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In Vancouver, our most popular local supermarket chain (Save-on-Foods) has started offering a service where you can order groceries on the web or in an app at t

• bsharitt 10y ago
  Here in the US, many Kroger and Walmart location have online ordering with pickup already in place. So I'd imaging it wouldn't be a big jump for either of them to offer delivery. My other local grocery chain, Publix, has gone the instacart route for their grocery delivery for now.
  • lavezzi 10y ago
    This is something that has baffled me since I moved to the US. In the UK, most of the major supermarkets have offered their own online delivery service for 10+ years: https://www.theguardian.com/money/2015/may/02/online-shopping-supermarkets-home-delivery https://www.theguardian.com/money/2015/may/02/online-shoppin... Why have the major retailers here been so slow off the mark?
    • omarchowdhury 10y ago
      OK look at the size of the UK and the US and you'll get closer to your answer why this hasn't been a major development in the US.
      • ghaff 10y ago
        Yeah, but there's no requirement for services to be national or to cover areas outside cities with insufficient density. I suspect it has more to do with large US supermarkets with large parking lots and high auto ownership. [ADDED: For example, Peapod is only available in some areas of the Northeast and Midwest]
        • true_religion 10y ago
          Well since there's no-requirement for it to be national then, I'd point out that in the D.C. area there are 2 major chains that delivery groceries, and 3 others that allow online ordering and pickup at select stores. It's been done for at least 5 years.
    • amyjess 10y ago
      Tom Thumb had a delivery service during the late '90s called GroceryWorks, but it died in the dot-com bust.
      • nickjarboe 10y ago
        And then there was Webvan that IPO'ed in Nov, 1999 with a market cap north of $4.8 billion. RIP: 2001.
        • dahdum 10y ago
          Kozmo.com was another amazing one back in 2000. We would order movies and food and have them delivered in < 1 hour. One of the delivery guys even walked through our (open) door, dropped the food on the coffee table and put the VHS tape in for us. Sadly, those economics didn't work out.
  • joering2 10y ago
    Exactly until the time comes when Publix and others will see money in delivering themselves and out of their free will will ban delivery services from their stores. This service is not so popular yet (Im having hard time counting one friend who uses delivery services) but make it popular enough and Instacart and others will be out of the door. This will be similar to LA-Fitness and other chains of gyms like Gold's Gym forbidding outside trainers for training gym members. You can only hire a gym instructor that is employeed by gym you attending. Of course Instacart can ignore such ban and shop "incognito" but I doubt it would be great sales pitch to shareholders/investors.
  • MisterBastahrd 10y ago
    I know my local Albertson's and Tom Thumb both offer delivery. I find that to be of limited use, since I don't want to let the store employee search for my produce / bread / meat / milk. They're bound to find the stuff closest to clearance.
• colmvp 10y ago
  Well I could see Instacart helping (and potentially being acquired by) certain chains who simply don't want to be involved with online ordering and fulfillment. I suppose there's also the added benefit that they can choose from multiple retailers in case certain retailers carry products you can't find at others. But on the topic of delivery/fulfilment, look at some of our grocers in Canada (Metro, Loblaws, Walmart) who are worth billions of dollars, yet whose only foray into online ordering is for pickup. Wow! Innovation! A Loblaws near me was applauding itself for setting up the ability for buyers to order products online and pick it up in store, while people in the UK and parts of the US have been able to order groceries online and get it delivered for years. In 2013, Amazon Fresh expanded to SF. Full ordering and fulfilment. While in 2014, Loblaws launched the concept of click and collect, but has not expanded their offering to include delivery. It's baffling to me that neither Loblaws nor Metro have at least tested online ordering and shipping in downtown Toronto like the way Amazon Fresh expanded into major American cities.
  • paulbennett 10y ago
    Not only is it baffling to me also, its annoying as well. I came from the UK where I would order a week's shopping and get it delivered Saturday morning. I never had to visit the store and placing an order took maybe 20 minutes. Now I live in downtown Toronto and I have to walk to the store (no car here) a carry groceries home, which means at best I can purchase a few day's worth of food at a time. I would so gladly pay a reasonable amount for delivery, and I don't mean these bespoke pick-everything-and-deliver-within-an-hour services - I just want to be able to choose a time, pay maybe $5-$10 and have a week's worth of food delivered. Is that so hard Loblaws?
