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I'm confused. Amazon is known to work backward from an imagined future press release, and then do the actions necessary to make that press release. How does A

I'm confused. Amazon is known to work backward from an imagined future press release, and then do the actions necessary to make that press release. How does Amazon see the future in this case? -Amazon already has PrimeNow and Amazon Fresh, which offer a great grocery delivery service. For those who have tried these services, it's easy to see how addicting they are vs going to a physical store. -I can't see Amazon using existing retail stores as distribution centers. I would think you really only need one grocery distribution center for each city in America, and PrimeNow (and AmazonFresh) already has that! Or, has Amazon determined that picking/packing from a retail store is actually efficient? Retail as a DC seems tough to automate, items are in the wrong spot, suspiciously missing, etc. I don't get it. -I would have guessed that online grocery from highly automated distribution centers is where the majority of the market would be within ~20 years. Does Amazon, the king of online, not think that!? -Or does Amazon just believe that they can run Whole Foods better than it is currently run? -Do they just want the purchasing, existing relationships, etc to also sell their customers through other channels?

tuna-piano 9y ago
One thought. People still like food and food things and being social, and the "farmers market" feeling. Even in a future which makes online grocery great for mundane shopping, people still need stuff to do. Whole Foods already has bars, cafes, and restaurants. Maybe Whole Foods locations turn into places where people can hang out, try new things, and buy online grocery delivery (or pickup delivery as well)? Who should be trembling in their sleep even more so with this news: -Blue Apron, HelloFresh, Plated, etc -Drizzly, alcohol delivery, etc (I think absolutely doomed) -WalMart? (Maybe completely different customer sets) -Target, Kroger, other grocery? -Instacart (I think absolutely doomed) Whole Foods is a large cafe/fast casual business. I assume competitors in that space aren't scared at all yet... but I would not necessarily sleep well if I were Starbucks or Chipotle. Amazon seems to play to win, and they usually win. Do they want to play is my main question.
- tuna-piano 9y ago
  Or maybe Amazon sees its new checkout technology (that knows which items you buy automatically) as so special that it's better to roll it out at stores it owns than sell to existing retailers?
- marrone12 9y ago
  Yeah, I wonder how this is going to affect Blue Apron's upcoming IPO. My guess is for the worse.
  - magic_beans 9y ago
    I really don't undertand how companies like Blue Apron and Plated ever expected to be in business very long. Do they get many repeat customers? Theoretically a subscriber would actually learn to cook over time and then Blue Apron would lose that customer... I just don't understand the long term goal.
    - deegles 9y ago
      Churn through customers and VC capital until aquihire?
      - sotojuan 9y ago
        The SV way.
        omarchowdhury 9y ago
        Tried and... true?
    - NuSkooler 9y ago
      I know many people that know how to cook (well) that use Blue Apron. What they don't like to do is a) go to the store(s) all the time for fresh ingredients, and b) they like trying new things.
      - throwaway9980 9y ago
        My wife is one of those people. Loves to cook, does it at a very high level, and hates the grocery store. I was super skeptical about food delivery, but I've become a believer. We get more meals at home, with less stress and time wasted, for a small premium above shopping at the grocery store. It's a very immature market today, in another 10 years I think it will be the typical approach for most home cooks that aren't on a tight budget.
- arzt 9y ago
  Whole Foods is an instacart equity owner. I would be curious how this is being handled given the new conflict.
  - etjossem 9y ago
