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Why is this implied assumption that Amazon will win, where Walmart seems much better positioned to win groceries ? One possible scenario, for example: conveni

by petra 8y ago

Why is this implied assumption that Amazon will win, where Walmart seems much better positioned to win groceries ? One possible scenario, for example: convenience is key. So people shift from cooking at home(only ~10% love to cook ) to buying fresh, restaurant quality, heat-and-eat meals. Key parameters to compete here are quality, selection and price. Walmart could offer good quality via help of external chefs, if they get critical mass they could offer enough selection, and since they buy much more food than Amazon ingredients will come cheaper for them, supply chain will be cheaper for them, and and the only place Amazon may have an advantage is more efficient food making process, so there some chance Amazon could win where(altougj most like the innovation will come from a startup, which also Walmart can acquire) , but even so ,will it negate all of Walmart's advantages, and won't be copyable in some form ? And remember, even for wealthy people that care less about price, better cost efficiencies could mean better food, better reviews or better paid marketing. So What about other Amazon differentiators: Amazon Ecbo ? Google will offer that. Instead of just delivering stuff, putting them is people's fridges. Is that something that people do? Is that something so hard to copy ? And is that really a meaningful differentiation ?

runwerks 8y ago
i think one of the things you're missing is that whole foods locations tend to be in more upscale, urban locations. and people that live in upscale, urban locations can't stand walmart.
- petra 8y ago
  That's a good point. But Walmart build pickup points at upscale neighbourhoods. They even built an automated store to do so, and it'd 20x80 foot, pretty small: https://newsok.com/article/5551667/walmart-introduces-automated-grocery-pickup-kiosk-at-oklahoma-city-store https://newsok.com/article/5551667/walmart-introduces-automa...
mbesto 8y ago
> positioned to win groceries Retail grocery sales != meal kits. In one instance, you simply procure the product and sell it on, and the other you procure, kit and sell via online. Huge difference. > Key parameters to compete here are quality, selection and price. Walmart could offer good quality via help of external chefs, if they get critical mass they could offer enough selection, Have you ever actually stepped into a Walmart? Walmart does not compete on any of those parameters, except for price. > to buying fresh, restaurant quality, heat-and-eat meals. Except this is not what is happening. Those companies have ridiculously high churn rates, which means the trend is fairly benign to certain sectors of the market (mainly large cities).
- petra 8y ago
  // churn: Most meal kits companies will die because they are inconvenient. Too expensive, too much messing around in the kitchen. But heat-and-eat is easy(just putting something in the oven), somewhat close to takeout easy, and Walmart may take it to really interesting price points. // Quality, selection at Walmart Online ordering greatly increased selection. Will do for Walmart. Walmart order food at the quality and price point fitting customers. Assuming grocery pickup/delivery will attract wealthy urbanists(see my other comment), Walmart will offer also higher quality products
- forapurpose 8y ago
  >> Key parameters to compete here are quality, selection and price. > Walmart does not compete on any of those parameters, except for price. This comment seems to disagree: https://news.ycombinator.com/item?id=17157004 https://news.ycombinator.com/item?id=17157004
niftich 8y ago
Walmart's model is based around footprint, and separately, low prices -- and the two competitive advantages don't really overlap. In US rural areas, they're often the only supermarket around, as "dollar"-style general stores don't sell fresh food, and local grocers have slightly higher prices, smaller stores, less product variety, and don't sell apparel and electronics. Walmart forms a single destination that draws customers from miles away, around which other services can coalesce. Meanwhile, in urban and suburban areas, Walmart draws on demographics who are interested in low prices, while managing to avoid the quality and selection issues afflicting some low-end grocers. Shoppers with more disposable income usually opt for midrange or high-end grocers instead, to avoid some aspects of Walmart (e.g. large average basket sizes resulting in long waits for checkout, crowded parking lots, lack of focus on mood and presentation) because they can afford nicer stores. Rural delivery is harder to execute, because population densities are lower. Therefore it's unlikely that rural America will be where Amazon's grocery ambitions make the most headway. But in urban areas, where Walmart's customer base is largely captive by income, Amazon stands to make more money by competing against mid-to-high-end chains first.
- petra 8y ago
  All the negative points for wealthy consumers regarding Walmart(I.e long lines, mood, etc) will be solved either by grocery pickup, or delivery.
  - niftich 8y ago
    True, but Amazon Prime is a de facto warehouse club (cf. Costco) where you pay $100+/year for the privilege and perks to shop there. Once you're in the Prime ecosystem, your switching costs become higher. Within Amazon's ecosystem, you can get a discount by using their credit card, a discount on shipping, a discount on pre-ordering items on a subscription, and all the personally-targeted aspects of a typical loyalty card. This is their moat vs. Walmart, and consequently, Walmart would have to offer a significantly cheaper (or "better") service to entice switchers -- a high bar for luring discretionary customers.
    - deleted 8y ago
EGreg 8y ago
Because they’re Bat...Amazon!!!
matwood 8y ago
> where Walmart seems much better positioned to win groceries Until WM can fix their terrible produce, I don't see how they can win groceries.

