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HUGE news in the grocery delivery space. Groceries are one of the few large markets that require some proximity to customers due to costs and spoilage. Each g

HUGE news in the grocery delivery space. Groceries are one of the few large markets that require some proximity to customers due to costs and spoilage. Each grocery store is a type of mini-distribution center for grocery products. Shipt and Instacart have succeeded to date because they use existing distribution channels and set up marketplaces for the "last-mile" of delivery. This is in contrast to Webvan in the early 2000's who tried to do grocery delivery by building their own distribution and failed spectacularly. Amazon has become an expert in distribution and logistics. But it is clear that using their current model doesn't generally work with groceries (RIP Webvan, 1998-2001). Bananas need to be treated much differently than books. So what does Amazon do? But Whole Foods!! A moderate sized grocery store with a significant national footprint and lots of higher income customers. Now they instantly have a pre-built distribution channel that is already optimized for the grocery business (which again is much different than non-perishable consumer goods etc). Things definitely just got interesting in this space!! I still believe that Instacart and Shipt can succeed, but they need to maintain a laser focus on making their shoppers and customers happy! And grow as fast as possible while Amazon digests Whole Foods! [Note: I was the early CTO for Shipt responsible for building their grocery delivery platform and initial engineering team. Go Shipt!]

FLUX-YOU 9y ago
> I still believe that Instacart and Shipt can succeed Amazon could just buy Shipt and/or Instacart as well, barring FTC intervention. I'm not sure what B2B partners Shipt has, but I know they have a mobile app. Joining the mobile app to Amazon would give Shipt a boost and Amazon a start, I'd imagine. [I worked with one of Shipt's mobile developers at a previous position. Go Shipt!]
- metalliqaz 9y ago
  Why buy them when they can crush them?
- kp1234321 9y ago
  Serious question: would it be beneficial for Amazon to buy out an existing grocery distribution company like Instacart when Amazon is already an expert at distribution?
  - FLUX-YOU 9y ago
    They would be paying for customers and talent. Why spend time building your own network when you can buy someone else's for the right price?
timfrietas 9y ago
AmazonFresh has been delivering groceries for years training for precisely this moment. This move allows them to very quickly expand that program nationally.
- midwestcode 9y ago
  Surprised I scrolled this far to see something about AmazonFresh... it seemed obvious to me when I heard!
samstave 9y ago
I'm just sad that true disruption isn't happening in the grocery/food sectors; buying WF, or throwing tech at food isn't a solution that will reduce food costs or feed more people... I'd rather see someone create a business that makes it so that anyone on minimum wage can support and healthily feed a family.
- harrisreynolds 9y ago
  I hear you. And agree. But that is a different problem. To eat healthy on a very low wage you need to live enough out of the city to be able plant a garden and grow your own vegetables. OR shop at a place like Aldi but make sure to buy fresh food instead of the packaged crap. But Whole Paycheck is a different market.
  - kp1234321 9y ago
    It's my understanding that growing your own food was way more expensive than buying it, even from a premium market like Whole Foods.
    - Spooky23 9y ago
      No way. You can grow vegetables for almost nothing. If you're dopey about it, you can easily spend $500 to grow $20 of tomatoes.
    - harrisreynolds 9y ago
      Seeds = cheap. Water = cheap. Dirt = free. Hard to be that price! :-) (this assumes the opportunity cost on your time is fairly low, because it would take time)
    - sh87 9y ago
      Growing your own food is expensive. Growing food for your neighbourhood is profitable if done right. Selling better food to the rich neighbourhood is even more profitable. Selling them prepared food, even more. Giving them the convenience of that delivered to their homes, much better. And finally, giving them the option of buying this online with set payment schedule and quicker deliveries. Thats Amazon + Whole Foods. No one ever lost betting on people to be lazy.
spade 9y ago
Do you think this acquisition actually opens doors for Instacart/Shipt? Existing grocery chains are now going up against Amazon. Maybe they'll be more willing to partner with Instacart/Shipt to compete?
- harrisreynolds 9y ago
  Hard to say if it opens doors or not, but it is not out of the realm of possibility. Think about this: "The enemy of my enemy is my friend." Who is Amazons BIGGEST enemy? Probably Walmart. Getting a partnership with Walmart would be HUGE for Shipt. And honestly would be good for Walmart as they try to defend their turf. Sarah Perez had a good article related to this: "Amazon wants to become Walmart before Walmart can become Amazon" (https://techcrunch.com/2017/06/16/amazon-wants-to-become-walmart-before-walmart-can-become-amazon/ https://techcrunch.com/2017/06/16/amazon-wants-to-become-wal...)