    Probably factored into the final price, heavily discounted given Amazon's own plans for last-mile.
ajmurmann 9y ago
I think this is to bolster fresh and prime now. As far as I know Fresh is currently limited to very few areas. This might allow them to extend that. Prime Now in my areas has a very limited grocery selection from Amazon itself, but also delivers from a local chain that I see as a Whole Foods copy cat. This will allow them to drastically extend the groceries they make available themselves and get way more control over what's available.
cercatrova 9y ago
Reposting my other comment: https://www.youtube.com/watch?v=cA2-iMz479o https://www.youtube.com/watch?v=cA2-iMz479o I watched this video a while ago about what Amazon Go is a precursor for. In summary, if AWS is renting out server infrastructure for people, then you can imagine that Amazon can make the infrastructure to lease out Amazon Go to other stores. They first integrate it with Whole Foods, then as customers expect no more checkout areas, they will only go to Whole Foods because it's faster and maybe cheaper. Then because customers want it everywhere, Amazon could force other stores like Walmart and Target to integrate Amazon Go infrastructure to their stores, without Amazon directly competing with these stores, and make a ton of money leasing it out without spending money on building whole new stores. Of course, the acquisition could also be like nodes for warehousing and delivery, but both avenues are not mutually exclusive.
chadgeidel 9y ago
Amazon Fresh isn't in all markets, and - as other commenters have noted - Whole Foods is a convenient "last-mile distribution center" for food. That, along with the automatic check-out stores that Amazon has been demoing dovetail pretty nicely with their goals.
_asummers 9y ago
Amazon has been piloting its Uber Eats competitor (at least in Chicago) as well. I think they call it Amazon Restaurants. This indicates willingness to use small businesses as distribution centers in limited capacity.
deleted 9y ago
[deleted]
danblick 9y ago
Maybe it's not about grocery per se but rather about meal delivery?
timfrietas 9y ago
AmazonFresh has never been about delivering groceries--it has been about learning last mile logistics in cities. With this move they can a) accelerate that and b) kill Instacart. The press release they are working backwards from is: "Amazon today announced today they will deliver their own packages in most major cities in America, reducing their reliance on Fedex, UPS and USPS by up to 70%"
crucifiction 9y ago
This enables them to very quickly scale out AmazonFresh, which to date is only in about a dozen areas, to every single area that WholeFoods is in. If you have not used AmazonFresh its pretty clearly a competitor for the same income level people as a Whole Foods customer and already offers a ton of organic/fair trade/etc stuff at Whole Foods level prices. They can also leverage the WholeFoods brand for items, bringing additional customer trust to the quality. Further, this makes PrimeNow delivery cheaper for them. Again, if you have used AmazonFresh you know that you can add PrimeNow-style Amazon stuff to your purchase for the delivery slot. This brings that capability to every WholeFoods location and expands the reach of people buying PrimeNow items (e.g. people will add things to their grocery delivery at a lower threshold than they will pay $5 and reorder on PrimeNow the same thing).
0x4f3759df 9y ago
I think the story is partially the decline of retail in general, malls are in big trouble, as people realize they get little joy from driving 30 mins to get a pretzel and a new pair of shoes. Some people are using the term food-ification of everything, coffeeshops popping up everywhere (target, etc), and the last man standing is the grocery store which is generally a pleasant experience and you might bump into your neighbors there (unlike the empty suburban sidewalks of our car infrastructure) so I think the acquisition makes since in an urbanism / decline of retail context as well as the other contexts presented

