Amazon has had, what, five years to expand its Amazon Fresh grocery delivery service? The fact that they have chosen not to implies that they haven't managed to make it cost effective. I think this speaks volumes about the feasibility of grocery delivery.
While I agree that Amazon not having much success in this market is not a great sign, it seems like there are probably a number of other reasons they haven't been expanding the service. Amazon is trying to be the one spot you buy all physical goods, but it's been proven time and time again that getting to generalized, or trying to be all things, means you can't do all of them (or sometimes any of them) well. I think a new company with this focus definitely has the best chance of success. At which point, Amazon will probably buy them.
Yes. For example Amazon offers quite a poor consumer experience for clothing and shoes, even if they do sell them. There are reasons why Zappos can thrive (and presumably why Amazon acquired them).
[Edit in response to comment below: I do not believe it is right to try something in a store and then go buy it online. Even if you believe that is okay, it actually proves that the purely-online consumer experience is sub-standard, otherwise why bother go to a store at all?
While Amazon is great at issuing refunds for, say, non-functioning electronics, they don't issue full refunds if you buy a hat and there's nothing wrong with it but it doesn't quite fit/look right, and you have to pay for return shipping. Contrast this with the Zappos approach where returns are both free, and hassle-free].
My Amazon experience for clothing and shoes is roughly the same as for all other Amazon products; I visit a physical location to actually peruse/test the product (in this case, try it on) and then order it cheaply online.
Do you have specific pain points, or is it the innate difficulty in online shopping for clothes?
>My Amazon experience for clothing and shoes is roughly the same as for all other Amazon products; I visit a physical location to actually peruse/test the product (in this case, try it on) and then order it cheaply online.
Because so many of us (including myself) now behave in this manner, I'm fairly convinced that most brick and mortar stores will have to assume an "annual dues" model a la Costco to survive. (and offer some form of competitive advantage over Amazon, of course -- ex: focusing on item discovery rather than cookie cutter merchandise, etc.)
I can't speak for the other poster, but for me, its mostly a sorting problem.
I do think Amazon has improved on this a lot. In the past I would find multiple listings, for the same product, from different merchants, under different names.
As an example, if I am looking for a specific Diesel jean I have waist, length, wash, and cut. The wash might be either described correctly, "0073N", or incorrectly "Dark blue." Looking at it now, this is much improved over where it was just a year ago.
On the other side of things, Amazon has a problem with fake products getting in their inventory by third party sellers being labelled as genuine -- another issue that has been getting better (The iPhone Charger listed as by Apple but priced like an iPhone app, was there for years.)
Personally, I wish Amazon had stuck with books. IMO, their diversification has made their site organization suffer -- especially when they allowed 3rd-party sellers to create product listings (which led to maddening duplicates).
I pray that Newegg's diversification from computer hardware won't have the same adverse effect, but it's probably a law of retail that it will.
I completely disagree. I think Amazon.come is absolutely amazing, and I do the vast majority of my shopping through it.
Bezos's intention was to offer everything under the sun when he started the company, hence the name Amazon, because of it's diversity in terms of number of species that exists there.
I compare my experience with Newegg, and although I've bought some stuff from Newegg, I will generally go with Amazon, even if it's a few dollars more expensive, because I trust Amazon so much more, and the entire experience is so much better. I'm basically their model customer, and they have me hook, line, and sinker, especially with Amazon Prime.
Maybe that was his intention, but it's hard to deny that the main focus of Amazon was (and may continue to be) books. I think it just boils down to whether or not you believe in the aforementioned idea that it's only possible to do one thing really well.
Anecdotaly, I had two experiences where my card got flagged by NewEgg, they didn't bother telling me until the next day. I cancelled the order, over nighted it from Amazon for almost exactly the same price.
I cringe every time I have to order something outside of Amazon, dreading a MasterCard secure card, frozen order, mis-packaged products, and any number of other issues that affect my physical goods purchases outside of their system.
I don't think the problem is so much that they're too diversified, its that their search functionality has done a very poor job of keeping up with and supporting that diversification.
