
Instacart is slashing prices as the war against Amazon heats up - prostoalex
https://www.businessinsider.com/instacart-cheaper-than-amazon-whole-foods-delivery-2018-11
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dleslie
It's funny, as a Canadian, Amazon is its own worst enemy.

Hitherto there weren't many competitors that could match, or even compete
with, Amazon's stock and delivery speed. Walmart is close, as is Costco, but
Amazon is where it's at.

For quite some time Prime was... Not a good value for us. Then we got Video
and Music, to a certain extent, and it's a fair value if the content you want
is there.

But the problem, and why myself and many peers have cancelled prime and
started shopping elsewhere, is that the basis of trust in the quality of their
stock has fallen away completely. The amount of garbage with four stars or
more is scandalous, and the likelihood of receiving a knock off product is too
high. Opening a box to find a product similar to but different from what you
intended to buy is all too common.

Amazon, get your shit together before you irreparably harm your brand.

~~~
rolleiflex
Your experience with review gaming is fairly universal, it's not specific to
Canada. Amazon reviews are fundamentally untrustable at this point, to the
point there are multiple startups providing 'fake or not' services for them.

I've stopped buying anything from Amazon about two years ago. When you start
to price compare, you realise how bad of a deal Amazon has become real quick.
For the majority of the stuff I was buying, Amazon prime was marginally more
expensive. For a minority of them, it was substantially (30%+) more expensive,
and _I had no idea_.

~~~
icelancer
I use a comparator plugin and I never have this experience. I spend probably
at least $1000 a month on Amazon between personal and business and the
difference in savings is negligible at best from switching to various other
sites from Amazon (most of the time Amazon is the cheapest price).

Prime shipping has been annoying to my residence because I live in Seattle and
they use contractors which often just fuck things up for same-day delivery,
but it's never longer than 2 days. Almost no other site can match that speed
and convenience, which is the real reason any of use Prime.

If I saw the same 30% overcharging phenomenon people keep talking about on HN,
I'd probably consider switching. But it is well under 5% and probably ~0%,
honestly, and the value of my time and efficiency of shopping online is worth
quite a bit to me.

~~~
dleslie
Which plugin?

~~~
icelancer
There's tons; Wikibuy, Honey, etc, etc. I use Honey but I've used a bunch and
the results are generally the same. The paranoia inflicted upon me by HN crowd
saying I'm overpaying on Amazon by 30% makes me investigate all these claims
and I just find them all to be completely false in my case.

I'm not saying people don't have these experiences, but I don't. And even if I
did for like 5% or something, the shopping experience on Amazon is 10x better
than Walmart.com or Target.com (where it's more like 100x), and that isn't
worth nothing. It's like patio11 insisting that basis points fees aren't worth
arguing over on Stripe when you are infinitely more productive using Stripe's
developer kit vs. Authorize.net or any other terrible gateway, and people
everywhere on HN claim how expensive Stripe is and how you can save money and
don't factor in even a very conservative estimate on labor hours for a C-level
exec or a manager in a company.

It doesn't take much time saved or annoyances avoided for a high-level
executive to make a small price difference be completely irrelevant. And
that's what Amazon has mostly done.

~~~
thisacctforreal
Is it possible GP meant 30% more for a prime-compatible listing compared to a
non-prime listing?

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apapli
Prediction, instacart go bust in the next 36 months. What I have learned after
nearly 2 decades in sales is that if an organisation needs to drop their
prices to compete with a larger, more cashed up competitor, then their value
proposition is comparably weak and certainly not sufficient to carry them in
its current form over the long term.

~~~
pj_mukh
"It has also removed the 5% service fee for its Express members, a charge that
caused much controversy among customers in the past."

This was pretty much my only qualm. I'm heading back to Instacart. Pound-for-
pound, it was a better product. More personal service, better shoppers and
they were slowly getting better at keeping the inventory databases more up-to-
date.

On that last point, they have a tough fight as Amazon integrates deeply with
Whole Foods. It really breaks your product if a significant percentage of the
groceries you order isn't actually in stock.

