This is an interesting concept. But I see a couple of issues:
- You need physical stores. These take a lot of money and expertise to set up and run. And to expand/scale in any meaningful way will take a LOT of money. Plus of course you've got the added expense of having to actually do the shopping on behalf of your customers (ie walk round your inventory and fill the basket). Kind of the opposite to the Ikea model. As Ryan Air have conclusively proved, people will put up with ANYTHING if it's cheap(er).
- Your stores are going to have to be as big as a supermarket to really be of use to people.
And on the competition side:
- What's the advantage over just ordering my goods online from a supermarket? I don't even need to go to the store then, they just get delivered to my front door. Or do supermarkets not do this in the US? IN the UK at any rate you can choose very specific delivery times as well.
And on the marketing side:
- 40 minutes in a grocery store? You can easily spend this much time online filling up your basket. Personally I've never felt that online ordering has saved me much time. The USP of online shopping is not time saving, it's "when" saving - I can do it during a quiet time at work for example. But with Ernies I still gotta go pick it up...
- 73 hours per year? Doesn't sound like much to me. And walking round the store is healthier than sitting in front of your PC :)
"You need physical stores": Sort of. We need physical warehouses. The core of the Ernie's business model is that these locations will be much cheaper to operate than the traditional grocery storefront, therefore increasing net margins. They will take expertise to operate; luckily, this expertise is well-established and readily available.
"Your stores are going to have to be as big as a supermarket": Not necessarily. Our SKU count will have to be big enough to be compelling. But Trader Joe's has proven that a very low SKU count can still be compelling if the value proposition is there. Trader Joe's value prop is low prices. Ernie's is convenience. On top of that, we're cramming our SKUs into a warehouse layout. Our real estate footprint will be much, much smaller than a supermarket.
"What's the advantage over just ordering my goods online... ?": The advantage is in the operations model. Home delivery will always be a much more expensive grocery offering. This results in some combination of fees and/or higher prices. Ernie's is not price premium offering. No fees. It's cheaper for us to sell the same can of beans to you than it is for Safeway. Much less than a home delivery offering.
"40 minutes in a grocery store? / 73 hours per year?": We'll just have to agree to disagree on these points. Those folks that hate wandering around the grocery (or have small children, or are physically challenged, or have better things to do with their time) are who we are marketing to. I, for one, look forward to getting 3 days of my life back every year. :)
I live in the south east of the US (where this store is hoping to open) and there are no grocery stores that allow you to order online here. The only option is to go to the store and shop for yourself.
You are right that you could spend 40 minutes filling up your online basket, but what if you could save your basket and re-order it the next time you "go shopping." Thus you fill up your basket with the items you already buy every time you go the grocery store, then you never have to fill it up again...Could be a big time saver.
And 73 hours per year to me I think in terms of what else could I be doing with that time? My going rate is $80 per hour so that's $5840 I could be making instead of grocery shopping. And sure it's more fit to walk around the store, but perhaps I'd rather go to the gym and actually do a real work out?
[quote]- 40 minutes in a grocery store? You can easily spend this much time online filling up your basket. Personally I've never felt that online ordering has saved me much time. [/quote]
Actually, there is something that I have been saving time with and if Ernie's does this, it would be wonderful.
Amazon started creating the ability to have subscriptions for food items. Basically, stuff that I will go through every month and would have to fight my way through CostCo or Sams to get otherwise. For stuff with comparable prices, I may as well just have it shipped in free under Prime instead.
My grocery list is 90% the same every week/two weeks so if I had a saved template to reorder from, that saves me the half hour of pacing the store to get the same exact stuff for the same price, I'd be all for it.
"Your stores are going to have to be as big as a supermarket to really be of use to people."
Not necessarily. You could make more efficient use of space if you don't have to arrange the store to be customer-friendly.
"I don't even need to go to the store then, they just get delivered to my front door. Or do supermarkets not do this in the US?" Most places, no. Where they do, it's more expensive.
"Personally I've never felt that online ordering has saved me much time."
It certainly could if it were done well. Don't you normally buy a lot of the same things? A good interface would remember that and help you reorder favorite items quickly. Also, groups of items - "all the stuff I need to make recipe X." The store could even upsell by suggesting a recipe and selling you all the items you need to make it, then including a printout of it.
Think how quickly you could shop if you could specify the meals you want to make this week instead of looking for each item individually.
