The Amazon-Ification of Whole Foods
theatlantic.com
theatlantic.com
They can likely cut Whole Foods' margins on many items and, through the magic of the warehouse club nature of Prime, offer further discounts to Prime members, incentivizing the choice of Amazon over their competitors. Not all people will we swayed, but some will.
This will shake up the grocery market in many metros, where margins are tight and incumbents are often saddled with tight margins, concerns about real estate, and preexisting debt. Some will spend more to retain customers with extra features like free at-store pickup or cheap delivery, but they won't be able to outmatch Amazon's warchest. The most vulnerable among their competition will fold, allowing customer bases to re-align.
example, there less than ten Whole Foods stores in Metropolitan Atlanta. There are probably that many competing grocery chains in the same area, with sixty plus of each of the larger ones.
Flash forward to 2018 and my wife is buying things online to the point that we're getting 4-6 items delivered per week. I'd guess that's not exceptional.
With 'free delivery' for under $35, I can see her increasing that to on average one delivery item per day.
Kind of like the milk man used to do.
What concerns me is that the amount of energy that goes into getting all that stuff into my home seems to have substantially increased, and, will continue to increase as more businesses incorporate low cost or free delivery.
So it makes me wonder where this ends. It seems we'll wind up with delivery trucks, perhaps autonomous electric vehicles, combing the suburbs throughout the day.
I keep contemplating the extremes: 149 items acquired in one trip the way my mom used to operate, vs.149 items delivered to my home one at a time over a 2 week period. What are the trade-offs?
One point to note is that a delivery guy might deliver to multiple people in your neighbourhood, so his driving is amortised over those orders, whereas when you drive the shops you're making the whole journey for yourself.
If delivery was organised extremely efficiently, e.g. a single delivery service that delivers everything at the same time as the post, it's no doubt that it would be much more efficient than individuals going to the shops themselves. So we're on a spectrum where the extremes are "much better" and "much worse" than pre-internet, but it's not clear to me where we are on the spectrum; in particular, it would be interesting to know whether the net energy consumption has increased or dropped.
Energy-wise, you present a fallacy that all those deliveries serve just your home.
50 houses getting deliveries every day from the same truck for 2 weeks = 14 trips. Those 50 houses all going to the store once every 2 weeks = 50 trips. Not to mention all the land wasted for building parking around said store.
+frequent restocking means you can use a smaller, more energy efficient refrigerator
+frequent restocking potentially means fresher food
-supply is centralized, if a disaster occurs making the shipping center inaccessible you'll starve sooner
-government/big biz can more finely monitor and control your food supply
I don't think we've seen the end of non-Amazon retail yet. When almost every transaction is conducted through Skinnerian workflows developed by MBAs in Seattle and neural networks running in Virginia data centers, doing all your shopping at Walmart is an act of radical physicality.
Disclaimer: google employee.
It is textbook monopoly management to resist squeezing the customer until you’re dependent on them.
They raised my expectation from online commerce. An example, my wife buys clothing from a european brand. Their website is borderline useless, customer service cannot locate orders. At some point they "paid" us to buy something by not properly marking returned item.
Amazon is just there, it works for things i buy every single time.
What if nothing disrupts their entrenched market position? What if it happens in 5 generations or more? Will you want to tell your grandchildren you were waiting for the problem to resolve itself while they now suffer the consequences?
What if, even worse, the disruption will not be a positive change but further race to the bottom?
It's easy to get into a bubble.
Apple, Google, Microsoft, Coca Cola, Amazon. Top 5 brands of 2017, according to
http://interbrand.com/best-brands/best-global-brands/2017/ra...
(And #8 is Facebook.)
Amazon is less than 3% of US retail. Walmart's retail business is three times the size of Amazon's retail business. And that's before we count the fact that half of Amazon's retail business, isn't Amazon at all.