    • idiot_stick 10y ago
      >$5-$10 and have a week's worth of food delivered. Is that so hard Loblaws? Yes. $5-$10 isn't a lot to get time critical cargo (spoilable food) that last mile.
      • ACow_Adonis 10y ago
• petra 10y ago
  Maybe variety is key. It could be that people with extra money to spend, are really particular about what they order, and don't really look too deeply into their bills(for example they believe it when instacart says they take 15-20% margins). BTW, for the grocery market., a $3,4B valuation isn't that large .
  • criddell 10y ago
    It's pretty big. Whole Foods' market cap is under $10B. Plus I don't think Instacart is really in the grocery business. They are in the delivery business and grocery stores are their warehouses. I really have a hard time seeing $3+ billion of value there. Maybe they are thinking about getting into the grocery business though.
    • burntrelish1273 10y ago
      WF is a terrible example because organic, vegan, sustainable are now basically mainstream. I can go to almost any medium town in Texas and find a natural food store to make hummus from scratch. WF has to up the ante by doing more local, exclusive, seasonable, sustainable and experimental/incubator products to differentiate from traditional mainstream grocers and also competitors like Trader Joe's. http://www.businessinsider.com/whole-foods-biggest-problem-2015-5 http://www.businessinsider.com/whole-foods-biggest-problem-2... But the bigger issue with Instacart / Google Shopping Express is they're effectively value-add middlemen whom can be cut-out, undercut, gamed and so on. WalMart, Safeway/Vons, Amazon, Costco have the muscle ( distribution and capital) to squash them like Mr. Wonderful's proverbial cockroaches.
      • sjg007 10y ago
        Well instacart could cut out the supermarket.
  • randycupertino 10y ago
    There was a post on here recently that showed instacarts margins were double and triple what they claim. The delivery guy accidentally gave the dude the real receipt and he compared Instacarts prices to the stores actual prices, they were insanely higher. edit: update- couldn't find the specific post I was thinking of from hackernews but here's someone downthread who posted similarly outrageous findings: https://np.reddit.com/r/boston/comments/5xj47l/ever_what_instacart_is_really_charging_you_in/ https://np.reddit.com/r/boston/comments/5xj47l/ever_what_ins...
• jartelt 10y ago
  Investors are banking on the fact that grocery stores are historically bad at innovation. Some may role out delivery products, and some of those products may be good, but most grocery stores are not going to be good at developing their own ordering/delivery service. It's similar to why self-checkout still doesn't work well at many stores and why Walmart hasn't created a wonderful online shopping product. Whether or not the margins for instacart make the business model work, I don't know. But, I doubt competition from grocery store innovation is going to put them out of business.
  • ghaff 10y ago
    >not going to be good at developing their own ordering/delivery service How hard is this? Online ordering and grocery delivery is an existing thing and was before Instacart. >It's similar to why self-checkout still doesn't work well at many stores Self-checkout is a pain in the butt for things like produce. When you do a large grocery shopping, it is much easier and more efficient to have a clerk quickly scan everything (and there's usually a bagger too). There are some experiments with shoppers self-scanning as they shop. Maybe something like that can still eventually work and you deal with produce somehow. (And figure out ways to minimize losses.)
    • tyldum 10y ago
      Scan as you shop is common in certain chains in Norway, but I always observe people wondering how to scan certain things. Especially produce and special promotions. And when I tried it, no less than three scales were out of labels so had a hard time with the produce... Self checkout works better.
    • vertex-four 10y ago
      > There are some experiments with shoppers self-scanning as they shop. This was done several years ago in the UK. American grocery stores are way, way behind the times.
      • compuguy 10y ago
        Giant in the Washington DC area has had this for years.