We are actively seeking additional investors to help us open our first location. We have commitments from local investors that have us 25% towards our fundraising goal. I have yet to seriously pitch any investors outside the mid-south, which is one of my reasons for posting here on HN. I would dearly love to give my brief investor pitch to anyone seriously interested in the concept.
The consumer value proposition is covered in the video linked above. The business value prop boils down to this: double-digit net margins. Seriously.
I hope you manage to run with this. I'm sick of wasting so much time in the grocery store and I've been willing to pay to avoid it for a while now. Of course, there are some requirements:
Excellent interface. I have to be able to browse your selection as easily as I can browse in a store. This means I can find things I didn't intend to find. (That's good for you and me, both.)
Fast service at the curb. There's no point in saving the time inside the store if I just waste it sitting in the parking lot.
Reliable time estimates. (Actually, this dove-tails with the last one, doesn't it?)
Selection. I know you said you have selection, but I've yet to find 2 stores that had the same selection. I'm not terribly set on brands, but it does matter sometimes.
Stock. As in, things had better be in stock. Nothing makes me angrier than when the store is out of something I need. Yes, not even long lines.
Deli/Bakery/etc. When you've just dealt with a shopping trip, you don't feel like cooking that night. Bringing home something delicious and/or hot is a must.
And you should seriously consider delivery, and not just curb-side. I know it's a logistical nightmare, but it eliminates 2 of the things above quite neatly.
I also love the possibilities for the store itself. Because the customer never enters the store, all the standard storefront stuff is eliminated. You can use portable tablet registers to let the customer pay, and standard shopping carts are eliminated. You can use whatever is most efficient, or even invent something to make it better. And you can start off with people plucking things from shelves, but it may become economical to have robots doing that. (I believe Amazon does that, but they're pretty big and centralized.)
In short, do it right and you'll make me (and a lot of other people) really happy.
Delivery sounds nice but it could quickly balloon to be the most expensive part of the business. Packaging, mobile refrigeration, etc. I like that they're focusing on curb-side pickup. I know I hate shopping with kids. I'd love to just be able to scoot by and pick up my regular stuff while they're in the backseat.
We have built a streamlined interface that is uniquely designed to handle grocery shopping. We believe that there is a fundamental difference in shopping for groceries online and the way we shop for other consumer merchandise (such as clothes or books). Being fast, intuitive and discoverable are the overarching goals.
"you should seriously consider delivery"
At a later date, perhaps. "Logistical nightmare" is absolutely right. When/if we do delivery, I want to treat it as an outsourced add-on priced at/near cost (which will still mean a hefty delivery charge in low population density areas).
"I also love the possibilities for the store itself"
Absolutely. In addition to your suggestions, consider the long-term opportunities related to merchandise packaging and private label goods. Customers are no longer walking the aisles making buying decisions based on physical packaging. The right packaging/private label strategy (think Trader Joe's on steroids) could eventually lead to some amazing gross margins.
I agree - this is a great idea! Before you move to robots, trained employees will be able to pull groceries MUCH faster than customers will, especially if incoming orders indicate where the product is on the shelves.
And this opens all kinds of possibilities for shopping lists: I could have templates for my shopping list ("here's my usual stuff") or groups of items ("all the stuff I need to make this recipe"). I could have a smartphone app and scan the barcode of an empty package, automatically adding that item to my list.
I like the concept. My wife used to work for plumgood food in nashville and the infrastructure build out seemed really expensive... seems like you may be able to avoid that with this if you partner with a local grocery store so you don't have to manage inventory. I would start there and put all my focus on creating a killer shopping experience online-- there are a lot of intangibles of just cruising through a grocery store that have to be rethought when you take it online. Best of luck!
Thanks! I have actually been working with some of the principals from Plum Good (including Eric, the CEO) on the Ernie's concept. I've learned a lot from their experiences.
I think this works well for processed foods and non-perishible items, but I see a real problem with meat and produce.
Shoppers are accustomed to doing their own quality control when shopping for fresh items. In a real grocery store it takes real effort to choose the best meat and produce from what's available, and that decision might just be to not purchase something. Do you intend to provide this as part of your service? If so, what controls will you have in place to guarantee quality?
Granted, not everyone will want to shop at Ernie's. Our plan is to stay focused on our target market: anyone who values the time-savings, convenience and quality above everything else.
(also, anyone who doesn't relish picking veggies that have been handled, sneezed on and who knows what else by the hundreds of other shoppers that came through the supermarket before you)
I love that you're going after a market so ripe for disruption, appreciate your coming to Hacker News for feedback/community, and I wish you the best.
