6 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.
- bduerst 8y ago
  Do we really need another grocery store chain though? Whole Foods cornered the high-end grocery market (or created it, if you want to debate). Introducing yet another generic grocery chain to the already saturated, age-old red ocean market doesn't seem reasonable unless they're trying to create walk-up warehouses for online grocery delivery.
  - 01100011 8y ago
    I welcome Amazon's attempt to bring changes to the existing grocery store market. Maybe they'll figure something out, or maybe they'll fail. Either way, I'm happy to have more options as a consumer.
    - bduerst 8y ago
      >have more options as a consumer Not if they succeed. The grocery market is only so large, and if Amazon pushes other other grocery chains, consumers now have less choice.
- 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).
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.
- tyingq 8y ago
  I would guess the perceived gap is also popular processed foods that would hurt the Whole Foods brand if they carried it.
  - JadeNB 8y ago
    > I would guess the perceived gap is also popular processed foods that would hurt the Whole Foods brand if they carried it. I used to think this, but Whole Foods sure has a lot more problem with the 'popular' part than with the 'processed' part. If you actually look at the nutritional content of some of their products, it's pretty dire. (Not so much for processed food, but my wife noticed the other day that one of their cake slices, for one slice of cake, had 1100 calories and 100 grams of sugar.)
    - tyingq 8y ago
      Yes, that makes sense. It's less about healthy and more about not having obvious things like Cheetos on the shelves.
- 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.
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.

bduerst 8y ago
Do we really need another grocery store chain though? Whole Foods cornered the high-end grocery market (or created it, if you want to debate). Introducing yet another generic grocery chain to the already saturated, age-old red ocean market doesn't seem reasonable unless they're trying to create walk-up warehouses for online grocery delivery.
- 01100011 8y ago
  I welcome Amazon's attempt to bring changes to the existing grocery store market. Maybe they'll figure something out, or maybe they'll fail. Either way, I'm happy to have more options as a consumer.
  - bduerst 8y ago
    >have more options as a consumer Not if they succeed. The grocery market is only so large, and if Amazon pushes other other grocery chains, consumers now have less choice.
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).

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.

tyingq 8y ago
I would guess the perceived gap is also popular processed foods that would hurt the Whole Foods brand if they carried it.
- JadeNB 8y ago
  > I would guess the perceived gap is also popular processed foods that would hurt the Whole Foods brand if they carried it. I used to think this, but Whole Foods sure has a lot more problem with the 'popular' part than with the 'processed' part. If you actually look at the nutritional content of some of their products, it's pretty dire. (Not so much for processed food, but my wife noticed the other day that one of their cake slices, for one slice of cake, had 1100 calories and 100 grams of sugar.)
  - tyingq 8y ago
    Yes, that makes sense. It's less about healthy and more about not having obvious things like Cheetos on the shelves.
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.

bane 8y ago

Why test when you can A|B test?