Interesting to see a new spin on this. Webvan was one of the biggest busts of the dot com era (http://en.wikipedia.org/wiki/Webvan) -- interesting that Amazon resurrected it..
More interesting... They bought Kiva Systems for $775 million from Mick Mountz, a former Webvan employee who identified warehouse fulfillment as a prohibitive cost in delivering groceries.
> It's unclear if Amazon has actually started using Kiva, though.
Yeah. They use them a lot. A lot, a lot. It was cheaper to buy the company than pay to outfit every FC. All newish fulfillment centers ( http://www.amazonfulfillmentcareers.com/amazon-fulfillment/l... ) are divided into "kiva" and "non-kiva" areas. I think there is only one FC that is fully "kiva," but it may be as many as 3 now. Details are NDA.
Webvan was the best thing born of the 1st dotcom era, sadly it was unsustainable. Their timing was perfect for me - I was car-less in SF with kids and the local grocery store had recently gone under leaving me with a bus trip in order to grocery shop. Delivery to my 3rd floor walkup was awfully nice in comparison and well worth the approx. 10% markup. They had really nice crates too, I have 3 that I still use for various things.
http://www.kivasystems.com/about-us-the-kiva-approach/manage...
It's unclear if Amazon has actually started using Kiva, though. Does anyone know? That 60 minutes special didn't show them using it.
Edit: Changed from "the prohibitive cost" to "a prohibitive cost."