8 ms·

Amazon to open grocery chain separate from Whole Foods

jchallis 8y ago
Does your business 1) work in retail and 2) have more than 2% margin? Then Amazon is coming for you.
- joezydeco 8y ago
  @GSElevator: "If Amazon is in your line of business: Sell now. If Amazon is not in your line of business: Sell now; your business sucks" https://twitter.com/gselevator/status/887023115288576000 https://twitter.com/gselevator/status/887023115288576000
- dontbenebby 8y ago
  I'm actually cautiously optomistic for some stores. For example, I still go to Target since I want to see clothes before I buy them. And their store card gives you free 2 day shipping with no BS "membership fee". I could see AMZN taking a huge dive if the economy slows down. Think about it - a lot of people will be looking for things to cut and that Prime membership may be the first to go.
  - bduerst 8y ago
    Eh, it's getting much easier to order online, try it on, and ship returns. After getting frustrated with stores not having the size of the item I wanted in stock, I started ordering online from specialty sites and haven't looked back. The only problem is time though - it can take a couple weeks to do this.
  - ocdtrekkie 8y ago
    I use a lot of in store pickup and free shipping offers from Walmart, Target, and Best Buy. Usually the prices are better too, until someone gets Amazon to price match. But I don't know why anyone would pay for Prime.
- eunoia 8y ago
  This is clever. So I'm curious, how is Amazon able to execute so effectively in so many different spaces? It would seem to me that any company endlessly extending itself into new markets is doomed to lose sight of its core competencies and eventually collapse under it's own weight. And yet Amazon still grows, and keeps executing. How is this possible? Is the 6 page memo the magic sauce of sprawling corporate empire governance? Am I just not understanding some fundamental tenet of business?
  - ip26 8y ago
    Like other sprawling corporations of the past- GE, Sony, Panasonic, IBM, etc- they can sustain losses in a space for years, maybe even decades if they think it will pay off eventually, on the strength of their other businesses. Not needing to make a profit is a powerful position to be in.
  - petra 8y ago
    Our experience of mega-companies over extending themselves and crumbling are from a different period. Maybe. And not all of them crumbled. Walmart did great. But today we have A/B testing, Platform reuse for other business line(Cloud, site, Warehouses, trucks, etc), more predictable supply chains(ML), scary marketing techniques, small flat teams augmented by powerful tools, generous funding from the stock market, etc. Now Amazon has it all. Their competitors ? not so much.
  - nickpsecurity 8y ago
    They appear to have a strong focus on what customers actually want, hire bright people to figure out how to build it, are willing to gamble on some of it even if boss disagrees, make sure they keep whatever they build lean + scalable, use that to be profitable at scale on low margins, and tie stuff together as much as they can for higher satisfaction of customers and cross-selling them. I'm not an Amazon guy or customer. Just guessing from what I read. I am pretty sure that lots of big businesses going cheap on or ignoring workers' advice, investing in expensive or inflexible systems, and pretending to listen to their customers contributes to their loss of market share to both startups with high customer focus + flexibility and pivoting behemoths like Amazon that emulate that.
01100011 8y ago
Smart move. Whole Foods has a limited appeal. It's not just price - sometimes people want to buy Cheetos or pizza rolls that don't taste like cardboard. Slightly related thought: Why not design a store which allows instant fulfillment from a wide selection of goods while taking up less ground level space? I could see an Amazon/Walmart/etc store where you reserve the shelf space for presentation, but the goods are actually stored on higher floors and delivered to the customer upon checkout? Real-estate is a premium in many markets and probably keeps out super-center style stores. If you could build up, without having to extend retail niceties to all floors, you might make the costs work.
- gamegoblin 8y ago
  Yes, I imagine a store in which you just walk around and scan QR codes on your phone and your bagged groceries are waiting for you when you walk out (all paid for on the app, too, so no checkout).
  - bduerst 8y ago
    Until people put things in their bag/cart that they didn't scan the code for, and you're not going to RFID tag an entire grocery store inventory that already has razor thin margins. Supposedly Amazon's machine-vision store is solving this though.
    - what_ever 8y ago
      I don't think the parent comment means people putting things in the bag. They just walk with phone, scan the items they want to buy which get added to bag automatically by robot/someone else and customer just walks to the counter at the end to pick up their bag.
      - bduerst 8y ago
        I see, my bad. Still, why even walk around empty aisles full of food pictures then? It seems like a strange UI for something that could just happen in the app before you even get to the store. Seems like a waste of space too since everything will be itemized and stored in the back on shelves as well. I understand that user behavior doesn't turn on a dime but Amazon customers are already used to ordering online.
manav 8y ago
I think the average Whole Foods has plenty of wasted space and that they could easily start to carry products that the average consumer has to go to a normal grocery/convenience store to buy (liquor, snacks, candy, soda, beauty etc). I don't think it will diminish from the experience. Plenty of higher end grocery stores do the same, even with a smaller footprint.
- anth_anm 8y ago
  Whole Foods already carries all that stuff.
  - arthurcolle 8y ago
    Whole Foods doesn't carry liquor in any place I've ever lived.
    - edaemon 8y ago
      That may be due to local laws. In the places I've lived (MN and OR) no grocery stores are allowed to carry liquor.
    - mikeyouse 8y ago
      The ~4 I've been to in SF all carry some liquor (usually a small end cap with 1-2 options of each variety). Maybe it's a regional thing?
    - deleted 8y ago
      [deleted]
  - mc32 8y ago
    They do, but they don’t carry the mainstream versions of things: GUS soda instead of Coke/Pepsi. Cape Cod snacks instead of Doritoes. The thing I hate is they don’t carry regular Aspirin or Tylenol, Nyquil (your usual and basic over the counter medicines) instead they carry ‘homeopathic’ whatever useless ‘natural’ ‘medicines’ & ‘supplements’
bane 8y ago
Why test when you can A|B test?