FLUX-YOU 9y ago

> I still believe that Instacart and Shipt can succeed Amazon could just buy Shipt and/or Instacart as well, barring FTC intervention. I'm not sure what B2B partners Shipt has, but I know they have a mobile app. Joining the mobile app to Amazon would give Shipt a boost and Amazon a start, I'd imagine. [I worked with one of Shipt's mobile developers at a previous position. Go Shipt!]

metalliqaz 9y ago
Why buy them when they can crush them?
kp1234321 9y ago
Serious question: would it be beneficial for Amazon to buy out an existing grocery distribution company like Instacart when Amazon is already an expert at distribution?
- FLUX-YOU 9y ago
  They would be paying for customers and talent. Why spend time building your own network when you can buy someone else's for the right price?

timfrietas 9y ago

AmazonFresh has been delivering groceries for years training for precisely this moment. This move allows them to very quickly expand that program nationally.

midwestcode 9y ago
Surprised I scrolled this far to see something about AmazonFresh... it seemed obvious to me when I heard!

samstave 9y ago

I'm just sad that true disruption isn't happening in the grocery/food sectors; buying WF, or throwing tech at food isn't a solution that will reduce food costs or feed more people... I'd rather see someone create a business that makes it so that anyone on minimum wage can support and healthily feed a family.

harrisreynolds 9y ago
I hear you. And agree. But that is a different problem. To eat healthy on a very low wage you need to live enough out of the city to be able plant a garden and grow your own vegetables. OR shop at a place like Aldi but make sure to buy fresh food instead of the packaged crap. But Whole Paycheck is a different market.
- kp1234321 9y ago
  It's my understanding that growing your own food was way more expensive than buying it, even from a premium market like Whole Foods.
  - Spooky23 9y ago
    No way. You can grow vegetables for almost nothing. If you're dopey about it, you can easily spend $500 to grow $20 of tomatoes.
  - harrisreynolds 9y ago
    Seeds = cheap. Water = cheap. Dirt = free. Hard to be that price! :-) (this assumes the opportunity cost on your time is fairly low, because it would take time)
  - sh87 9y ago
    Growing your own food is expensive. Growing food for your neighbourhood is profitable if done right. Selling better food to the rich neighbourhood is even more profitable. Selling them prepared food, even more. Giving them the convenience of that delivered to their homes, much better. And finally, giving them the option of buying this online with set payment schedule and quicker deliveries. Thats Amazon + Whole Foods. No one ever lost betting on people to be lazy.

spade 9y ago

Do you think this acquisition actually opens doors for Instacart/Shipt? Existing grocery chains are now going up against Amazon. Maybe they'll be more willing to partner with Instacart/Shipt to compete?

harrisreynolds 9y ago
Hard to say if it opens doors or not, but it is not out of the realm of possibility. Think about this: "The enemy of my enemy is my friend." Who is Amazons BIGGEST enemy? Probably Walmart. Getting a partnership with Walmart would be HUGE for Shipt. And honestly would be good for Walmart as they try to defend their turf. Sarah Perez had a good article related to this: "Amazon wants to become Walmart before Walmart can become Amazon" (https://techcrunch.com/2017/06/16/amazon-wants-to-become-walmart-before-walmart-can-become-amazon/ https://techcrunch.com/2017/06/16/amazon-wants-to-become-wal...)