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https://twitter.com/dkberman/status/875701677504024576 https://twitter.com/dkberman/status/875701677504024576 "Amazon did not just buy Whole Foods grocery stor

• maxerickson 9y ago
  I don't think that is right, Whole Foods stores are already full of...food. They don't have room for hundreds of additional products, never mind tens of thousands.
  • emodendroket 9y ago
    Yeah, and I can't imagine the kind of places Whole Foods is located making any kind of sense as a warehouse.
  • zebrafish 9y ago
    The products Amazon is trying to distribute with this deal are.... food products.
    • maxerickson 9y ago
      I feel like you are ignoring the context I replied to, where the person quoted a tweet saying Amazon would use the stores for everything they do.
    • Spooky23 9y ago
      Amazon could get rid of the big bullshit medicine section that Whole Foods has and replace it with useful products.
      • upvotinglurker 9y ago
        The bullshit medicine must be lucrative, though, or the section wouldn't be so big. (Not saying the medicine isn't bullshit, just that people apparently like to buy it anyway.)
  • ccorda 9y ago
    Place an order by noon for groceries plus anything you want from Amazon. Amazon fills up truck(s) at whatehouse and drops off at local Whole Foods. Stop by on your way home from work and they bring your items to your car. You get free same day delivery. Amazon just greatly saved on last mile delivery costs. That's the value of those nodes without having to store all the inventory.
    • ghaff 9y ago
      Hannafords has a place an order and pick it up model. Anecdotally, based on my local store, hardly anyone uses it. I suspect it's a narrow niche where people are happy to order on their computer but want to save a few $$ on delivery.
      • ccorda 9y ago
        Amazon has it on trial already: https://www.amazon.com/afx/nc/aboutpickup https://www.amazon.com/afx/nc/aboutpickup Not for me either, but not everyone wants or can have groceries and/or packages sitting on their porch all day.
        • ghaff 9y ago
          Fair enough. Being able to swing by a store and pickup a pre picked order at a specific time probably has value for some. So likely does not having to drag kids around a store.
      • deleted 9y ago
        [deleted]
      • SmellTheGlove 9y ago
        Mainers checking in? I haven't used it yet, but I just went to their website. I picked the store that I pass on my way home from work. Next available pickup is tomorrow at noon. They gotta go same day if they want people to use it. That or it's popular at this particular store, who knows.
  • Symbiote 9y ago
    Tesco use their supermarkets in the UK for collection of items ordered from their website, like home electronics. I never used it, but I'm not really in Tesco's target market for non-food stuff. https://www.tesco.com/direct/click-and-collect/ https://www.tesco.com/direct/click-and-collect/
    • RobAley 9y ago
      I've used it a couple of times (for School uniform for my kids, cheaper than Amazon), however Amazon have their pickup lockers closer to where I live, and with no (slow) human interaction (as at Tesco), it's normally a winner for me.
  • dkrich 9y ago
    This was exactly my thought. In fact, why would a retailer like Amazon want to have upper-income distribution facilities? The cost of storage would be exceedingly high. And if that's the winning strategy, isn't Costco already pretty well positioned in that space?
  • rmc 9y ago
    It's all part of their incredible journey!
  • deleted 9y ago
    [deleted]
  • Spooky23 9y ago
    Amazon Fresh cannot keep stuff in stock. Whole Foods can. Even if they have people running around with shopping carts in the store, you'd probably achieve a better result than what Fresh is doing today in many areas.
• ckastner 9y ago
  $13.7B / 431 = $31.79m per store. I have zero experience with real estate prices for retail outlets, but it feels as if that's a bit on the high end?
  • kgwgk 9y ago
    They only own 18 of those stores, anyway.
  • blantonl 9y ago
    * distribution network * store stock * employees * high end real estate Sounds like a great deal for Amazon
    • needlessly 9y ago
      you can't really buy employees. They can choose to quit right after.
      • dx034 9y ago
        And they don't own the real estate so that point isn't valid either. Not sure about trucking but would be surprised if they own their whole distribution network.
        • dceddia 9y ago
          But they do (in some cases anyway) own the liquor licenses.
