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> “Instacart’s core value proposition is last-mile delivery at scale, something Amazon has always struggled with,” Is this really the case? I was under the imp

> “Instacart’s core value proposition is last-mile delivery at scale, something Amazon has always struggled with,” Is this really the case? I was under the impression that the e-commerce giant is great at last mile delivery.

twblalock 9y ago
My experience with Amazon delivery people has left a lot to be desired. They get lost, they are late, they are rude, etc.
- blazespin 9y ago
  Botlr is the future. These things work and they are amazing. https://www.nytimes.com/video/technology/100000003050865/alofts-demo-of-the-botlr-bellhop-robot.html https://www.nytimes.com/video/technology/100000003050865/alo... http://www.cnbc.com/2017/04/21/robots-are-now-deliving-food-in-san-francisco.html http://www.cnbc.com/2017/04/21/robots-are-now-deliving-food-...
azakai 9y ago
I was surprised by that too. Isn't it literally what Amazon excels at? Just a few days ago there was a story here saying how Amazon's lead in 2 day/1 day/same-day delivery was "unstoppable."
- jy1 9y ago
  Yep, but they couldn't do fresh produce that well.
saosebastiao 9y ago
Nope. Amazon absolutely struggles with it. They can hide how bad they are with it because they have a lot of cash and don't need to appeal to VCs every couple of months. That isn't to say that Instacart is better. They're nowhere near a sustainable business under their current business model. Since >75% of the costs of parcel delivery are due to the last mile, and because parcel delivery margins are so low, we can use parcel delivery prices as a rough proxy for last mile delivery costs. Last mile delivery is only viable at scale due to delivery density. USPS has extremely cheap parcel delivery because they have a government enforced monopoly on letter delivery, ensuring they basically visit every house every day no matter what. The UPS/DHL/FedEX crowd can do 1 day delivery at reasonable-ish prices due to their scale for all parcels. But Amazon and Instacart are cutting delivery windows down to 1 hr, and that absolutely destroys your delivery density...on the order of 10-15x. For the PrimeNow/Instacart business model to make sense, they need costs that are comparable to the current large parcel carriers...meaning they would need to scale their businesses to 10-15x the size of the large parcel carriers to get their prices in the range where their businesses are viable. Amazon is closer than instacart, but that is like saying a car is more likely to get you to the moon than a bicycle.
- petra 9y ago
  >> cutting delivery windows down to 1 hr, and that absolutely destroys your delivery density...on the order of 10-15x. This is of course, is the opposite of the grocery delivery model that do work: A constant weekly delivery(you can change items of course), at a fixed day/time(according to delivery times to your area), in a returnable passive cooler box before 8:00 am. You don't have to be receive. That way, after a bit of scaling, you can get to a good delivery density. But of course, that's a different offer than 1-hour delivery. But is it not appealing enough ? or is the problem that other, stronger retailers can relatively easy copy it ? Because if it's the latter, Walmart did already win(almost), at least on the logistical front, and that would explain why Amazon focuses on buying a niche company with a main skill of having unique products, and rich customers.
  - matwood 9y ago
    "A constant weekly delivery(you can change items of course), at a fixed day/time(according to delivery times to your area), in a returnable passive cooler box before 8:00 am. You don't have to be receive." I had this when I lived in Denver, and really missed it when I moved. It was basically the milk man, but they delivered milk, juice, eggs, bread, etc... They would also take the empty milk jugs and recycle them. I had a set standing order and could drop a form in my cooler for minor changes/skip the week.
- twic 9y ago
  All the supermarkets in the UK do delivery, although not to really rural places. They charge a few pounds on top of the cost of the shopping for it, with popular time slots costing more. Here are the prices and conditions from a couple of years back: https://www.theguardian.com/money/2015/may/02/online-shopping-supermarkets-home-delivery https://www.theguardian.com/money/2015/may/02/online-shoppin... The UK is, overall, denser than the US, but there is plenty of the US as dense as the least dense areas of the UK which get these services. Plus, you have cheaper petrol and cars. What would stop this model being used in the US?
  - vosper 9y ago
gaius 9y ago
I was under the impression that the e-commerce giant is great at last mile delivery. Yep - this is what really differentiates Amazon at a philosophical level from say Google. Google doesn't like dealing with people or the messy real world. Amazon rolled up their sleeves and got stuck in, saw that there was opportunity in doing something difficult rather than working around it. Amazon Logistics is a seriously impressive operation.

