
I believe they will compete more with Aldi and not regular grocery stores that offer everything.
As long as grocery stores still offer fresh fruit, meat, deli, florist etc...I will go there. If I need a box of cereal I will spend the extra $.50 for the convenience.
But on a day I just need basic necesities, Aldi or Amazon here I come!
I can't imagine ordering fresh produce without first seeing or touching it. Boxed goods like cereal is OK to order online, but I want to pick out the unbruised, best pieces of fruit of veg.
I actually use amazon fresh's delivery service and I can tell you they don't send bruised fruit/vegetables. FreshDirect here on the East coast has long solved this problem as well. They move merchandise so quickly that it never gets a chance to bruise. It's always guaranteed freshness. I will say that sometimes you won't get the sweetest piece of fruit though.
Meal-in-a-box outfits like Blue Apron seem to have mostly solved this problem. Of the 3 or 4 test orders I received from 2 such services, the produce was generally in excellent condition.
I guess a new player could offer something novel? Consumers will go for novel food choices over established ones, even if the new one is more expensive or less convenient.
But then what if Amazon systematically clones every new success? Maybe everything will be subsumed into Amazon.
Maybe traditional grocery stores could leverage their existing supply chain and adapt their brick+mortar retail facilities to become Last Mile service partners with Amazon.
Curious, will such a move by Amazon make 3rd party sellers fear them more and move to other marketplaces like jet.com or ebay.com? Given amazon's margins really come from its marketplace, they might cannibalize that? Yes, amazon's value for 3rd party sellers is its massive distribution compared to others but its a supply/demand game. If 3rd party sellers start to move to other platforms, maybe jet/ebay can spend more to acquire more demand?
Given the recent problem with fakes on Amazon I worry when they move to food - in China they now fake even eggs, rice, amongst others - how will they stop that getting started sold to their customers?
This is part of Amazon's broader strategy to completely upend traditional retail. I wouldn't be surprised if Amazon follows up by launching physical stores in city centers to shelf these private label items, in addition to its Kindle, Fire TV and Echo products. I can also see Amazon stocking online best-seller items in these stores and have the stores act as last-mile pickup locations and drone delivery centers. Just think about the amount of foot traffic these Amazon stores would generate!
I'm suprised no one had mentioned instacart in this thread. Instacart has partnered with 12 grocery chains in SF. Many of them (including wholefoods) pay instacart commission and there prices are the same as in-store. With these partnerships, instacart could deliver greater diversity of products at lower costs.
They've got a long way to go to, but are building a formidable counter to Amazons grocery play.
I'm quite sure that AMZN stinks and is a tasty short. If you're net long via index funds or whatever it's a very smart hedge that will probably score you a new car even if the wider market doesn't blow up.
Fanbois are downvoting me but this headline illustrates how Amazon operates. They pump the PR and press cycle to get a pop and work it for all it's worth for cash extraction to insiders. Their accounting practices are enron level egregious. This is going to blow up at some point.
*
Though I must add apology that this is a rather low information post with a low quality link. Mr. Kranzler details elsewhere in his feed the extent to which Amazon abuses GAAP.
Your comment here breaks two points in the HN guidelines.
You don't like me. Ban the account. Don't pretend this about fairness and rules. The "flag" shadow deletion trick is skeezy as hell. This whole thing is a system for weak passive agressive nerds.
Yah pretty much. But for some reason tech people think Amazon is better than walmart. I'm not convinced we should be enamored with technology and ignore the actual economics of their business.
I wish I could say that this decision is why I quit AmazonPrime and quit doing business with them already, but I already chose to do that due to how badly they treat customers, how high their prices are, and how limited their selection is.
Amazon doesn't provide useful value to consumers anymore, and before they roll out any more services or private label products, they should step back and see why all their customers are jumping ship (yes, quite a few people already have).
Edit: For those downvoting me, explain why you think I shouldn't have quit Amazon. They do not have good pricing, they don't have a good selection for a lot of things I want to buy, the Subscribe & Save and Pantry programs are extremely limited, and they keep shoving programs I can't use at me (Kindle related stuff, their Netflix and Google Music clones, etc).
I don't see the point in paying a per item price premium on top of a $100/yr fee for what amounts to a broken UX.
I'm guessing you're being downvoted because no one can figure out which Amazon you are referring to...certainly not the one selling a massive selection of items at very competitive prices with fast free shipping and the functional website located at amazon.com
I bought mite spray for a plant. The ad showed it come in a sprayer but it didn't; just a normal bottle. I told amazon that the product page was inaccurate, but that I had a spare sprayer bottle so I didn't care. They still refunded the purchase price and told me to keep it.
I lost a shipment of nearly $200 of books: USPS said it was delivered but I didn't receive it. Amazon send me a replacement shipment via 2-day for free with zero hassle. When the first shipment showed up weeks later, I emailed amazon. They gave me a coupon for returning them.
Amazon has proactively refunded movie purchases because they detected streaming issues. It was my wifi router acting up.
UPS -- not amazon -- had trouble delivering a gift and I had to talk to a customer service agent at amazon. Amazon gave me two free months of prime for UPS's mistake.
While I wish they would kick knockoff electronics vendors off their site, it's hard to say that amazon doesn't take care of their customers.
I'm averaging over 60 orders per year with virtually no hassle. I click and stuff shows up at my doorstep. It's like living in the future :D
They knowingly sell bad products and when you return enough of them, they'll close your account. I'd say that's some pretty bad mistreatment for their Prime customers.
For me as a parent in Manhattan, the selection covers most household shopping needs aside from adult clothes and groceries. We order once or twice a week using free two-day delivery via Prime. It's more convenient than everything except the CVS across the street, and cheaper than everything in Manhattan.
I just bought something from Amazon. To buy it in Australia would've been $149 + delivery (through the cheapest place I know). From Amazon, including international delivery, it was about $119. No annual fee. Didn't notice promos for other services you described. Seems like a good deal to me.
What I do want to see is the packaging. Most items are meant to be sat on shelves, and displayed to the consumers. But Amazon items won't need to sit on store shelves (just distribution centers) and don't need the packaging to sell themselves. Will Amazon come up with novel packaging optimized for delivery, or will it be more of the same?