    • InitialLastName 9y ago
      * High-end food brand to sell from
    • clarkmoody 9y ago
      * Customer goodwill * Company brand
  • dgudkov 9y ago
• adventured 9y ago
  No they didn't. They just bought a higher income grocery business, which they were aggressively seeking to dive deeper into. They'll use the locations for pick-up & delivery points plausibly and they'll bind it to Prime in various ways. They'll probably also leverage Whole Foods into smaller, smart / automated stores, micro whole foods stores in the image they've been experimenting with for self-shopping. It would have cost them billions to build out the grocery distribution points they were planning to do anyway. They'll save a lot on that cost, and meanwhile the Whole Foods business is generating $500m per year in net income consistently, over ten years it'll plausibly nicely chop into that purchase price and or fund Amazon's experiments.
• Eric_WVGG 9y ago
  I'm not saying that renting is worthless, but it's worth noting that Whole Foods rents their property. Amazon is buying a network, not earth and bricks.
• JumpCrisscross 9y ago
  They also just bought a liquor license in like every U.S. state and high-income city.
  • nonameface 9y ago
    There is no Whole Foods in West Virginia. I know you were generalizing but thought I would mention a counter-case.
    • somecontext 9y ago
      My research suggests that 42 states contain at least one Whole Foods. The eight states excluded are (west to east) Alaska, Montana, Wyoming, North Dakota, South Dakota, West Virginia, Delaware, and Vermont. These are exactly the seven states with population less than one million in the last US Census ... and West Virginia. (Note, however, that the District of Columbia -- also with a population under one million -- has four stores.) Although it's a strange thing to measure, approximately 7.5 million people (~2.3% of the US) live in a state without a Whole Foods.
      • nunez 9y ago
        delaware totally has a whole foods; there is one near wilmington iirc
        • somecontext 9y ago
          You're welcome to look at https://www.wholefoodsmarket.com/stores/list https://www.wholefoodsmarket.com/stores/list yourself. The store you're remembering might be at 475 Wilmington West Chester Pike in Glen Mills, PA, which is plenty close to Wilmington (as the street name suggests) but is in fact ~2 miles outside of Delaware.
• raldi 9y ago
  It's like bootstrapping a fleet of Apple Stores all at once.
• openmosix 9y ago
  Is it safe to assume Instacart will soon lose one of its strategic partners?
  • busterarm 9y ago
    Yeah I'm pretty sure they're f*ed.
• steego 9y ago
  Meh. This deal is about expansion, not about tapping into 431 measly location. Amazon knows they can set up satellite warehouses a lot faster and cheaper than they can create a store. Let's be clear. Whole Foods is not a commodity food supplier. They enjoy high margins because they have cultivated quality and consciousness into their products. They did to food what Apple did to computers. They added the right mix of intangibles with a sense of mission and purpose that people can many buy into. Add on top of that, and Whole Foods adds an expertise procuring a catalog of high-end suppliers for both packages and fresh foods and the safe handling of those foods. This deal should significantly improve Amazon's food delivery offerings. As a food snob and target demographic, I can say this will significantly improve my chances of using Amazon's food delivery service. I've used it in the past, but wasn't satisfied because I was disappointed with the quality and selection. It wasn't bad, it just wasn't great. I suspect most people will not be willing to buy the high-end products, but that's not the point. The point is the high-end/high-margin products will be available so shoppers won't have to go out and do supplementary shopping to get the "good stuff". If online grocery shopping is going to become viable, they need to make sure they reduce the need for supplementary shopping as much as possible. Having a leg and data from a real grocery store will help them figure out what they need to do to improve.
  • petra 9y ago
    That surely makes a lot of sense. But in theory at least, Amazon's fulfillment platform is supposed to be the solution for retailing the "long tail", and it had worked very well in regular e-commerce. So why did it fail with food ?