Does your business 1) work in retail and 2) have more than 2% margin? Then Amazon is coming for you.

joezydeco 8y ago
@GSElevator: "If Amazon is in your line of business: Sell now. If Amazon is not in your line of business: Sell now; your business sucks" https://twitter.com/gselevator/status/887023115288576000 https://twitter.com/gselevator/status/887023115288576000
dontbenebby 8y ago
I'm actually cautiously optomistic for some stores. For example, I still go to Target since I want to see clothes before I buy them. And their store card gives you free 2 day shipping with no BS "membership fee". I could see AMZN taking a huge dive if the economy slows down. Think about it - a lot of people will be looking for things to cut and that Prime membership may be the first to go.
- bduerst 8y ago
  Eh, it's getting much easier to order online, try it on, and ship returns. After getting frustrated with stores not having the size of the item I wanted in stock, I started ordering online from specialty sites and haven't looked back. The only problem is time though - it can take a couple weeks to do this.
- ocdtrekkie 8y ago
  I use a lot of in store pickup and free shipping offers from Walmart, Target, and Best Buy. Usually the prices are better too, until someone gets Amazon to price match. But I don't know why anyone would pay for Prime.
eunoia 8y ago
This is clever. So I'm curious, how is Amazon able to execute so effectively in so many different spaces? It would seem to me that any company endlessly extending itself into new markets is doomed to lose sight of its core competencies and eventually collapse under it's own weight. And yet Amazon still grows, and keeps executing. How is this possible? Is the 6 page memo the magic sauce of sprawling corporate empire governance? Am I just not understanding some fundamental tenet of business?
- ip26 8y ago
  Like other sprawling corporations of the past- GE, Sony, Panasonic, IBM, etc- they can sustain losses in a space for years, maybe even decades if they think it will pay off eventually, on the strength of their other businesses. Not needing to make a profit is a powerful position to be in.
- petra 8y ago
  Our experience of mega-companies over extending themselves and crumbling are from a different period. Maybe. And not all of them crumbled. Walmart did great. But today we have A/B testing, Platform reuse for other business line(Cloud, site, Warehouses, trucks, etc), more predictable supply chains(ML), scary marketing techniques, small flat teams augmented by powerful tools, generous funding from the stock market, etc. Now Amazon has it all. Their competitors ? not so much.
- nickpsecurity 8y ago
  They appear to have a strong focus on what customers actually want, hire bright people to figure out how to build it, are willing to gamble on some of it even if boss disagrees, make sure they keep whatever they build lean + scalable, use that to be profitable at scale on low margins, and tie stuff together as much as they can for higher satisfaction of customers and cross-selling them. I'm not an Amazon guy or customer. Just guessing from what I read. I am pretty sure that lots of big businesses going cheap on or ignoring workers' advice, investing in expensive or inflexible systems, and pretending to listen to their customers contributes to their loss of market share to both startups with high customer focus + flexibility and pivoting behemoths like Amazon that emulate that.