But I think you have it backwards...
The real problem is not the time spent in the supermarket, it's getting there and back. You're addressing the wrong issue.
Many people want their groceries delivered for all kind of reasons:
- They have small children they don't want to take with them.
- Weather.
- Traffic.
- Health issues, elderly, shut-ins, etc.
- They don't have a car.
- They work and can only go the same time as everyone else who works.
On the other hand, if they are going to the trouble of driving all the way to the supermarket, then they might as well go inside:
- to examine and choose their own produce
- to examine and choose their own meat
- to examine and choose specials (which can be done well on-line)
- to handle and compare similar items
- to consult with the butcher/deli manager/etc.
The negative attitude of employees you cite in your video has never been an issue for me. The only real issue has been the check-out lines: there are never enough, the lines are too long, and they are expensive to operate.
If you are seeking large amounts of investment, why don't you just attack the real problem: getting out of the supermarket without waiting in line. All the necessary technology is already available. I just want to fill my cart and go home.
Please don't become another Webvan. Take that money and leverage current technology to eliminiate check-out lines in existing supermarkets forever. That's what people really want.
We don't need more infrastructure. We need better use of technology in existing infrastructure.
Bar codes dragged us that industry into the 20th century. RFID can drag it into the 21st.
I find it really interesting that people who live in different areas will have wildly different thoughts on "driving to the store".
In Memphis, TN (and much of the US), most people drive to and from work. There's just no alternative for commuting, and I think Ernie's has a great opportunity to allow these people to fit a "stop at the grocery store" into their daily commute.
I'll admit that I often need to do a grocery run on the way home, and it almost always takes an extra 30-60 minutes. I'd love the opportunity to do that shopping online before I leave the office, and just stop to pick up my order on the way home. I can imagine this cutting my "grocery stop" time in half.
Full Disclosure: I know the founder, and I had a chance to "beta test" the idea. I drove a couple of miles out of the way and still got home 30 minutes earlier that I would have, had I stopped at my local grocer.
Completely agree. I never had a problem with rude checkout staff and I found that this site stressed that very heavily.
The reason I use Grocery Gateway (our local online grocery store w/ delivery) is because I live in a city and don't need a car. So I get all of my non-produce stuff delivered.
It's $8 for delivery vs a $15 taxi + the time it would take for me to get there and back.
I contend that, outside of a few high-population density areas, grocery delivery will never be a mass-market solution in the United States. It's simply too expensive. While others in the industry continue to beat their heads against that wall, I propose a very simple alternative:
Ernie's reduces the chore of grocery shopping dramatically, while at the same time operating at a fraction of the cost of a traditional grocery.
I'm not trying to compete with a hypothetical grocery store, I'm competing with the supermarket down the street from me (the one so many people complain about).
I like the idea. I'm much rather pick up my stuff than have it delivered. I don't want to wait around at home for the delivery and I don't want to wait in line at the store.
Edit: And as a plus - they could use Amazon like recommendation as customers are "shopping" instead of getting coupons after you finish your shopping - like they do in normal retail stores.
Here in Miami we have these drive through convenience stores called Farm Stores. They just recently rolled out FarmStores.com which lets you order online, then schedule a pickup, and roll through and get your stuff. Very convenient, the $5 service charge I could do without, but still convenient.
The concept of only having a limited set of distribution/pickup points makes a ton of sense, much cheaper than home delivery. You are effectively offloading 2/3 of the delivery cost to the customer themselves.
Things I think this could miss out on:
- Impulse shopping
- higher margin items added
- psychological benefits of grocery experience (ooh that'd be tasty, let me buy that).
fascinating marketplace to be in IMO. I'd pay not to have to wait 10 minutes in the deli counter for some sliced turkey.
"Why not treat yourself? Instead of Own Brand Generic Turkey Slices why not try Bernard Matthews' delicious Wafer-Thin Turkey Slices, with meat from free-range turkeys, for only 20c?" "Having a BBQ? You bought barbeque sauce - what about some premium BBQ sausages and a chef's hat to grill in style?"
Here in Montreal (perhaps also in other large cities) I can order groceries online from any of the major supermarkets and have them delivered to me (mind you, I don't have a car) for a reasonable minimum order value and a mere $2-3 extra. Maybe you are intentionally not targetting these cities, otherwise the idea is not really new at all.