Amazon is not going to actually dominate all of retail. Amazon is not going to become a retail monopoly. Amazon is not going to build a retail business dramatically larger than Walmart's retail business. The shrieks to the contrary are strictly emotionalism rather than fact-based, just as they were 12 or 15 years ago when Walmart was going to destroy everything in retail and monopolize everything. It's just as silly and absurd to pretend Amazon is going to do the same thing. What Amazon has is an early lead in online retail, because they were an aggressive first mover. Only ~10-12% of US retail has moved online. As that percentage dramatically increases in the next 20 years, Amazon's total share of online commerce will fall accordingly. They're not going to be doing $3 trillion in annual sales in 15 years. It'll be extremely impressive if they can manage to one day catch up to Walmart's retail size.
> Neither media or public sentiment towards Amazon is great right now
Public sentiment towards Amazon is extraordinarily high. They typically have the highest, or one of the highest rated brands and consumer experiences. Their customer service is routinely voted as among the best of any company.
What opinion pieces in the NY Times say about Amazon, are not at all representative of how the majority of people feel about Amazon. That's a classic echo chamber premise.
What does that mean? Most of Walmart's business isn't Walmart either, it's their suppliers' business, and Walmart gets a cut. With FBA and drop-shippers, Amazon gets a cut.
Amazon has just recently started a push into brick-and-mortar-stores, and less recently got into local delivery.
Actually, they will hit that in 9 years if they can sustain their current growth rate. It'll take 15 years at half their current growth rate.
and Whole Foods, aka "Whole Paycheck"?
And I'd thought it was downright fawning.
If you were a supplier for Walmart, you _had_ to adopt their business practices in order to stay competitive in the market. They would demand that so you could constantly lower prices.
Amazon is sort of the same in that if they enter a vertical shopping market, if you don't provide the same level of service, you're kind of sunk. And to get to that level of service, the insidious thing is that you either let them take care of logistics and pay them a cut, or you adopt their business practices which have been honed for years.
I don't think Amazon-Ification is necessarily a bad thing. Amazon runs a tight ship and companies would do well to learn.
Absolutely excellent coffee roasted by small bean producers that built small empires can be had at the same or sometimes cheaper prices than Whole Foods coffee.
It has to do with volume. The reason why small batch producers that know what they are doing are so much better is because they are small batch. It is impossible to source enough identical beans to get the identical result, which is why larger operations generate at best very decent but not anywhere close to excellent roasts. They know that they are inferior to small batch producers so they price themselves accordingly. WF is a large producer that prices itself at the level of small batch where its roasts are sharing the category with Dunkin and Trader Joes.
Coffee is like wine. If you need to produce a lot, you may get a boat loads of Merlot and blend it together producing a quite drinkable wine but you will lose to a bottle of St Emillion as yours would be too washed out.
...
Well then
https://steveblank.com/2009/12/21/the-elves-leave-middle-ear...
Point being that Amazon’s impact on the grocery business will likely be far short of transformational.
Besides, somebody should eat the less pretty produce rather than having it go to waste.
Add in all the people with no car, disabilities, multiple jobs, odd working hours, etc. etc.
The market doesn't just go with your opinion, man.
Or accept that, yes, obligatory tipping is part of the culture, and while you may not like it (I sure don't) it is incumbent upon us to do right by the people whose services we are buying.
You might not like tipping. (Again: I don't.) The person you're rationalizing the stiffing of probably doesn't like having to work for tips. Capitalism kinda sucks and the person-to-person patching is something that more fortunate folks just plain get to do. Sorry.
You aren't saving the world by tipping--but you're not making it a worse place, and that's not nothing. Similarly, by not using a service that does its employees dirty without making it right, you are pressuring them--if, admittedly, mildly--towards decent behavior. That assumes that you make it very clear why you're doing it, and you totally should, because communication is part of ethical consumerism. (For similar reasons, when Amazon, Uber, etc. recruiters reach out to me, I underline the way they treat their workforce as a major reason as to my disinterest. It's a data point, and only one, but it's what I can do.)
If you were not informed, then there is no moral weight for not tipping either.
In a situation with 3 parties, there can be any number of immoral people from 0 to about 9 billion, so I don't know why you immediately assume that because the commenter is immoral that doesn't mean the company isn't also behaving immorally.
If the company wants to incentive good quality of service, they can do so explicitly with direct ratings instead of some unclear way of tips.
