Published on: September 10, 2018
Got the following email from an MNB reader:I love your work and wanted to share some research I recently completed for one of our retail clients, in regards to evaluating home delivery providers. I know you have strong opinions about instacart (that I must admit, I agree with), and wanted to provide you some more info to support what you are saying. In no particular order:
• I don’t believe the Instacart model is sustainable, and as you mentioned, they are most likely positioning to be acquired. They’ve raised over $900M in capital, and if you read their employee reviews, most of the store pickers hate their work. It’s hard to make money in that “last mile”, and I don’t know if they can turn a profit.
• We track their pricing, and they are dependent on markup of products to try and make money. In looking at their pricing, we’ve noticed where they will actually sell an item less than the retailer they are serving, to try and drive traffic (i.e. gallon milk may be cheaper through instacart than instore). I understand this, but in effect the retailer now has someone else changing their prices. This supports your thoughts that the retailer needs to own this relationship with their customers.
• It appears that some retailers are using Instacart to “check the box” of home delivery, and not investing themselves in new ways to serve customers, like curb side pick-up. This surprised me, but gives you an indication of those retailers who are short on cash and just trying to get by.
• Walmart balked at Instacart changing their prices, because they knew they would lose their EDLP image. Hence, they continue to test alternative solutions for delivery, but are not close to figuring it out.
• The Kroger CFO made a statement recently that they don’t see store picking orders as ever making sense (a profit). Look at their investment in Ocado as acknowledgement of that and their plan to reduce those order picking costs significantly, and the pieces start falling into place. In my opinion, Kroger is positioned (although 2 years out with Ocado), to potentially crack the nut on the last mile, ahead of Walmart.
I must admit that it is nice when folks agree with me on this one. I get pushback from some circles about my unrelenting criticism of Instacart and the companies that do business with it, but I just think I’m right on this one.
And, on another subject, from another reader:I love reading the blog every day and have never responded to any of your posts. But when reading your write up on Burt Reynolds, you forgot to mention my favorite childhood movie Smokey & The Bandit. My grandfather first let me watch this around the age of 8 which was probably a little too early but after that every time we went to his house we would watch it. I can now quote most of the movie. I have to say Smokey & the Bandit is my favorite Burt movie and was disappointed it did not make your list of top Burt movies on the blog.
It may be that I’m too much of a yankee to really appreciate the charms of Smokey
, but I also have to admit that I’ve seen some clips since Reynolds’ passing, and was surprised how good it was.
Novelist Ace Atkins had a wonderful piece in Garden & Gun
over the weekend entitled “A Letter to Burt Reynolds,” and subtitled, “Why you meant the world to a young kid growing up in the South.”
You can read it here
- and I recommend it - but here’s a taste that I found touching:
“I hope you knew how much your movies, your cool style, have meant to me both as a writer and a Southerner. After a few bourbons, I’m quick to point out that Smokey and the Bandit
wasn’t just a car chase film. It was about us racing into the new South, knocking corrupt cops, racist bikers, and the slow mean old ways the hell out of the way. Each one of those films, those core action movies - Deliverance
, White Lightning
, Smokey and the Bandit
, Sharky’s Machine
- had so much to say about the emerging Deep South. The clash of good vs. evil, man vs. nature, the Bandit vs. Buford T. Justice.”
And Atkins - who I’ve interviewed several times - also reminded me of a line from Smokey
that is a business lesson, that should’ve made “The Big Picture,” and that will make its way into any sequel.
It’s when Snowman (Jerry Reed) says to Bandit (Reynolds), asking about why they are engaging in the extended car chase, “And why are we doing this again?”
And Bandit replies, “Because they say it can’t be done, son.”
Which is a pretty good reason to do many things, but especially to innovate.
And, Atkins writes about the Burt Reynolds attitude and oeuvre:
“We go. We don’t look back. We don’t complain. We drive fast. We take on the Machine. People we love come and go. Times change. People die. We fly into an unknown future.”