You want to see a grumpy clerk? Go to Switzerland and forget to put the little sticker on your bags of produce. Damn.
Italy, too. I didn't know that's what we were supposed to do when we went into a supermarket to buy a couple of peaches (or something) on vacation last year.
I'll be honest, I'm skeptical. And I'm sure investors are skeptical too after spectacular failures like WebVan and Kozmo.
Sure these sites were different than what you are trying to accomplish (Online --> Deliver to your door vs Online-->Pickup at local store), but they still have similar problems. Groceries operate at razor-thin margins, and being a warehouse of food will only take you so far (just ask WebVan). How do you know if your "Ernies" associate will pick a ripe apple vs a bruised one? How can Ernies be "friendly" if all the interaction is ordering online/pickup at the store?
The biggest question for me is, what is to stop the competition from implementing this if it sees initial success? Order online --> Pick up at store already exists for many types of businesses, if Meijer or Publix or Acme Grocery co sees success, they'll probably add this to their options, at a much easier cost than you will (as they will already have retail stores). What competitive advantage can you use that can fight against this?
The competitive advantage I see is rooted in the background of the individual corporations. The user interface involved is the dealbreaker and I generally have little faith in large, culturally non-software companies getting user experience right.
Groceries operate at razor-thin net margins. Ernie's will operate at double-digit net margins.
If you take a look at the books for any supermarket chain, you will see that the vast majority of gross profits gets eaten up by running those large storefronts. Webvan (and other home delivery attempts) simply replaced the large storefront cost with a large logistics cost.
Ernie's eliminates those costs, all while reducing the chore of shopping for the consumer. It's a win-win.
It works pretty well and we use it a few times a month. The problem we have is that shopping online is like ordering at a closed stack library - browsing the aisles in person lets you see deals for similar items.
You might consider hitting up Angel List if you haven't done so already. If you're trying to raise for that first store - "proof of concept" before you go after more funds - it seems that might be a good avenue to raise those funds. Good luck to you!
Edit: it will probably help a lot that you've already got a portion committed, btw.
It's a location thing. A number of stores have tried this by me, but only one has really pulled it off. People often use it for their big family orders that are well upwards of $100. In general, the place also has better prices than other stores. There are repeat customers, but shopping online certainly doesn't account for the majority of their grocery store runs. That said, the place constantly has a line of cars with huge orders being loaded into their trunks. Never small orders.
Make sure you're in an area that's largely populated by families, and make sure your prices are already good.
I like it. One think to take into consideration is people's relationship with food. It's going to be a hard sell for some people to buy produce or meat sight unseen when selection can have a huge effect on quality.
That being said I think you could build a really interesting interface. Also tremendous overhead savings, no cashiers, baggers, carts, storefront. Basically just a refrigerated warehouse and limited staff.
I'm at work, and so don't really want to watch the video, so I'm going to ask directly:
What does this give me over Ocado (or their many many many competitors - I mean, Asda deliver?!), who I order from, and then they deliver? This sounds like it just adds an extra step of my having to show up, rather than just agreeing that I'll be sat at home in my PJs watching Jeremy Kyle at the right time...
(I'm an Ocado-loving, London native transplanted to SF for the last 6 years)
"What does this give me over Ocado (or their many many many competitors - I mean, Asda deliver?!)"
We have NOTHING like Ocado (or Waitrose, frankly) here in the US. I so wish we did. Grocery delivery is rare in general here too.
The UK is already a very mature, maybe even saturated, market for online shopping so something like Ernies would probably never appeal. It's one of the few examples where UK and rest of Europe is way way ahead of the US.
I could write a book on grocery retail in the US vs UK but a lot of it comes down to the fact that grocery stores don't make the same margins that they do in the UK.
Ocado works because Waitrose has some of the highest margins on their food because they sell premium high-quality brands and don't compete on price. Then there is a delivery fee on top of that. There are enough people in the UK, despite economic issues, that pay for premium groceries at Waitrose and want it delivered by Ocado (perhaps because they don't have a car).
Groceries in the US are way way cheaper, perhaps as much as 50% and the margins are lower. To give you a comparison, the premium grocery chain Whole Foods (which I think we now have a few in London) compares to Sainsburys on price yet the quality is better. A grocery store with price point of Waitrose or Marks & Spencer wouldn't survive in the US because Americans won't spend that kind of money on groceries.
Safeway here in San Francisco will offer home-delivery, but I think it's not something they do in their stores outside of cities, and the quality of the food is awful.
