
Amazon’s Grocery Push Keeps Stumbling After Whole Foods Purchase - alexhutcheson
https://www.bloomberg.com/news/articles/2018-12-20/amazon-s-grocery-push-keeps-stumbling-after-whole-foods-purchase
======
twblalock
Here are two big reasons I won't use grocery delivery:

1\. I can't see the produce/meat/seafood and pick the pieces I want. They
aren't all the same, so this matters.

2\. I can't get beer or wine delivered, and if I need to go to the grocery
store to buy it, I might as well buy all my other groceries while I'm there.

#1 is probably not solvable. #2 is solvable but the US has 50 different state
liquor law regimes, so it's a bit of a challenge.

So I'm not really surprised that Amazon isn't doing that much better than the
others. Amazon is good at delivering things, but groceries aren't good things
to deliver compared to the other stuff Amazon sells. Whole Foods in particular
caters to shoppers who care about the quality of their meat and produce and
want to examine it before they buy.

~~~
cc439
Reason #1 is a big one in my experience trying out various grocery delivery
services but the greatest problem IMO is in how there isn't a good way to deal
with things that couldn't be found or are found to be out-of-stock. 3rd-party
services don't have perfect visibility into the layout and inventory system of
every grocery chain and each of their individual locations so there is almost
always something that can't be delivered in every order. This isn't a problem
whenever I run errands myself as I will be more familiar with my go-to stores,
meaning I can find most anything (it seems many 3rd-party services push their
workers so hard in terms of efficiency metrics that they will give up on
locating an item if it isn't immediately apparent where it is) and I can also
swing by another store while I'm out if a critical item isn't in stock at my
go-to store.

Grocery delivery seemed really slick at first but after the 5th time receiving
an order that is missing a critical item, the novelty (and the time
savings/convenience/etc) wears off.

~~~
mamon
When I was ordering groceries from Instacart it let me choose the action in
case the item is missing, like choosing a possible replacement (e.g. different
brand of milk or frozen pizza) - for each individual item.

In Poland I had similar experience, and there's also an option "call me", when
the person completing my order will tell me what the issue is and let me
decide.

I realize, however, that the approach might not scale, especially when the
phone call is required.

~~~
madrox
It definitely doesn't scale. A lot also depends on the diligence of the person
shopping on your behalf. I've found YMMV quite a bit when you rely on their
judgment.

~~~
Dylan16807
With human shoppers, it should be a relatively fixed percentage of the time
spent shopping, right? Why doesn't that scale?

On the other hand if you go high-automation you'll have more accurate
inventory and the situation should _improve_.

~~~
madrox
It doesn't scale in the sense that it's harder to create a consistent
experience as you add more shoppers. Some are good; more are terrible.

------
kop316
Shopping at Whole Foods is a whole lot worse with Amazon owning it versus
before. To get any of the deals, you have to link your purchase with an Amazon
account. IIRC, they have a "blue" and "yellow" discount, where you can only
get the "yellow" discount in addition if you are also a Prime member. The
prices without either discount seemed exceed pre-Amazon Whole Foods.

The whole experience reeked of sucking up data about a person, and really made
me never want to go back.

~~~
staplers
The worst part about going through this process is to getting to checkout and
realizing I only had 1 discounted item (out of 20) that saved me 30 cents..
The labor of connecting to in-store wifi and opening the app itself almost
isn't worth the discount..

~~~
tvanantwerp
Agreed. And the rinky-dink QR scanners attached underneath the register
display almost never pick up what I'm showing it. It's the most effort by far
of any grocery rewards program I've ever used, for the least amount of
discounts. I don't even bother with the Prime discounts anymore--if the
cashier asks, I just say I'm not a member and not interested.

------
wilg
This is pretty easy to explain:

1\. Whole Foods sucks. They have poor quality items (especially produce), are
often out of stock of common things, they don't have name brand items, and the
prices aren't great.

2\. Amazon's delivery service sucks. The website and app are terrible compared
to Instacart, and only deliver from Whole Foods or Amazon.

(I am not in love with Instacart either, its almost impossible to get a
grocery delivery same-day if you decide to put in an order after 4pm in SF.
Sometimes you'll fill up your cart because it says "2 hour delivery" and by
the time you're done it says "Tomorrow Morning".)

