3 ms·

Couldn't a vertical play compete effectively?

• clairity 10y ago
  it's possible, verticalization can give a cost advantage, but it also opens you up to extra customer service expenses, so i'm not sure that that's enough to overcome the expense (haven't tried to do the math though). as k-mcgrady notes in a nearby comment, groceries do home delivery in other countries like the UK, but the cost of delivery is probably now well baked into the cost of groceries. i haven't looked into how that developed - maybe delivery was successfully positioned as a premium offering with a larger surcharge and they moved down market over time and moved to a nominal surcharge (£1-5 most likely doesn't cover the cost). here in the US, there's a bit of a first mover problem since no one wants to unilaterally raise grocery prices and a delivery surcharge limits growth of the service. the other disadvantage of verticalization is that it limits access to consumer data. an aggregator like instacart will have access to comparative consumer data across stores and i think that should be far more valuable given how competitive the consumer products space is.