But delivery has never been popular in American because car ownership is more common then in the UK - which is probably why Ernies are choosing not to tackle it.
Anyone reading this and not familiar with Ocado should check it out - you'll be amazed at the prices but the quality and service is exceptional.
We aren't trying to compete with home delivery offerings. We are competing with the traditional supermarket model, which is still the dominant grocery model in the United States. Because population density in the many parts of the U.S. is low, home delivery has enormous challenges to profitability.
Supermarkets remain as the "normal" grocery solution, but leave a lot to be desired in terms of convenience, customer service and quality. We aim to fill that gap.
From the video, it seems like the main advantage is cost. Then again I happily pay the £50 (or whatever it is) for my unlimited Ocado pass, to avoid having to own a car in London, take the time to pick up the groceries, etc.
I think its an interesting approach setting up physical storefronts. Has this been thought about as a "drive-thru" add-on for existing grocery stores managed by the ernie's software? I think the number one use case is the quick trip – I need milk, eggs, bread etc. on my way home for breakfast tomorrow. I think this is really neat and I wish you complete success.
[+] [-] retube|14 years ago|reply
- You need physical stores. These take a lot of money and expertise to set up and run. And to expand/scale in any meaningful way will take a LOT of money. Plus of course you've got the added expense of having to actually do the shopping on behalf of your customers (ie walk round your inventory and fill the basket). Kind of the opposite to the Ikea model. As Ryan Air have conclusively proved, people will put up with ANYTHING if it's cheap(er).
- Your stores are going to have to be as big as a supermarket to really be of use to people.
And on the competition side:
- What's the advantage over just ordering my goods online from a supermarket? I don't even need to go to the store then, they just get delivered to my front door. Or do supermarkets not do this in the US? IN the UK at any rate you can choose very specific delivery times as well.
And on the marketing side:
- 40 minutes in a grocery store? You can easily spend this much time online filling up your basket. Personally I've never felt that online ordering has saved me much time. The USP of online shopping is not time saving, it's "when" saving - I can do it during a quiet time at work for example. But with Ernies I still gotta go pick it up...
- 73 hours per year? Doesn't sound like much to me. And walking round the store is healthier than sitting in front of your PC :)
[+] [-] rsbrown|14 years ago|reply
"You need physical stores": Sort of. We need physical warehouses. The core of the Ernie's business model is that these locations will be much cheaper to operate than the traditional grocery storefront, therefore increasing net margins. They will take expertise to operate; luckily, this expertise is well-established and readily available.
"Your stores are going to have to be as big as a supermarket": Not necessarily. Our SKU count will have to be big enough to be compelling. But Trader Joe's has proven that a very low SKU count can still be compelling if the value proposition is there. Trader Joe's value prop is low prices. Ernie's is convenience. On top of that, we're cramming our SKUs into a warehouse layout. Our real estate footprint will be much, much smaller than a supermarket.
"What's the advantage over just ordering my goods online... ?": The advantage is in the operations model. Home delivery will always be a much more expensive grocery offering. This results in some combination of fees and/or higher prices. Ernie's is not price premium offering. No fees. It's cheaper for us to sell the same can of beans to you than it is for Safeway. Much less than a home delivery offering.
"40 minutes in a grocery store? / 73 hours per year?": We'll just have to agree to disagree on these points. Those folks that hate wandering around the grocery (or have small children, or are physically challenged, or have better things to do with their time) are who we are marketing to. I, for one, look forward to getting 3 days of my life back every year. :)
[+] [-] jneal|14 years ago|reply
You are right that you could spend 40 minutes filling up your online basket, but what if you could save your basket and re-order it the next time you "go shopping." Thus you fill up your basket with the items you already buy every time you go the grocery store, then you never have to fill it up again...Could be a big time saver.
And 73 hours per year to me I think in terms of what else could I be doing with that time? My going rate is $80 per hour so that's $5840 I could be making instead of grocery shopping. And sure it's more fit to walk around the store, but perhaps I'd rather go to the gym and actually do a real work out?
[+] [-] jgoewert|14 years ago|reply
Actually, there is something that I have been saving time with and if Ernie's does this, it would be wonderful.
Amazon started creating the ability to have subscriptions for food items. Basically, stuff that I will go through every month and would have to fight my way through CostCo or Sams to get otherwise. For stuff with comparable prices, I may as well just have it shipped in free under Prime instead.
