I live in the SF Bay Area and my local grocery store Safeway, but also Albertsons, offers home delivery. You log into their website, pick the items you want, and for a $10 fee they will collect all of the items at your local store (mine is only 2 miles away), bag the items, load them into a refrigerated truck, and deliver them INTO YOUR HOUSE within a reasonably short time window. I realize it’s different than the defunct WebVan since their is no huge central storage and loading facility with hundreds of trucks and drivers. Each grocery store must be assigned a relatively small geographic area to support.
I have used Safeway’s service and it works great. Sometimes there are screw-ups and I would certainly pick out fresh items like meat, veggies and fruit differently, but you can ask for green bananas and usually they get it right. We tried it out because we live way up a on a hill in a 4 story house, and we didn’t want to lug a week’s worth of groceries up three flights of stairs.
There is no tipping, so it really does cost only $10… a bargain in my opinion.
So how (or better why) do they do it? I see the people at the store loading up the orders, I see the trucks driving around the neighborhood at all hours, I know that the margin on food items is only a few percent… this can’t make sound economic sense to these companies and they certainly can’t “make it up in volume”.
Is it all about convenience and retaining customers in a highly competitive market? Are they so afraid of the Sam’s Clubs and Costcos? Or do they plan to raise the price down the road so that eventually they can make money doing this? It just doesn’t make sense… but it’s great!
Well I’m in Montreal, but I can’t see how the reason here would be any different. I just did this for the first time yesterday. It’s a bloody sin! Just when I thought I couldn’t get lazier! It’s quite a pampered feeling you get, I must admit.
I’d say the main reason they do it is because the ten bucks (in my case) is $6 for them doing the groceries for you, $4 for delivery. Even if some grocery dude is making $9/hour, he can get my list done within 40 minutes (he knows the store better than I do and I can get it done in that amount of time) ~ so I’m paying the extra for that. The delivery is covered also. They aren’t losing money for sure.
When you’re at the computer, making your list, you make sure you’re getting everything you need. Especially since you want your ten bucks to be worth it. Plus, if you forgot something in one section, it’s not like you have to walk to the other end of the store for it ~ it’s just a click away! So, they get a pretty big order, I get my stuff. Life is good.
It’s the epitomy of laziness. They know it, so do I. I accept it and embrace it!
I suspect they are subsidizing the service out of their “PR” budget.
The only other thing I can think of, is if they might have or think they will get a bunch of orders of only a few items which can be delivered within a few blocks of one another, so they are fill and deliver quite a few orders in one hour, ala UPS.
Computers can also id the locations of everything in the store and allow for pick tickets to be printed and allow orders to be pulled quickly with one pass through the store. Depending on how things were set up they could easily be pulling multiple orders at once as well. We do this type of thing every day in the book warehouse I work in.
5-10 minutes to pull 20-30 items for an order
couple minutes for boxup and shipping processing
ready for delivery.
A $10 an hour empoloyee can easily pull 4-6 orders an hour, so I doubt its subsidized in PR, it probably breaks even, and hopes to increase market share by offereing the service. Order picking and processing systems are far more capable these days than you might imagine.
80% of your time grocery shopping is getting to the store, deciding what to buy, and waiting in line to pay for it. They typical list would probably take 10 min at most to pull and box.
