walkitout (walkitout) wrote,
walkitout
walkitout

BCG on the subject of same day delivery (with addenda on groceries)

This is _so_ bad it's _almost_ funny.

http://www.bcg.com/media/PressReleaseDetails.aspx?id=tcm:12-129157

I'm going to pick my favorite sentence where "favorite" means "most easily proven to be unbelievably wrong".

"Economics dictate that retailers should offer same-day delivery for only a select number of products that are small and light and that carry high margins. Electronics, office supplies, and apparel are likely candidates."

I live in the Boston area. My Favorite Grocery Store, the one I shop at all the time and where the employees ask about the kids when they aren't with me, offers Grocery Delivery. They charge $9.95 per delivery, and they don't mark up the groceries separately (right down to you get the promos current when they do the shop). While you can't actually get same day today, partly that's because you have to pick your delivery window at least 4 hours in advance, and some of the windows get fully booked out. But you can pick the earliest window tomorrow in the Natick store's delivery area as I'm writing this, which is less than 24 hours from now.

$10.

For groceries delivered to your house. At the markup I pay when I shop in the store, and I shop at _this_ grocery store (not the Natick location, but you know what I mean -- Acton is booked out till Saturday, so there's no guarantee).

What people who try to do this analysis fail to take into consideration is the cost tradeoff between having to house customers and their vehicles while they do the picking (for "free") and then have to clean up after they decide not to buy that ice cream after all and leave it in the cereal aisle and/or after their small child vomits in the bakery department VS. the cost of paying employees to pick, supply refrigerated vans to do the delivery, and paying employees to drive the vans (which the customers did for themselves for free in the previous scenario). In dense areas, the cost of supplying parking adds up, and the delivery area shrinks, so grocery delivery makes more sense in dense areas _where families still live_. Families with two incomes AND children (the gratuitously slammed affluent millenials) will pay for not having to get to the store while it is open to buy the thing their kid needs really very soon if not right now.

But hey, keep being stupid about this and I'll just laugh while the companies that understand this make money off of your surprise. Good news here: this is a disruptive innovation that actually _creates jobs_, which we need more of, right?

ETA: I should note that this particular topic tends to bring out the stupid; BCG is acting like everyone else in this category.

http://www.investopedia.com/financial-edge/0711/10-reasons-why-online-grocery-shopping-is-failing.aspx

Best sentence:

"In Europe, shoppers typically purchase ingredients for their meals the day they prepare them. While this is a less common practice in the United States, customers often do shop for food at the last minute."

I used to get suspicious whenever I saw a sentence that started with "In Europe". Now, however, I don't get suspicious. I know that the rest of the sentence will be high-grade bull pucky. I have family in the Netherlands, and not because they moved there for a job after growing up in the States: these would be the ones who didn't leave when my grandfather did. They shop for food about once a week, same as us. I think sentences like this come from people who do a capital-every-day-or-so and delude themselves into thinking that the people they meet in capital cities are anything like the rest of the country, but I'm not really sure.

Still, it's just not true, and so freaking many people in the US shop for food on a weekly basis that this argument is ridiculous. The 4 hour delivery window is a much more serious issue, and that's probably why most of the people I know who do online grocery shopping pick up the results at the store on their way home from work.

ETAYA: This is a little better:

http://www.internetretailer.com/2011/03/18/online-grocery-shoppers-home-delivery

And this is _way_ better.

http://therobinreport.com/online-based-grocery-delivery-thrives-at-last/

Alas, that website is as uneven as everything out there. Compare this:

http://therobinreport.com/why-shoppers-wont-do-supermarkets-work/

to this:

http://whatthedutch.wordpress.com/2011/02/26/grocery-shopping-of-the-future/

Shoppers will do the supermarkets work, if you structure that work correctly. Albert Heijn never gets rid of all the checkers, because they don't want to lose elderly customers who are perhaps not as enamored of the technology.

"Along with all these factors, a legal challenge has arisen in California. That state has a new law prohibiting the use of only customer-operated checkouts in stores that sell alcohol. The law was union backed and is clearly aimed at Fresh & Easy, the only chain in the nation that uses only self-checkout lanes. The chain is still contemplating how to conform to the new law."

Interestingly, the Robin Report coverage does mention Dutch supermarkets -- in the US.

"Supermarket chains Stop & Shop and Giant, both units of Ahold, issue hand-held devices to interested shoppers allowing them to scan as they fill their baskets. Fresh & Easy is experimenting with such a system too." Of course that's exactly the AH scheme, but not mention that it's up and running and successful elsewhere.

It is nice when someone else is the guinea pig, otoh, that does mean the disintermediation is that much more shocking when it finally happens. And checker jobs, honestly, are some of the better paid, better conditions jobs out there these days.

While I'm on the subject of supermarket cashiers and also on the subject of disintermediation, here's what BLS has to say about that job category:

http://www.bls.gov/ooh/sales/cashiers.htm

3ish million of them in the US, you can often get the job without even a high school diploma and make more than minimum wage (which is what I meant above). Grocery stores have more of them than any other category and even BLS expects slower than average (about half) growth in the category. Category averages young and even BLS expects tech to continue to impact the need.
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