My grocery list is 90% the same every week/two weeks so if I had a saved template to reorder from, that saves me the half hour of pacing the store to get the same exact stuff for the same price, I'd be all for it.
[+] [-] billybob|14 years ago|reply
Not necessarily. You could make more efficient use of space if you don't have to arrange the store to be customer-friendly.
"I don't even need to go to the store then, they just get delivered to my front door. Or do supermarkets not do this in the US?" Most places, no. Where they do, it's more expensive.
"Personally I've never felt that online ordering has saved me much time."
It certainly could if it were done well. Don't you normally buy a lot of the same things? A good interface would remember that and help you reorder favorite items quickly. Also, groups of items - "all the stuff I need to make recipe X." The store could even upsell by suggesting a recipe and selling you all the items you need to make it, then including a printout of it.
Think how quickly you could shop if you could specify the meals you want to make this week instead of looking for each item individually.
[+] [-] rsbrown|14 years ago|reply
The consumer value proposition is covered in the video linked above. The business value prop boils down to this: double-digit net margins. Seriously.
I can be reached at [email protected]
[+] [-] wccrawford|14 years ago|reply
Excellent interface. I have to be able to browse your selection as easily as I can browse in a store. This means I can find things I didn't intend to find. (That's good for you and me, both.)
Fast service at the curb. There's no point in saving the time inside the store if I just waste it sitting in the parking lot.
Reliable time estimates. (Actually, this dove-tails with the last one, doesn't it?)
Selection. I know you said you have selection, but I've yet to find 2 stores that had the same selection. I'm not terribly set on brands, but it does matter sometimes.
Stock. As in, things had better be in stock. Nothing makes me angrier than when the store is out of something I need. Yes, not even long lines.
Deli/Bakery/etc. When you've just dealt with a shopping trip, you don't feel like cooking that night. Bringing home something delicious and/or hot is a must.
And you should seriously consider delivery, and not just curb-side. I know it's a logistical nightmare, but it eliminates 2 of the things above quite neatly.
I also love the possibilities for the store itself. Because the customer never enters the store, all the standard storefront stuff is eliminated. You can use portable tablet registers to let the customer pay, and standard shopping carts are eliminated. You can use whatever is most efficient, or even invent something to make it better. And you can start off with people plucking things from shelves, but it may become economical to have robots doing that. (I believe Amazon does that, but they're pretty big and centralized.)
In short, do it right and you'll make me (and a lot of other people) really happy.
[+] [-] ghotli|14 years ago|reply
[+] [-] rsbrown|14 years ago|reply
"Excellent interface"
We have built a streamlined interface that is uniquely designed to handle grocery shopping. We believe that there is a fundamental difference in shopping for groceries online and the way we shop for other consumer merchandise (such as clothes or books). Being fast, intuitive and discoverable are the overarching goals.
"you should seriously consider delivery"
At a later date, perhaps. "Logistical nightmare" is absolutely right. When/if we do delivery, I want to treat it as an outsourced add-on priced at/near cost (which will still mean a hefty delivery charge in low population density areas).
"I also love the possibilities for the store itself"
Absolutely. In addition to your suggestions, consider the long-term opportunities related to merchandise packaging and private label goods. Customers are no longer walking the aisles making buying decisions based on physical packaging. The right packaging/private label strategy (think Trader Joe's on steroids) could eventually lead to some amazing gross margins.
[+] [-] billybob|14 years ago|reply
And this opens all kinds of possibilities for shopping lists: I could have templates for my shopping list ("here's my usual stuff") or groups of items ("all the stuff I need to make this recipe"). I could have a smartphone app and scan the barcode of an empty package, automatically adding that item to my list.
[+] [-] oldgregg|14 years ago|reply
[+] [-] rsbrown|14 years ago|reply
[+] [-] yock|14 years ago|reply
Shoppers are accustomed to doing their own quality control when shopping for fresh items. In a real grocery store it takes real effort to choose the best meat and produce from what's available, and that decision might just be to not purchase something. Do you intend to provide this as part of your service? If so, what controls will you have in place to guarantee quality?
[+] [-] rsbrown|14 years ago|reply
(also, anyone who doesn't relish picking veggies that have been handled, sneezed on and who knows what else by the hundreds of other shoppers that came through the supermarket before you)
[+] [-] edw519|14 years ago|reply
But I think you have it backwards...
The real problem is not the time spent in the supermarket, it's getting there and back. You're addressing the wrong issue.