I have Amazon Prime and still paid for Instacart.

~~~
icelancer
> More personal service, better shoppers

But will this survive with price slashes? Quality almost never stays the same
(or improves) when you get into a price war.

~~~
SN76477
Instacart shoppers are pissed - this drop in fees coincides with an adjusted
payout for shoppers.

[http://www.slate.com/blogs/future_tense/2017/11/20/workers_a...](http://www.slate.com/blogs/future_tense/2017/11/20/workers_at_instacart_planned_a_no_delivery_day_strike.html)

~~~
repsilat
It also coincides with them raising a crapload of money (hundreds of millions
iirc) at a significantly higher valuation than they had a couple of years ago.

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randallsquared
Haha. I moved to NYC this year. I used Instacart for months, because I'd have
to sign up for another service to use something else, and they mostly seemed
equivalent, and I may even have had some YC-brand-loyalty, even though I was
quite unhappy at times with Instacart.

Instacart will often allow me to order more of something than is in stock,
because they have no real concept of "in stock". For any order of more than
5-6 types of items, chances a very good that something will be missing, so you
can't rely on them for tonight's dinner -- instead, you have to order the
night before so that you have time to stop by the store yourself on the way
home from work the night you want to make the meal requiring all of those
ingredients, to get the thing(s) they allowed you to select but "couldn't
find".

I have placed orders through Instacart which didn't happen at all because they
"couldn't find" anything in the order and it was all do-not-replace.

I have placed an order through Instacart mid-day which was shopped, and then
delayed until my SO finally called them, whereupon she was told it would be
the next morning, but not to worry, everything had already been shopped, and
had been put in temperature controlled holding! But then the next day most of
the order was refunded before a few things were delivered, because the shopper
"couldn't find them".

Instacart will commonly put frozen food, bags of chips, dish soap, and 2L
sodas in the same bag together, and then roll the dice on whether things are
crushed, too warm, or otherwise came to ruin.

I may have a lot of anger built up at Instacart.

Although I've also become increasingly disgruntled with Amazon, at least I was
already signed up with Prime, so I decided a couple weeks ago to try PrimeNow.
I don't think I've used Instacart since.

I cannot stress how different the experience was:

When ordering from Amazon (not the individual grocers), PrimeNow wouldn't let
me order more 2L sodas of my usual brand/flavor than were in stock.

When I ordered something crushable, it was in a separate bag, and uncrushed.

When I ordered something frozen, _they put an icepack in with it_.

Instacart slashing prices is laughable. Price is not their main problem. I
would gladly pay twice as much, if only I could count on them, but as it is,
it's possible now that I'll never again use Instacart.

~~~
chevman
My wife and I live in Minneapolis and our experience over the past 2 years has
been basically the same as yours, expect with the companies reversed.

Instacart has been generally top notch in their logistics and customer
service. Small issues now and then, but rectified quickly and pro-actively.

Amazon PrimeNow and their Amazon restaurant delivery has been a total mess.
Cancelled orders hours after placing them, unexplained delivery glitches where
a courier attempts a delivery and leaves with all the merchandise if we don't
answer the door knock immediately, etc.

I'm not shy in letting customer service know when there are problems and even
the refund process is a mess - we've had charges refunded 3, 4, 5 times (like
I spend $100 and they end up refunding me $300 dollars!). Tried to explain to
Amazon and get in to crazy unintelligible email threads with offshore service
centers.

Finally just gave up on the whole thing with them. Will try again in a couple
years and see if things have improved.

~~~
askafriend
I'm glad you two posted your experiences and it's really useful seeing them
side by side.

It speaks to how difficult logistics like this truly is and how difficult it
is to not only scale the service but scale the quality consistently across
very different geographic regions working with very different grocers, etc.

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matthewmacleod
In the UK, all of the traditional supermarket chains moved pretty early to
build their own online grocery platforms. The services are all generally
pretty good. They seem to have successfully made that transition and kept most
of the grocery market for themselves (with the exception of Ocado, the online-
only service, which I guess is a slightly weirder example due to their supply
arrangements with one of the existing chains). As such, I can’t really imagine
anyone else entering the market, or Amazon being an effective competitor. I
don’t think I’ve ever encountered anyone using the Amazon service here.

Is there some obvious reason the same kind of market change didn’t happen in
the US?