~~~
freyir
I haven't been to Whole Foods much in the last few years, but their produce
used to be at least as good as other supermarkets, and usually better. What
are you comparing it to? Have you noticed the quality go down over time, or
have you always had issues with the produce? I agree though, their prices
aren't great, and their store brand/off-brand items are often sub par.

~~~
gecko

        I haven't been to Whole Foods much in the last few
        years, but their produce used to be at least as good as 
        other supermarkets, and usually better. What are you 
        comparing it to? Have you noticed the quality go down 
        over time, or have you always had issues with the
        produce?
    

Whole Food's produce quality has tanked since the Amazon acquisition. I'm with
you: I used to think that their produce was usually _better_ than the
competition. While that might've been changing before Amazon acquired them as
well, the produce is now awful: I sometimes _literally_ find better-quality
produce in the vending machine in my coworking space, and I can virtually
_always_ find better produce (at a cheaper price!) at Kroger, Fresh Market,
and even sometimes Trader Joe's or Target.

------
gtsteve
I think this might be because food is quite different to the other products
you buy from Amazon - you typically buy ingredients and you typically do this
once or more a week. Amazon makes a mistake every so often with a delivery but
with this sort of throughput you have a bigger window for things to go wrong.

I stopped using Amazon Fresh after a string of deliveries where entire bags
were just missing. Not out of stock, just not in the order. Of course, they
refunded me but when buying ingredients to cook something complicated it can
totally change your plans.

Their selection would change frequently. Sometimes basic things would be out
of stock for weeks, sometimes items would just disappear, even items from
common brands.

This is effectively the normal Amazon experience (good with occasional errors)
but when applied to food it's somehow considerably worse. I now use a
competitor's service; all they do is online grocery deliveries. It's very hard
to be all things to all men; sometimes specialisation is a good thing.

------
tvanantwerp
I haven't used Amazon / Whole Foods' grocery delivery (always lived within
walking distance), but I have tried other services like Peapod by Giant and
Instacart. On the whole, it's been a terrible experience. Lots of orders
botched. I once ordered two pounds of shrimp and received...two shrimp. I've
had shoppers who can't tell green onions from leeks or zucchini from cucumber.
For my last office birthday party (we do it for everyone) we ordered a
cheesecake from Instacart, and it arrived moldy. So I'm not at all surprised
that people, after having tried grocery delivery, are backing off.

As to Amazon and Whole Foods' retail experience, I feel like quality has
declined, shortages are more frequent, and using the app's QR code for deals
is painful, frustrating, and insufficiently rewarding to bother with it.

~~~
kokokokoko
Also, grocery stores tend to be closer than other retail stores. At an average
of 2.14 miles from the the average US consumer[1], added to the fact that most
US consumers that would pay extra for the use of a delivery service own a car,
are delivery services actually solving a serious pain point for the majority
of US consumers?

Is the experience of finding food on an phone or computer a tangibly better
experience than doing it in person? Is having to plan in advance for what you
want and the requirement of being home around the time of delivery actually a
better experience than hopping in the car and driving 5-ish minutes and
selecting the products in person? Do enough people trust someone else to
select their produce? For some people I would say this is true. But is there a
large enough subset of US consumers to justify the scale required for grocery
delivery to be a viable mainstream service? Or is this more of a niche
product?

I feel like this is different from other consumer goods, like electronics,
where things like price comparison, selection, reviews, and research play a
much larger role in the shopping experience and it is a mistake to assume that
grocery is an analog to other consumer goods.