Many people want their groceries delivered for all kind of reasons:
On the other hand, if they are going to the trouble of driving all the way to the supermarket, then they might as well go inside: The negative attitude of employees you cite in your video has never been an issue for me. The only real issue has been the check-out lines: there are never enough, the lines are too long, and they are expensive to operate.If you are seeking large amounts of investment, why don't you just attack the real problem: getting out of the supermarket without waiting in line. All the necessary technology is already available. I just want to fill my cart and go home.
Please don't become another Webvan. Take that money and leverage current technology to eliminiate check-out lines in existing supermarkets forever. That's what people really want.
We don't need more infrastructure. We need better use of technology in existing infrastructure.
Bar codes dragged us that industry into the 20th century. RFID can drag it into the 21st.
[+] [-] bkmontgomery|14 years ago|reply
In Memphis, TN (and much of the US), most people drive to and from work. There's just no alternative for commuting, and I think Ernie's has a great opportunity to allow these people to fit a "stop at the grocery store" into their daily commute.
I'll admit that I often need to do a grocery run on the way home, and it almost always takes an extra 30-60 minutes. I'd love the opportunity to do that shopping online before I leave the office, and just stop to pick up my order on the way home. I can imagine this cutting my "grocery stop" time in half.
Full Disclosure: I know the founder, and I had a chance to "beta test" the idea. I drove a couple of miles out of the way and still got home 30 minutes earlier that I would have, had I stopped at my local grocer.
[+] [-] dmix|14 years ago|reply
The reason I use Grocery Gateway (our local online grocery store w/ delivery) is because I live in a city and don't need a car. So I get all of my non-produce stuff delivered.
It's $8 for delivery vs a $15 taxi + the time it would take for me to get there and back.
[+] [-] rsbrown|14 years ago|reply
I contend that, outside of a few high-population density areas, grocery delivery will never be a mass-market solution in the United States. It's simply too expensive. While others in the industry continue to beat their heads against that wall, I propose a very simple alternative:
Ernie's reduces the chore of grocery shopping dramatically, while at the same time operating at a fraction of the cost of a traditional grocery.
I'm not trying to compete with a hypothetical grocery store, I'm competing with the supermarket down the street from me (the one so many people complain about).
[+] [-] kirpekar|14 years ago|reply
My real problems are:
1. Finding stuff in a store. I hate walking 10 aisles for 20 minutes to find that $2 bowl of noodles.
2. Asking store workers for product locations. Takes time & hassle.
3. Buying unnecessary stuff i.e. falling victim to marketing and product placement.
I do not mind driving to the store AT ALL, as it is usually one stop out of many. Often it is on my way back from work or school.
If you ever come to the Bay Area, I guarantee I will use your service if your prices are within 10% of Safeway or Lucky's.
Good Luck!
[+] [-] tyohn|14 years ago|reply
Edit: And as a plus - they could use Amazon like recommendation as customers are "shopping" instead of getting coupons after you finish your shopping - like they do in normal retail stores.
[+] [-] brianbreslin|14 years ago|reply
The concept of only having a limited set of distribution/pickup points makes a ton of sense, much cheaper than home delivery. You are effectively offloading 2/3 of the delivery cost to the customer themselves.
Things I think this could miss out on: - Impulse shopping - higher margin items added - psychological benefits of grocery experience (ooh that'd be tasty, let me buy that).
fascinating marketplace to be in IMO. I'd pay not to have to wait 10 minutes in the deli counter for some sliced turkey.
[+] [-] camtarn|14 years ago|reply
"Why not treat yourself? Instead of Own Brand Generic Turkey Slices why not try Bernard Matthews' delicious Wafer-Thin Turkey Slices, with meat from free-range turkeys, for only 20c?" "Having a BBQ? You bought barbeque sauce - what about some premium BBQ sausages and a chef's hat to grill in style?"
[+] [-] nihilocrat|14 years ago|reply
You want to see a grumpy clerk? Go to Switzerland and forget to put the little sticker on your bags of produce. Damn.
[+] [-] halostatue|14 years ago|reply
[+] [-] eggbrain|14 years ago|reply
Sure these sites were different than what you are trying to accomplish (Online --> Deliver to your door vs Online-->Pickup at local store), but they still have similar problems. Groceries operate at razor-thin margins, and being a warehouse of food will only take you so far (just ask WebVan). How do you know if your "Ernies" associate will pick a ripe apple vs a bruised one? How can Ernies be "friendly" if all the interaction is ordering online/pickup at the store?