• clairity 10y ago
  this is not quite the right question to ask, because it assumes that the delivery business is the revenue driver for instacart, and that for instacart to win, they need to be better at delivery than the grocery store. it's very hard to make such a logistics business work in the last mile because it's so inefficient. grocery stores know this, which is the reason they are reluctant to implement such services themselves, not because they afraid of innovation (rather, lots of pricing innovation happens in grocery stores, to squeeze what little margin they can out of the value chain). companies like fedex and ups subsidize last-mile through their much more efficient long-distance logistics operations, which people are willing to pay more for. the delivery service is actually a loss leader for instacart's underlying business, which is influencing purchase decisions through their app and getting paid for it. this is where brands compete with each other (just like shelf space in the store, which they also pay for), so it's where the money is. instacart also has fantastic shopping data tied to individual accounts that they can monetize in a number of ways. and then there is a bit of a winner-take-all element in that grocery stores are unlikely to want to integrate with more than one such service. this last part is where the valuation comes from - it's a bet that instacart can become critical marketing infrastructure for the grocery industry. like many others, i'm skeptical because it's a risky strategy, but if they pull it off, they get a big payday.
  • alehul 10y ago
    Off-topic, but you seem to have a really educated perspective in this sector. I'm interested and working on something in it with a lot of potential (hopefully) but lack experience. You don't have your email listed, but I'd love to get in touch if you could email me (in my profile). Thanks!
    • clairity 10y ago
      sure! i have been working on the "future of work" problem and so have thought a bit about the business models of on-demand companies like instacart (relative to what they pay their workers). and i've been lucky enough to have people with interesting perspectives to talk to about such things.
  • 10y ago
• vgchh 10y ago
  We recently launched pepperly.com, working with mom-n-pop Indian Grocery retailers in Boston area. Very early stages as it currently works with one local retailer. Order online for either pickup or delivery. Same prices as the store. However, it's not picked up enough traction. Partly it's a behavioral thing. People like to go to the grocery store and talk to the Grocer. Would love feedback or suggestions on how to improve the uptake of the service.
  • sb8244 10y ago
    Maybe it's the size of the grocer that encourages the talking crowd? I can't imagine this being as popular in larger stores, although I did have several repeat customers who I enjoyed talking to when I worked in a grocery coffee cafe.
    • vgchh 10y ago
      Definitely a factor. These are small stores with 1/2 checkout counters. And people love to talk while checking out.
• grandalf 10y ago
  > provided by the supermarkets themselves? What service do supermarkets provide themselves? I think it's debatable. Safeway in CA had delivery, and using it was a guaranteed way to get bruised, nearly un-sellable produce. Safeway must have told its pickers to pick the fruit and vegetables that were about to expire... and the same for milk, cheese, or any limited shelf-life item. Instacart has only the incentive of pleasing the customer. I've had zero issues with suboptimal produce being picked by Instacart shoppers. So I'd argue that whatever supermarkets need as a core competency to compete in the existing (pre-Instacart) market, providing high quality delivery and e-commerce experiences are not part of that. I think supermarkets are essentially market makers for household goods, produce, etc. They must understand demand in order to keep the right items in stock. Beyond that, they seem to flounder between providing super-low margins (and the corresponding slow checkout lanes) or a more premium expeirence with higher markup and other entertainment features (music, oyster bars, etc.) In the cities I've lived in, all of the in-house delivery options had significantly constrained delivery options.
• mmmmax 10y ago
  Hey, I co-founded Instacart and can offer some thoughts on this. In most cases we are helping retailers create a new delivery experience for their customers, not replacing one that exists. It's actually quite complicated to operate our business and there are economies of scale that retailers benefit from by being part of a marketplace. Also, when we talk to our customers about why they use Instacart, many of them do need groceries urgently, which is one of the reasons they use Instacart over alternatives. Most orders are delivered within 1-3 hours of being placed.
• deleted 10y ago
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• celticninja 10y ago
  This is the same in the UK, all major grocery stores (Tesco, Sainsbury's, Asda, Morrissons, Waitrose/Ocado) all allow you to order and either collect for free or have them delivered for between £2.50 and £5 depending on the delivery time. I can't see Instacart having a market outside of the US and even then major stores will start to offer their own delivery services with no price bump which will put Instacart out of business, at least at any reasonable size.
• celticninja 10y ago
  This is the same in the UK, all major grocery stores (Tesco, Sainsbury's, Asda, Morrissons, Waitrose/Ocado) all allow you to order and either collect for free or have them delivered for between £2.50 and £5 depending on the delivery time. I can't see Instacart having a market outside of the US and even then major stores will start to offer their own delivery services with no price bump which will put Instacart out of business, at least at any reasonable size.