tuna-piano 9y ago

One thought. People still like food and food things and being social, and the "farmers market" feeling. Even in a future which makes online grocery great for mundane shopping, people still need stuff to do. Whole Foods already has bars, cafes, and restaurants. Maybe Whole Foods locations turn into places where people can hang out, try new things, and buy online grocery delivery (or pickup delivery as well)? Who should be trembling in their sleep even more so with this news: -Blue Apron, HelloFresh, Plated, etc -Drizzly, alcohol delivery, etc (I think absolutely doomed) -WalMart? (Maybe completely different customer sets) -Target, Kroger, other grocery? -Instacart (I think absolutely doomed) Whole Foods is a large cafe/fast casual business. I assume competitors in that space aren't scared at all yet... but I would not necessarily sleep well if I were Starbucks or Chipotle. Amazon seems to play to win, and they usually win. Do they want to play is my main question.

tuna-piano 9y ago
Or maybe Amazon sees its new checkout technology (that knows which items you buy automatically) as so special that it's better to roll it out at stores it owns than sell to existing retailers?
marrone12 9y ago
Yeah, I wonder how this is going to affect Blue Apron's upcoming IPO. My guess is for the worse.
- magic_beans 9y ago
  I really don't undertand how companies like Blue Apron and Plated ever expected to be in business very long. Do they get many repeat customers? Theoretically a subscriber would actually learn to cook over time and then Blue Apron would lose that customer... I just don't understand the long term goal.
  - deegles 9y ago
    Churn through customers and VC capital until aquihire?
    - sotojuan 9y ago
      The SV way.
      - omarchowdhury 9y ago
        Tried and... true?
  - NuSkooler 9y ago
    I know many people that know how to cook (well) that use Blue Apron. What they don't like to do is a) go to the store(s) all the time for fresh ingredients, and b) they like trying new things.
    - throwaway9980 9y ago
      My wife is one of those people. Loves to cook, does it at a very high level, and hates the grocery store. I was super skeptical about food delivery, but I've become a believer. We get more meals at home, with less stress and time wasted, for a small premium above shopping at the grocery store. It's a very immature market today, in another 10 years I think it will be the typical approach for most home cooks that aren't on a tight budget.
arzt 9y ago
Whole Foods is an instacart equity owner. I would be curious how this is being handled given the new conflict.
- etjossem 9y ago
  Probably factored into the final price, heavily discounted given Amazon's own plans for last-mile.

ajmurmann 9y ago

I think this is to bolster fresh and prime now. As far as I know Fresh is currently limited to very few areas. This might allow them to extend that. Prime Now in my areas has a very limited grocery selection from Amazon itself, but also delivers from a local chain that I see as a Whole Foods copy cat. This will allow them to drastically extend the groceries they make available themselves and get way more control over what's available.

cercatrova 9y ago

Reposting my other comment: https://www.youtube.com/watch?v=cA2-iMz479o https://www.youtube.com/watch?v=cA2-iMz479o I watched this video a while ago about what Amazon Go is a precursor for. In summary, if AWS is renting out server infrastructure for people, then you can imagine that Amazon can make the infrastructure to lease out Amazon Go to other stores. They first integrate it with Whole Foods, then as customers expect no more checkout areas, they will only go to Whole Foods because it's faster and maybe cheaper. Then because customers want it everywhere, Amazon could force other stores like Walmart and Target to integrate Amazon Go infrastructure to their stores, without Amazon directly competing with these stores, and make a ton of money leasing it out without spending money on building whole new stores. Of course, the acquisition could also be like nodes for warehousing and delivery, but both avenues are not mutually exclusive.

chadgeidel 9y ago

Amazon Fresh isn't in all markets, and - as other commenters have noted - Whole Foods is a convenient "last-mile distribution center" for food. That, along with the automatic check-out stores that Amazon has been demoing dovetail pretty nicely with their goals.

_asummers 9y ago

Amazon has been piloting its Uber Eats competitor (at least in Chicago) as well. I think they call it Amazon Restaurants. This indicates willingness to use small businesses as distribution centers in limited capacity.

deleted 9y ago

[deleted]

danblick 9y ago

Maybe it's not about grocery per se but rather about meal delivery?

timfrietas 9y ago

AmazonFresh has never been about delivering groceries--it has been about learning last mile logistics in cities. With this move they can a) accelerate that and b) kill Instacart. The press release they are working backwards from is: "Amazon today announced today they will deliver their own packages in most major cities in America, reducing their reliance on Fedex, UPS and USPS by up to 70%"

crucifiction 9y ago

This enables them to very quickly scale out AmazonFresh, which to date is only in about a dozen areas, to every single area that WholeFoods is in. If you have not used AmazonFresh its pretty clearly a competitor for the same income level people as a Whole Foods customer and already offers a ton of organic/fair trade/etc stuff at Whole Foods level prices. They can also leverage the WholeFoods brand for items, bringing additional customer trust to the quality. Further, this makes PrimeNow delivery cheaper for them. Again, if you have used AmazonFresh you know that you can add PrimeNow-style Amazon stuff to your purchase for the delivery slot. This brings that capability to every WholeFoods location and expands the reach of people buying PrimeNow items (e.g. people will add things to their grocery delivery at a lower threshold than they will pay $5 and reorder on PrimeNow the same thing).

0x4f3759df 9y ago

I think the story is partially the decline of retail in general, malls are in big trouble, as people realize they get little joy from driving 30 mins to get a pretzel and a new pair of shoes. Some people are using the term food-ification of everything, coffeeshops popping up everywhere (target, etc), and the last man standing is the grocery store which is generally a pleasant experience and you might bump into your neighbors there (unlike the empty suburban sidewalks of our car infrastructure) so I think the acquisition makes since in an urbanism / decline of retail context as well as the other contexts presented