Amazon's trial online grocery service
According to a recent post on betanews, Amazon is trialing a new online grocery service in select markets. Amazon is hoping to avoid the traps that befell dot com companies such as WebVan and HomeGrocer.com, whose costs ran past any revenue they managed to generate, by leveraging their existing warehouses and delivery infrastructure. It makes some sense, as Amazon has economics of scale that few other online retailers can match.
The United States, however, has unique challenges in the online grocery space due to its vastly more flexible store opening hours. Wal-Mart's all across the country are not only cheap, but are open 24 hours a day, 7 days a week. Granted, there is the convenience aspect for online grocers, particularly for computer geeks who work long hours and don't want to waste time hunting around the aisles of their local grocer. Even so, the market for such service is likely smaller...
...at least when compared to continental Europe. Oddly enough, Europe is fertile ground for online grocers, as most countries have state-mandated store hours that grocers are legally obligated to honor. I regularly used Le Shop (http://www.leshop.ch) when I lived in Lausanne, Switzerland, because stores closed at 6pm...SHARP. They practically sent employees with cattle prods and firecrackers to drive customers out at 6pm, and when they started giving the time warning, you went to the check-out aisle, as it wasn't unheard of to find yourself having to leave your trolley full of Gruyere and Parma Ham because no one was available to take your money.
Under such conditions, online grocers become indispensible, particularly for families where both parents work. Perhaps Amazon should consider moving into the European market sooner than later. I bet they'd find it a lot more stable a bet than the US market due to the oddly strict nature of work hours there.
Every law, however strange, creates economic opportunities to which companies can respond.