by Kevin Coupe
Bloomberg reports that research firm CB Insights estimates that "funding to grocery delivery startups has passed $1 billion for the second year in a row."
That doesn't include what Amazon is doing ... and, the story notes, it is important to understand that at the moment, "Amazon controls less than 1 percent of a fragmented U.S. grocery business."
Here's the reality, as reported by Bloomberg:
"American consumers are buying groceries online, but haven't changed their food-buying habits as quickly as they have for, say, buying shoes or electronics. But if the U.K. market is any indication -- government statistics show 5 percent of grocery shopping is done online there -- then the shift is coming.
"Amazon has made it clear it intends to go after grocery the same way it took on books and electronics. Its Amazon Fresh grocery service, which promises grocery delivery within 24 hours, has recently expanded to new new locations, including Boston and London. But the slow roll out of Amazon Fresh has already taken nearly a decade, in contrast to other Amazon programs such as Amazon Prime Now, the same-day delivery service that went practically nationwide after a year or so."
This is all interesting, but I would follow up on this story by suggesting three things.
First, there will be plenty of failures among those startup companies with so much funding. Failures of specific companies won't mean a failure of the concept ... just that this is a complicated business that takes time to get right.
Which leads me to my second point. I don't think anyone familiar with the grocery business is surprised that it has taken Amazon more time to figure out the food business. And anyone familiar with Amazon thinks that they'll keep working it from different angles until it gets it right.
Finally, I've always believed that if online can generate five percent of the US grocery business, that's a pretty good number. There a lot of smart folks who think that it get can get to three times that. But here's the deal - I think Amazon would be thrilled if it could 2.5 percent of the US grocery business. That's a pretty big number.
We're still in early days when it comes to online grocery sales. What happens next will be an Eye-Opener.
Bloomberg reports that research firm CB Insights estimates that "funding to grocery delivery startups has passed $1 billion for the second year in a row."
That doesn't include what Amazon is doing ... and, the story notes, it is important to understand that at the moment, "Amazon controls less than 1 percent of a fragmented U.S. grocery business."
Here's the reality, as reported by Bloomberg:
"American consumers are buying groceries online, but haven't changed their food-buying habits as quickly as they have for, say, buying shoes or electronics. But if the U.K. market is any indication -- government statistics show 5 percent of grocery shopping is done online there -- then the shift is coming.
"Amazon has made it clear it intends to go after grocery the same way it took on books and electronics. Its Amazon Fresh grocery service, which promises grocery delivery within 24 hours, has recently expanded to new new locations, including Boston and London. But the slow roll out of Amazon Fresh has already taken nearly a decade, in contrast to other Amazon programs such as Amazon Prime Now, the same-day delivery service that went practically nationwide after a year or so."
This is all interesting, but I would follow up on this story by suggesting three things.
First, there will be plenty of failures among those startup companies with so much funding. Failures of specific companies won't mean a failure of the concept ... just that this is a complicated business that takes time to get right.
Which leads me to my second point. I don't think anyone familiar with the grocery business is surprised that it has taken Amazon more time to figure out the food business. And anyone familiar with Amazon thinks that they'll keep working it from different angles until it gets it right.
Finally, I've always believed that if online can generate five percent of the US grocery business, that's a pretty good number. There a lot of smart folks who think that it get can get to three times that. But here's the deal - I think Amazon would be thrilled if it could 2.5 percent of the US grocery business. That's a pretty big number.
We're still in early days when it comes to online grocery sales. What happens next will be an Eye-Opener.
- KC's View:
