Alphabet Gets Into Fresh Grocery Delivery

Well, it was only a matter of time.

The race for fresh grocery control dominance — currently being waged by Instacart, Amazon and a virtual army of smaller startup players — now has an official new competitor and a big one.

Google’s parent, Alphabet.

As of yesterday (Feb. 17), Alphabet is delivering perishables, like eggs, milk and produce, to the good people of San Francisco and Los Angeles as an extension of the Google Express service.

And with its entry into the field, Alphabet now inherits the field’s main problem of finding a way to make money delivering groceries that accounts for the high cost of last-mile service (on a timer) and the historically low margins associated with grocery sales.

Amazon and FreshDirect support their services with warehousing; Google is eschewing that model in favor of delivering direct from retail partners, thus avoiding the risks associated with owning the inventory. Delivery partners in San Francisco include Costco, Whole Foods, WFM and Smart & Final stores. L.A. has Costco and Smart & Final; it also adds upscale grocery Vincente Foods. Alphabet said dropping warehousing expedited the service to make food delivery possible.

Google has also changed its delivery window (two hours instead of four) and upped the minimum order from $15 to $35. Members will pay $99 a year and then $3 for deliveries of perishables (no charge for nonperishables) or $5 for non-members.

Express (without perishables) has also been growing — to most of the Midwest and California.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.