[1] [https://www.ers.usda.gov/amber-waves/2015/august/most-us-
hou...](https://www.ers.usda.gov/amber-waves/2015/august/most-us-households-
do-their-main-grocery-shopping-at-supermarkets-and-supercenters-regardless-of-
income/)

From the cited article:

"The distance to the nearest supermarket or supercenter for the average U.S.
household was 2.14 miles"

~~~
petra
Yes, driving 5 minutes isn't a big deal.

>> selecting the products in person?

How long does this takes ? And how is the experience if you're a busy mom with
small children ?

So yes. Maybe you're right. Maybe large-scale grocery delivery won't happen.

But in-store pickup ? There's decent likelihood it would become a large scale
service.

And than, that would be a great time to scale a delivery business.

High consumer density for pickup, leading to high delivery density with cheap
prices, guarantees lots of online orders and that high delivery density.

------
Jgrubb
My one datapoint - I decided to stock up on beans and ordered a couple dozen
cans of the organic Whole Foods house brand. Almost every single one of them
arrived dented to hell, and then I noticed that the reviews almost unanimously
state the same thing. Apparently this is how they've chosen to get rid of cans
that they can't stock on shelves, yet they still charge the full price anyway.

Fool me once, shame on you...

------
madrox
My fiancee loves to cook, and since we live in SF without a car, she has spent
a lot of time trying out various grocery delivery services. Every single one
has problems, from cost to quality to delivery reliability. In our experience,
Instacart+Whole Foods is the most unreliable. Prime is ok, but the quality
isn't always there. We've also tried specialty delivery services for meat, but
those get expensive. We ultimately have been pretty satisfied with Good Eggs +
Thrive Market and haven't set foot in a grocery store in months.

All this is to say I think grocery delivery is the holy grail of supply chain
challenges. There is little tolerance for inefficiency at any step between
farm and table. It's easy to spot when you're out of tolerance, but difficult
to control for.

I think we're still in the early days of this space. It reminds me of the
early 2000s when cord cutting was possible, but not common. However, once it
really takes off it'll change everything.

------
Einstalbert
I use this service weekly and have had next to no issues for several months
now. The quality is as good as my local grocer, although I still prefer to
visit there for fresh meat or bakery items; the stuff you get online in terms
of "fresh" isn't bad but it is much more expensive, I've found.

I've never been to a physical Whole Foods so I can't say if their quality has
gone down as a result of this. My local grocer has a delivery service but I am
too entrenched in Amazon to try it out.

------
danial
I discovered how different the Whole Foods experience is nationwide when
visiting them in Memphis and San Diego. I wonder if some of the negative WF
comments are a reflection of that. My experience (and personal opinion) is
that Seattle tends to have a far superior experience. I _feel_ that after the
Amazon acquisition, the produce, selection and prices seem to have changed
only a little, it's the rest of the experience that tends to win me over:
brand new stores, espresso bar, hot lunch/breakfast and salad bars.

As for the delivery service, I have had a love-hate relationship with Amazon
Fresh as well as Prime Now WF delivery in the past. Having analyzed the
situation a little I realize that my satisfaction with their service is a
reflection of my state of mind. Outside of some blatant delivery issues such
as the leaving my groceries on a busy arterial in the vicinity of my home
(yes, actually happened), I have been unhappy when there wasn't an immediate
need for the groceries. This is when I tend to notice issues such as price
discrepancies, or poorly substituted items, etc. I have been much happier when
there is a burning need, such as being exceptionally busy and not having time
to make a grocery run that week. That's when the smaller issues tend to go
unnoticed.

I am glad to have their delivery service available. Once a month or so I find
things to be quite chaotic, and find it quite easy to launch an app on my
phone and get groceries a few hours later. Instacart is similarly convenient,
but none of the other stores I have tried (Safeway, Costco, etc.) come even
close. They all suck sometimes, but the WF/Amazon experience seems to sucks
less.

Somewhat related, if you have friends going through a major life event such as
having a baby, receiving the gift of free grocery delivery will make them very
happy.

------
whoisjuan
Wow, that's an ambitious title for such a poor article. Four paragraphs citing
a UBS analysts report.

And on top of that, the author has the nerve to close the article with a
disclaimer that says he wrote the article with the assistance of another
person.

~~~
gdulli
Journalism is collaborative more often than you likely think.