Smart move. Whole Foods has a limited appeal. It's not just price - sometimes people want to buy Cheetos or pizza rolls that don't taste like cardboard. Slightly related thought: Why not design a store which allows instant fulfillment from a wide selection of goods while taking up less ground level space? I could see an Amazon/Walmart/etc store where you reserve the shelf space for presentation, but the goods are actually stored on higher floors and delivered to the customer upon checkout? Real-estate is a premium in many markets and probably keeps out super-center style stores. If you could build up, without having to extend retail niceties to all floors, you might make the costs work.

gamegoblin 8y ago
Yes, I imagine a store in which you just walk around and scan QR codes on your phone and your bagged groceries are waiting for you when you walk out (all paid for on the app, too, so no checkout).
- bduerst 8y ago
  Until people put things in their bag/cart that they didn't scan the code for, and you're not going to RFID tag an entire grocery store inventory that already has razor thin margins. Supposedly Amazon's machine-vision store is solving this though.
  - what_ever 8y ago
    I don't think the parent comment means people putting things in the bag. They just walk with phone, scan the items they want to buy which get added to bag automatically by robot/someone else and customer just walks to the counter at the end to pick up their bag.
    - bduerst 8y ago
      I see, my bad. Still, why even walk around empty aisles full of food pictures then? It seems like a strange UI for something that could just happen in the app before you even get to the store. Seems like a waste of space too since everything will be itemized and stored in the back on shelves as well. I understand that user behavior doesn't turn on a dime but Amazon customers are already used to ordering online.

manav 8y ago

I think the average Whole Foods has plenty of wasted space and that they could easily start to carry products that the average consumer has to go to a normal grocery/convenience store to buy (liquor, snacks, candy, soda, beauty etc). I don't think it will diminish from the experience. Plenty of higher end grocery stores do the same, even with a smaller footprint.

anth_anm 8y ago
Whole Foods already carries all that stuff.
- arthurcolle 8y ago
  Whole Foods doesn't carry liquor in any place I've ever lived.
  - edaemon 8y ago
    That may be due to local laws. In the places I've lived (MN and OR) no grocery stores are allowed to carry liquor.
  - mikeyouse 8y ago
    The ~4 I've been to in SF all carry some liquor (usually a small end cap with 1-2 options of each variety). Maybe it's a regional thing?
  - deleted 8y ago
    [deleted]
- mc32 8y ago
  They do, but they don’t carry the mainstream versions of things: GUS soda instead of Coke/Pepsi. Cape Cod snacks instead of Doritoes. The thing I hate is they don’t carry regular Aspirin or Tylenol, Nyquil (your usual and basic over the counter medicines) instead they carry ‘homeopathic’ whatever useless ‘natural’ ‘medicines’ & ‘supplements’

bane 8y ago

Why test when you can A|B test?