by petra 8y ago

runwerks 8y ago

i think one of the things you're missing is that whole foods locations tend to be in more upscale, urban locations. and people that live in upscale, urban locations can't stand walmart.

petra 8y ago
That's a good point. But Walmart build pickup points at upscale neighbourhoods. They even built an automated store to do so, and it'd 20x80 foot, pretty small: https://newsok.com/article/5551667/walmart-introduces-automated-grocery-pickup-kiosk-at-oklahoma-city-store https://newsok.com/article/5551667/walmart-introduces-automa...

mbesto 8y ago

> positioned to win groceries Retail grocery sales != meal kits. In one instance, you simply procure the product and sell it on, and the other you procure, kit and sell via online. Huge difference. > Key parameters to compete here are quality, selection and price. Walmart could offer good quality via help of external chefs, if they get critical mass they could offer enough selection, Have you ever actually stepped into a Walmart? Walmart does not compete on any of those parameters, except for price. > to buying fresh, restaurant quality, heat-and-eat meals. Except this is not what is happening. Those companies have ridiculously high churn rates, which means the trend is fairly benign to certain sectors of the market (mainly large cities).

petra 8y ago
// churn: Most meal kits companies will die because they are inconvenient. Too expensive, too much messing around in the kitchen. But heat-and-eat is easy(just putting something in the oven), somewhat close to takeout easy, and Walmart may take it to really interesting price points. // Quality, selection at Walmart Online ordering greatly increased selection. Will do for Walmart. Walmart order food at the quality and price point fitting customers. Assuming grocery pickup/delivery will attract wealthy urbanists(see my other comment), Walmart will offer also higher quality products
forapurpose 8y ago
>> Key parameters to compete here are quality, selection and price. > Walmart does not compete on any of those parameters, except for price. This comment seems to disagree: https://news.ycombinator.com/item?id=17157004 https://news.ycombinator.com/item?id=17157004

niftich 8y ago

Walmart's model is based around footprint, and separately, low prices -- and the two competitive advantages don't really overlap. In US rural areas, they're often the only supermarket around, as "dollar"-style general stores don't sell fresh food, and local grocers have slightly higher prices, smaller stores, less product variety, and don't sell apparel and electronics. Walmart forms a single destination that draws customers from miles away, around which other services can coalesce. Meanwhile, in urban and suburban areas, Walmart draws on demographics who are interested in low prices, while managing to avoid the quality and selection issues afflicting some low-end grocers. Shoppers with more disposable income usually opt for midrange or high-end grocers instead, to avoid some aspects of Walmart (e.g. large average basket sizes resulting in long waits for checkout, crowded parking lots, lack of focus on mood and presentation) because they can afford nicer stores. Rural delivery is harder to execute, because population densities are lower. Therefore it's unlikely that rural America will be where Amazon's grocery ambitions make the most headway. But in urban areas, where Walmart's customer base is largely captive by income, Amazon stands to make more money by competing against mid-to-high-end chains first.

petra 8y ago
All the negative points for wealthy consumers regarding Walmart(I.e long lines, mood, etc) will be solved either by grocery pickup, or delivery.
- niftich 8y ago
  True, but Amazon Prime is a de facto warehouse club (cf. Costco) where you pay $100+/year for the privilege and perks to shop there. Once you're in the Prime ecosystem, your switching costs become higher. Within Amazon's ecosystem, you can get a discount by using their credit card, a discount on shipping, a discount on pre-ordering items on a subscription, and all the personally-targeted aspects of a typical loyalty card. This is their moat vs. Walmart, and consequently, Walmart would have to offer a significantly cheaper (or "better") service to entice switchers -- a high bar for luring discretionary customers.
  - deleted 8y ago

EGreg 8y ago

Because they’re Bat...Amazon!!!

matwood 8y ago

> where Walmart seems much better positioned to win groceries Until WM can fix their terrible produce, I don't see how they can win groceries.