------
sunshinelackof
Whole foods has pivoted from your local health foods store--at a national
scale to a national superstore--at a higher quality. Grocery and especially
natural groceries are turbulent. Their customers generally check enough boxes
to end up in the enthusiast/early-adopter category. Even if the Amazon
purchase didn't turn them off, targeting the more casual "trader joes" class
makes more sense.

My personal concerns with grocery delivery and automation in general is that
the automation of my boring daily tasks might not free up more leisure time,
but more time to spend working.

------
BeetleB
I've tried 2 grocery pickup services.

One was a positive experience, but their prices are a bit high, and they
charge $5 for the service on top of it. If I do most of my groceries from
them, it'll affect my wallet too much.

The other was Walmart. Groceries are cheap, but I never got an order without a
problem. Usually, they did not have an item (as in the store never carried it)
- why can't the web site tell me that this particular store never has this
item?

Now there's a fairly well priced grocery store I shop at. I'd happily pay them
$5 each time for this service, but they don't offer it.

------
intopieces
Amazon’s grovery deliveries use far too much plastic for my taste. Every
onion, green pepper, etc is wrapped in its own thing, and then the bag has
some keep-cool-foam that I’m sure doesn’t recycle.

------
linuxftw
People here complaining about the grocery delivery, it's been fantastic for
us. We don't use it for meat or produce, but we do buy a lot of specialty
products specifically from Whole Foods that other (closer) retailers don't
have. Things like vegan cheese, specific gluten free items, etc.

We buy most of our meat and produce from another local grocery store, and now
we just order the odds and ends from whole foods. This saves us a bunch of
time so we don't have to make two stops.

------
gumby
Although there could be a problem, this article is weird. It cites expansion
in Prime Now, which is a crappy source of groceries.

Amazon deserves a lot of the blame, though, as they have such confusing
branding: Amazon Fresh (only works on web and phone); Amazon Prime Now (phone
app), Amazon Prime Pantry (hard to use), plus the amazon dash wand which
confusingly may place objects into your Fresh cart, or on a shopping list you
can find in the regular Amazon app, or in a list only available with the Alexa
app. I don't know what's going on with this supposedly customer-focused
company.

In any case: I ditched my cars last year so mostly need delivery. The cheapest
of the walking distance grocery stores is Whole Foods, and since I had so many
problems with Instacart I've pretty much adopted Amazon Fresh. It actually
works OK as long as you don't mind waiting until the next day (same day slots
are rarely available in Palo Alto). But I get veggies and meat delivered with
different services; Amazon's prices aren't that great.

~~~
philwelch
> Amazon deserves a lot of the blame, though, as they have such confusing
> branding: Amazon Fresh (only works on web and phone); Amazon Prime Now
> (phone app), Amazon Prime Pantry (hard to use), plus the amazon dash wand
> which confusingly may place objects into your Fresh cart, or on a shopping
> list you can find in the regular Amazon app, or in a list only available
> with the Alexa app. I don't know what's going on with this supposedly
> customer-focused company.

Same thing that happens to every large company: the left hand does not know
what the right hand is doing. Prime Now and Fresh are separate fiefdoms. Prime
Pantry is a vassal of the traditional retail fiefdom. (The traditional retail
fiefdom also has a "Subscribe and Save" feature, which you can discover by
shopping for something like cat food.)

In Amazon's case, it might not even be a bad idea not to have a single,
overarching, top-down strategy. Nobody has solved this business yet, and it's
faster to try multiple things concurrently than consecutively.

------
ra1n85
Ordered several times from Amazon Fresh. The delivery failure rate and prices
are high, the selection is terrible, and the quality of the food is shaky at
best.

I had a delivery person call me and need street by street instructions on how
to reach my place. I spent 20 minutes guiding them in the little bit of
Spanish I remember from high school.

------
fpgaminer
We've used Amazon Fresh in the past. They gave us a few free months, so
figured why not. Long story short, we stopped using it even with them throwing
month after month of free service at us.

Obviously, produce was hit and miss. Mostly miss. The dumbest thing was they
consistently packed produce in with cans.

Selection was terrible, and continued to get worse over time (including after
the Whole Foods acquisition, which was weird).

Minimum order kept going up. Which was a double sucker punch with the reduced
selection. Hard to fill the cart went they have hardly anything and keep
raising the minimum.

And at some point they started sneaking in a default tip. They'd just tack on
a tip without prompting you. You could change it ... if you noticed it was
there (in small font mixed in with your checkout list).

And no app support.

Fresh is probably one of Amazon's most poorly executed services.

------
ilamont
Is the problem too many services targeting people who want organic produce,
imported crackers, and meat/fish that's 2x Krogers?