    • steego 9y ago
      I can't emphasize enough how food is a fundamentally different business in so many ways. First, to say the product is evaluated and experienced in a much more visceral way than most other industries is a huge understatement. Our bodies, like most other animals, dedicate so many resources and features to the quality detection and digestion of food and our second largest concentration of nerve cells exists in our gut. Eons before we could comparison shop, we and our evolutionary ancestors were foraging, testing and evaluating what we can eat. How we evaluate this product is based on an innate system that been shaped over countless years. When you eat something bad, that nervous system goes out of its way to tell your brain not to eat that thing again. You may try to ignore it, but the brain has some pretty coercive methods to make sure you never forget what made you sick. For me, it turned me off goat cheese for about 5 years, even though I knew I had come down with a stomach bug. It didn't matter. My brain didn't give a shit. All it knows is I felt like shit after I ate goat cheese, so it's going to tell me to stay away from fucking goat cheese. (Fortunately, I can now enjoy it again.) Needless to say, food borne illness is a huge concern with the industry because a handful of incidents (Think Chipotle) can have a devastating effect. Want to prevent it? You have two options: The first option, you can go the preservation route with additives and refrigeration. This is what we did in the 20th century. We basically created conditions to make it hard for bacteria and pathogens to eat our food before we ate it. Either this meant you kept it cold, or you made it inedible. For example, one reason bleached white bread lasts longer than old fashioned sour dough recipes is because you've effectively stripped all the nutrients out of it. Old fashioned bread is nutrient rich. You can live off it. The bleached bread was so nutrient poor that people started suffering from malnutrition diseases like rickets until some clever person realized you can fortify bread with flower. Needless to say, most preservation systems take away something. It could be nutrients, texture, flavor, or a host of other things. The second option is to source fresh ingredients, handle it well, and eat it as soon as you can. This is what Chipotle tried to do and what virtually no other fast food joint tries to do because it requires organizational and operational disciple. The stakes are high and people have long memories when it comes to making people sick. Even as adults, once you've associated doody with someone or something, that stuff sticks in your head. I'm pretty sure when people started inventing verbal language, one of the first words that was uttered was something equivalent to the word "yucky". Now that we've got that illness and yuckiness are a huge part of this industry, you have to remember that food is also an artistic expression and part of people's sense of identity, way more than most things you might buy on Amazon. We have holidays that celebrate food bounties. We use it to commune with friends and family. Explorers set out expeditions and discovered entire fucking continents because they wanted better access to spices to make their food taste better. Food is trendy, the customers are fickle and easy to scare and they have long memories. As a company, you can't just stumble into that industry and make it work robots and good operations procedures. It takes inside knowledge and expertise that is cultivated by an organization. This is why it was important for Amazon to buy a company that worked hard to try to figure out how to procure and provide fresh, health conscious, and sustainable foods. They're buying Whole Food's reputation and expertise because they know reputation and expertise is everything in the food business.
• erikb 9y ago
  Which is really nice if you want to roll out your own grocery store chain.
• jhatax 9y ago
  This. I have started using Prime Now a lot over the last few months because the prices for non-perishable groceries are cheaper than Target/Safeway consistently. The gap has been fresh food, and to fill this gap, Prime Now partners with local stores (Sprouts in Oakland, for example). The acquisition makes WF an instant partner of Prime Now (unintended pun). The demographic that uses the app and wants groceries now has a reliable and recognized source for said needs. This will only increase the use of Prime Now, thereby making Prime a more entrenched and indispensable service for a certain demographic. Better yet, the benefits will be symbiotic: WF can benefit from Amazon's advanced logistics capabilities. These efficiencies might help the brand shake off its reputation for super high prices. Strategically, this is a slam dunk for Amazon and certain segments of its customers.
• deleted 9y ago
  [deleted]
• clairity 9y ago
  this is a shot across the bow of instacart and even uber and walmart. amazon wants to own all consumer data so it can know what you want to buy before you do. it's a strategy that's hard to bootstrap, but they're already been at it for 20 years. whole foods fills a retail direct distribution hole in their product line that their own automated grocery stores are just not ready to do. this is they type of acquisition that seems a little puzzling at first, but makes sense in the context of their overall strategy (unlike most acquisitions, which just remain puzzling since they're usually ego/prestige plays).
• virtuabhi 9y ago
  In addition to using Whole Foods stores as a locker location, Amazon can also ask Whole Foods employees to deliver packages on their their way home from work. Like Walmart - https://www.washingtonpost.com/news/business/wp/2017/06/01/walmart-is-asking-employees-to-deliver-packages-on-their-way-home-from-work/ https://www.washingtonpost.com/news/business/wp/2017/06/01/w...