twblalock 9y ago

My experience with Amazon delivery people has left a lot to be desired. They get lost, they are late, they are rude, etc.

blazespin 9y ago
Botlr is the future. These things work and they are amazing. https://www.nytimes.com/video/technology/100000003050865/alofts-demo-of-the-botlr-bellhop-robot.html https://www.nytimes.com/video/technology/100000003050865/alo... http://www.cnbc.com/2017/04/21/robots-are-now-deliving-food-in-san-francisco.html http://www.cnbc.com/2017/04/21/robots-are-now-deliving-food-...

azakai 9y ago

I was surprised by that too. Isn't it literally what Amazon excels at? Just a few days ago there was a story here saying how Amazon's lead in 2 day/1 day/same-day delivery was "unstoppable."

jy1 9y ago
Yep, but they couldn't do fresh produce that well.

saosebastiao 9y ago

Nope. Amazon absolutely struggles with it. They can hide how bad they are with it because they have a lot of cash and don't need to appeal to VCs every couple of months. That isn't to say that Instacart is better. They're nowhere near a sustainable business under their current business model. Since >75% of the costs of parcel delivery are due to the last mile, and because parcel delivery margins are so low, we can use parcel delivery prices as a rough proxy for last mile delivery costs. Last mile delivery is only viable at scale due to delivery density. USPS has extremely cheap parcel delivery because they have a government enforced monopoly on letter delivery, ensuring they basically visit every house every day no matter what. The UPS/DHL/FedEX crowd can do 1 day delivery at reasonable-ish prices due to their scale for all parcels. But Amazon and Instacart are cutting delivery windows down to 1 hr, and that absolutely destroys your delivery density...on the order of 10-15x. For the PrimeNow/Instacart business model to make sense, they need costs that are comparable to the current large parcel carriers...meaning they would need to scale their businesses to 10-15x the size of the large parcel carriers to get their prices in the range where their businesses are viable. Amazon is closer than instacart, but that is like saying a car is more likely to get you to the moon than a bicycle.

petra 9y ago
>> cutting delivery windows down to 1 hr, and that absolutely destroys your delivery density...on the order of 10-15x. This is of course, is the opposite of the grocery delivery model that do work: A constant weekly delivery(you can change items of course), at a fixed day/time(according to delivery times to your area), in a returnable passive cooler box before 8:00 am. You don't have to be receive. That way, after a bit of scaling, you can get to a good delivery density. But of course, that's a different offer than 1-hour delivery. But is it not appealing enough ? or is the problem that other, stronger retailers can relatively easy copy it ? Because if it's the latter, Walmart did already win(almost), at least on the logistical front, and that would explain why Amazon focuses on buying a niche company with a main skill of having unique products, and rich customers.
- matwood 9y ago
  "A constant weekly delivery(you can change items of course), at a fixed day/time(according to delivery times to your area), in a returnable passive cooler box before 8:00 am. You don't have to be receive." I had this when I lived in Denver, and really missed it when I moved. It was basically the milk man, but they delivered milk, juice, eggs, bread, etc... They would also take the empty milk jugs and recycle them. I had a set standing order and could drop a form in my cooler for minor changes/skip the week.
twic 9y ago
All the supermarkets in the UK do delivery, although not to really rural places. They charge a few pounds on top of the cost of the shopping for it, with popular time slots costing more. Here are the prices and conditions from a couple of years back: https://www.theguardian.com/money/2015/may/02/online-shopping-supermarkets-home-delivery https://www.theguardian.com/money/2015/may/02/online-shoppin... The UK is, overall, denser than the US, but there is plenty of the US as dense as the least dense areas of the UK which get these services. Plus, you have cheaper petrol and cars. What would stop this model being used in the US?
- vosper 9y ago

gaius 9y ago

I was under the impression that the e-commerce giant is great at last mile delivery. Yep - this is what really differentiates Amazon at a philosophical level from say Google. Google doesn't like dealing with people or the messy real world. Amazon rolled up their sleeves and got stuck in, saw that there was opportunity in doing something difficult rather than working around it. Amazon Logistics is a seriously impressive operation.