~~~
sharemywin
To us clicklist is a good balance between price and convenience. And if you
have kids you save money because they aren't adding things to the cart when
your not looking. Not to mention begging for toys etc.

we also use shipt when there's no time(or its too cold) to go to the store.

------
eli
It's surprising that they aren't better at competing with Instacart even
though they own the whole store.

------
burtonator
Whole Foods employees HATE Amazon...

The deli guy literally was talking about how horrible it was there...

------
village-idiot
Now we only get groceries delivered when we’re just too sick to make it to the
store. The amount of waste plastic generated by this service is just beyond
the pale.

------
obioneis
Try using Walmart's Online Groceries - You can have it delivered to your house
or pick it up in the store.

------
philwelch
I don't think anybody has figured out grocery delivery, but I think a lot of
the obvious hazards are at least mapped by now.

The first and most obvious thing, which Amazon is at least superficially best-
equipped to handle, is the fact that existing grocery stores make for really
shitty fulfillment centers. Grocery delivery services that literally send
someone to the grocery store for you end up with probably _even worse results_
than you would get just by hiring a part-time personal assistant and telling
them to get you groceries. If you did that, at least you'd cut out the
middleman, and the person would have better incentives to not fuck up your
order in particular.

You can lay out a fulfillment center so that products can be picked and orders
assembled efficiently and unambiguously. This doesn't match how a grocery
store is laid out. A grocery store wants the shopper to be able to predict
where to find a product, or at least a product category. Every single product
is stocked directly next to every other product it possibly be confused for,
usually all smushed up together or even hidden behind each other. Also, random
members of the public walk through the shelves and throw them into chaos. Even
the flow of going through the grocery store is designed for marketing return
rather than efficiency.

The bigger part is probably that groceries are already a pretty terrible
business. Whole foods in general--produce, meat, even stuff like eggs--are
often already loss-leaders, even if you're selling them in person to a
customer who can inspect the product. Grocery stores use these to lure
customers and then sell them much more profitable packaged goods, and it works
out because competition for retail space is fierce and demand for low-margin
groceries can be a competitive advantage.

Remove that constraint and the grocery business no longer makes sense because
you can cherry-pick the best parts of the business and build a focused
delivery business. Packaged pantry goods: Amazon. Refrigerated or frozen
packaged foods on demand: GoPuff. Even if you want to deliver fresh whole
foods, you can just restrict the number of unique ingredients, hire a chef to
turn the Cartesian product of those ingredients into a list of decent recipes,
sell packaged recipes, and that's HelloFresh.

Bit by bit, other business models are going to eat away at everything that
isn't a loss-leader, and you're not left with any viable business in
delivering whatever is left. Even the cash-rich-time-poor segment is better
served by some variant of the HelloFresh model, assuming they're too time-poor
to shop for groceries but not too time-poor to cook (which is kind of a weird
assumption, although perhaps a pre-prepared "just throw into a crock pot" meal
delivery service would be viable).

------
fukbezos
Groceries are a tough business. Kroger is already at the top of their game.

~~~
spamizbad
I dunno, I shop at Mariano's, which was owned by Roundy's. Kroger bought them
up and it has really messed up the store's supply chain. Lots of shuffling of
items and produce quality has suffered. Big step down. I used to feel like
Marianos was Whole Foods done right, with lower prices. Now I'm not so sure.