~~~
rolleiflex
Same in Turkey as well, Migros and Carrefour kept the market to themselves by
offering delivery fast, early. Migros had an online grocery store in 2000,
even! That's early.

I think US is uniquely suited to such a thing because of its sheer size. A
supermarket company that has not built effectively a parallel supply chain
cannot accommodate allowing a guy from New York and a guy from San Francisco
to shop using the same stock, especially if perishable, because there is no
profitable way to ship something from CA to NY in a few days. That effectively
means CA and NY are, so far as groceries go, completely independent markets,
and that creates challenges that being a supermarket does not inherently give
an advantage in handling.

In contrast, UK or Turkey are countries that are sized small enough that a
lorry can cross in a day, given the need. That allows you to act like you have
a 'supermarket' in the middle of the country, and you're taking orders by the
phone, and sending them to their way. That mental model is much easier to
handle for a supermarket chain than doing continental-scale logistics that
Amazon is adept at.

~~~
matthewowen
I'm not convinced thats the reason, because that isn't how the online grocery
stores in the UK work: from my recollection, you're effectively shopping from
your local store and the options reflect that.

~~~
rolleiflex
Interesting to hear. In Turkey, they ship to the whole country for most types
of goods. Effectively treat the whole country as a single locale. With few
exceptions for things like eggs, milk, I think.

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kirubakaran
Everyone knows you should never get involved in a land war in Asia, never go
in against a Sicilian when death is on the line, and most importantly, never
get involved in a price war with Amazon.

~~~
joefourier
Is that really the case? Most of Amazon's offerings from what I can see are
priced at a premium. AWS is much pricier than competitors, and the physical
goods they sell (at least here in Europe) are either on par or more expensive
than dedicated European online stores, let alone
Aliexpress/Banggood/Gearbest/etc. In the UK/Ireland at least, the main
attraction from Amazon is convenience - for those items that are available
with Amazon Prime, the shipping is much faster than competitors. Beyond those
however, I've honestly had better deals and faster shipping with eBay.

~~~
smacktoward
The thing is that Amazon is so big and has so many other profitable lines of
business that, if they want to, they can swallow losses on the one that
happens to compete with you for as long as it takes to choke you out. You can
try to keep up with that, but since you’re not as big and diversified as they
are, you will inevitably fail. What to them is just a paper cut will be more
than deep enough to bleed you white.

(They’ll raise the prices once they’ve driven out enough competition to assume
a dominant position in the sector, of course, but that will come too late to
do you any good.)

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imranq
What advantage would instacart have over amazon? Outside of being the first
mover.

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Fire-Dragon-DoL
I still buy from Amazon, however since I moved to Canada I was quite
disappointed:

In Italy you get (from amazon), 2 years warranty on every product (yes I
returned a phone that died on me at 1 year and 8 months old, factory problem),
prime costs 40 bucks rather than 90 and the product quality is higher because
there are various local products on it. The canadian one is very messy, has
all the downsides of the u.s. one but none of the benefits (e. g. No family
view, wtf).

Still, support is great

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sjg007
I guess the get a lot of customers through the whole foods channel. I would
think that diversifying to Trader Joes, Costco, Walmart, Target etc... would
help them.

~~~
woolvalley
Target has target restock and such?

I found the proposition fairly attractive, I just wish they added fresh
grocery for target.

~~~
sjg007
Some targets sell grocery.

~~~
woolvalley
They do, but target restock doesn't seem to deliver fresh grocery, just the
dry stuff.

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ronyeh
The article didn't lay out exactly how instacart is now cheaper.

Does it factor in the 5% whole foods discount you get from being a prime
member?

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baybal2
It is my first time hearing of Instacart. Are they that popular to the extend
that they deserve comparison to Amazon?

~~~
the_clarence
You’re probably not living in the US

~~~
jccalhoun
I live in the USA and while I had heard the name "instacart" I didn't remember
what it was and had to look it up. I don't live near a major city though.

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resters
Is this true? Instacart actually just raised prices a week or two ago.