The biggest question for me is, what is to stop the competition from implementing this if it sees initial success? Order online --> Pick up at store already exists for many types of businesses, if Meijer or Publix or Acme Grocery co sees success, they'll probably add this to their options, at a much easier cost than you will (as they will already have retail stores). What competitive advantage can you use that can fight against this?
[+] [-] ghotli|14 years ago|reply
[+] [-] rsbrown|14 years ago|reply
Groceries operate at razor-thin net margins. Ernie's will operate at double-digit net margins.
If you take a look at the books for any supermarket chain, you will see that the vast majority of gross profits gets eaten up by running those large storefronts. Webvan (and other home delivery attempts) simply replaced the large storefront cost with a large logistics cost.
Ernie's eliminates those costs, all while reducing the chore of shopping for the consumer. It's a win-win.
[+] [-] dugmartin|14 years ago|reply
http://www.bigy.com/bigy2go/
It works pretty well and we use it a few times a month. The problem we have is that shopping online is like ordering at a closed stack library - browsing the aisles in person lets you see deals for similar items.
[+] [-] unknown|14 years ago|reply
[deleted]
[+] [-] cliftonmckinney|14 years ago|reply
Edit: it will probably help a lot that you've already got a portion committed, btw.
[+] [-] bentoner|14 years ago|reply
http://www.colesonline.com.au/wcsstore/ConsumerDirectStorefr...
[+] [-] rsbrown|14 years ago|reply
And soon there will be Ernie's in the U.S.A.
[+] [-] colinsidoti|14 years ago|reply
Make sure you're in an area that's largely populated by families, and make sure your prices are already good.
[+] [-] rnernento|14 years ago|reply
That being said I think you could build a really interesting interface. Also tremendous overhead savings, no cashiers, baggers, carts, storefront. Basically just a refrigerated warehouse and limited staff.
Awesome.
[+] [-] peteretep|14 years ago|reply
What does this give me over Ocado (or their many many many competitors - I mean, Asda deliver?!), who I order from, and then they deliver? This sounds like it just adds an extra step of my having to show up, rather than just agreeing that I'll be sat at home in my PJs watching Jeremy Kyle at the right time...
[+] [-] dotBen|14 years ago|reply
"What does this give me over Ocado (or their many many many competitors - I mean, Asda deliver?!)"
We have NOTHING like Ocado (or Waitrose, frankly) here in the US. I so wish we did. Grocery delivery is rare in general here too.
The UK is already a very mature, maybe even saturated, market for online shopping so something like Ernies would probably never appeal. It's one of the few examples where UK and rest of Europe is way way ahead of the US.
I could write a book on grocery retail in the US vs UK but a lot of it comes down to the fact that grocery stores don't make the same margins that they do in the UK.
Ocado works because Waitrose has some of the highest margins on their food because they sell premium high-quality brands and don't compete on price. Then there is a delivery fee on top of that. There are enough people in the UK, despite economic issues, that pay for premium groceries at Waitrose and want it delivered by Ocado (perhaps because they don't have a car).
Groceries in the US are way way cheaper, perhaps as much as 50% and the margins are lower. To give you a comparison, the premium grocery chain Whole Foods (which I think we now have a few in London) compares to Sainsburys on price yet the quality is better. A grocery store with price point of Waitrose or Marks & Spencer wouldn't survive in the US because Americans won't spend that kind of money on groceries.
Safeway here in San Francisco will offer home-delivery, but I think it's not something they do in their stores outside of cities, and the quality of the food is awful.
But delivery has never been popular in American because car ownership is more common then in the UK - which is probably why Ernies are choosing not to tackle it.
Anyone reading this and not familiar with Ocado should check it out - you'll be amazed at the prices but the quality and service is exceptional.
[+] [-] rsbrown|14 years ago|reply
Supermarkets remain as the "normal" grocery solution, but leave a lot to be desired in terms of convenience, customer service and quality. We aim to fill that gap.
[+] [-] cjrp|14 years ago|reply
[+] [-] massarog|14 years ago|reply
[+] [-] jmjerlecki|14 years ago|reply
[+] [-] flurie|14 years ago|reply
http://www.samsclub.com/sams/pagedetails/content.jsp?pageNam...
[+] [-] paraschopra|14 years ago|reply
Good luck to you and I hope it succeeds!