It seems that I only have good results when I search for a specific $productname, and even then I get results for products with user comments reading something like "its not $productname but..." or "get a $productname instead". More frustrating is that these seem to be ahead of what I'm actually searching fairly often.
I really think the root problem is their allowance of 3rd-party sellers to create product listings. There needs to be a "master listing" for a specific product, to avoid the current problem of multiple duplicate listings -- which, like you said, may not actually be product X at all, but is product Y instead. It makes Amazon look like eBay.
Don't even get me started the self-published ebook spam -- is Amazon just ignoring it?
I think the problem Amazon has dug for itself is by operating at razor thin profit margins, the volume has to be massive. That of course means crossing into more and more markets, and spreading itself more thin
If Amazon sets up a physical business in any given state, they have to start collecting sales tax on all their sales to that state. So "cost effective" for Amazon Fresh means not just cost effective in isolation, but also accounting for the cost in infrastructure, lost sales, etc. that comes with collecting sales tax.
That's one of probably a dozen reasons why what works (or doesn't) for Amazon might be different for Instacart.
thurn - It does speak volumes. And, if you were to study our model, you would realize that Amazon Fresh and Instacart have very little in common. To start off - we are almost entirely a software company. Amazon Fresh, on the other hand, has warehouses, trucks and they own the inventory - completely different from us. We believe those differences are significant - and hopefully they speak volumes too :)
I used Amazon Fresh when I lived in Seattle & Redmond; and I think this appeals to a different impulse. The key with Instacart is it's (almost) instant, Amazon Fresh is not. The "hey I'm setting up for a bbq, and I need to a couple things from the grocery" is not possible with Amazon Fresh. Whether or not it's a big enough market... I guess they're going to find out!
I use Amazon Fresh as a "hey, I'm running low on eggs, soap, and paper towels. I don't care what kind I get, I just want more" type service. Works great for that.
Amazon also had years to perfect it's apparel and shoes service. That didn't stop zappos from kicking ass. And look how that turned out. The idea that an incumbent, by default, can't do something because an entrenched giant can't is laughable.
According to CNET, it's not actually a grocery logistics outfit, but a delivery company. They're just delivering groceries ... from the local supermarket. A remote shopping and delivery service, limited currently to groceries. I foresee and expansion into restaurant delivery, too.
If it bombs, it won't be because they can't keep the lettuce fresh from the field to your door, it'll be because you just can't do Ultimate Delivery for $99/yr.
Yes and no. One thing to keep in mind is that Amazon is a highly diversified company. So even if expanding Amazon Fresh to other cities would turn a profit it may not be worth it to them to put resources behind if it won't be able to turn as much profit as, say, expanding amazon proper to other countries (which they're doing) or building out the cloud business, etc.
My takeaway is that this is not profitable on the global or national scale, but on a local or regional scale, it can be. Amazon might not want to pursue a strategy with limited scalability, whereas Instacart might not even need to worry about that.
Yeah, I just don't see grocery delivery becoming feasible until it's done using UAVs. But the main issue with that (aside from getting FAA approval, which is in the works) is that it'll require retrofitting houses with delivery chutes.
This isn't as hard as you think. Place an optical indicator (like a QR code), on a piece of paper, and put it where you want the groceries to wind up. Drone finds your house. Finds your landing spot (which was presented to you via a nice "print this" dialog when you ordered), and sets the stuff down.
Alternatively, if you're going to be doing this, you can purchase and register an IR beacon that is more permanent than a piece of paper.
It's not that simple. There are a lot of people living in apartments - how's it going to work for them?
And where exactly would you place the indicator? In your front yard? Normally, delivieries are made to your porch, but the drone would have difficulty finding an optical indicator on the porch from above.
And what about groceries that need to be refrigerated? Those will need to be dealt with specially.
Oh noes, now I only have a business that delivers groceries to people with lawns. What a tiny niche business:) Seriously though, those are really lame problems. If I could sign up for a service that uses a geofence to find out when I get home and then f-ing airlifts milk to the dead center of my front lawn, I would buy so much milk.
Are you familiar with FreshDirect? It's an incredibly popular (and profitable) service for grocery delivery in NYC. As the article mentions-- in big cities, this is a viable business.