It’s immoral to shop somewhere that doesn’t pay proper wages. Employees should not be dependent on your charity because a company decides to save on its tax and wage bill.
Don’t reward companies that do this. Don’t promote a race to the bottom.
Amazon leans on a custom that makes you feel guilty for not paying more than they quoted you.
It also hides some of the price until the end, which is an effective dark pattern.
This is about moving these techniques further down the chain. A robot picker arm with a few cameras attached that can tell whether something is rotten is well within our grasp. (Awful pun intended!)
- You pay them $150 a year. - On every order, they add a 10% service fee that helps them keep the service running. This is optional, but you have to remove it every time. - The delivery guy expects his tip.
I am wondering if this is cost-effective this way or not.
The next blow will be to BlueApron/Plated/HelloFresh/etc of the world when WF starts doing meal kits in 2 hours.
Prime Now is really a fantastic service, but it seems like not many people really know about it; Amazon seems to never promote it on their site.
If Amazon buys IKEA, my life will be complete.
https://www.fastcodesign.com/3035734/ikea-is-a-nonprofit-and...
I question whether the author here has ever cooked a meal, much less shopped for ingredients. There's no way this style of interaction can produce the desired result here.
The next time, the user has learnt the flow and starts walking down the taxonomy path for pork by asking for "pork"- or so the user thinks! Alexa just immediately dispatches the same cut the user bought three weeks ago. User never trusts Alexa again.
Obviously Alexa wouldn't just order it right away. It could easily say:
> Alexa: "Would like like to order the same x cut from last time?"
[Yes/No]
> Alexa: "Okay great, the total will be x and the delivery estimate is 1hr, shall I submit this order?"
[Yes/No]
> Alexa: "The order has been submitted, I'll notify you when it's marked as out for delivery"
No, I think I want the one from 3 times ago? Or was it 4?
It'd be great for chicken where I usually get the same thing (~5lbs chicken thighs). For beef though it'd be an absolute nightmare. I vary between flank, eye of round, ribeye, rib roast (which granted is basically a really big ribeye) and chuck in different amounts depending on what I feel like cooking.
I also know myself well enough to know I'm going to have a forgetful moment in the kitchen, order "beef" when I'm focusing on something else, and accidentally end up with 5 lbs of flank when I wanted 1 lb of ribeye.
I'm ok with other family members adding things to a wishlist (called "shopping list" in the Alexa system), although I often have to ask for clarification -- when you said "white chocolate", did you know we already have some? oh, you want another type? which one specifically?
Should I be concerned?
Alexa will also be able to know what you like from what stays and what goes out to recycling. So that tin of prunes in the cupboard won't become a dozen tins for programming error reasons.
It will be a bit like living with someone that stays at home all day and has time to go out and do the shopping, you might do all the cooking as part of the relationship with a fair expectation that everything needed for agreed meal plans is purchased.
Alexa could also know how to optimise inventory, so if it makes sense to buy a 25 Kg bag of brown rice due to so much of it being eaten by such a large family with such a large house that have been customers at that address for such a long time, then so be it.
If the home cupboards and fridge are a 'cache' in this food network then the AI would also know of favourites and have things on hand. So there may be a variable selection of ice creams that could be on hand if the main course needed a dessert without one being specially requested. Favourite main meals could also be 'cached', this could be learned to suit the lifestyle, so if you do have a dozen people needing feeding at ad-hoc dinner parties or if you actually never have friends visit, the AI should get it.
I've got news for you... http://www.moley.com/
The metro has some positive attributes: high proportion and large number of military families who are mostly concentrated in the suburbs. But it also has many complicating factors:
- A difficult metro for logistics. It's essentially a routing cul-de-sac: not enough local demand to serve as a large distribution node, and it's ~100 miles from the Richmond metro that's typically used for this instead. Getting product in by rail is easier, but difficult to do just-in-time, and most rail freight traffic flows the other way: out.
- Low growth. Incomes in the metro grew slower than the US average [1]. Employment growth has been well below US average [2]. The region isn't quite stagnant, but recovery after the recession has been markedly slower than Northern Virginia, Raleigh-Durham, or the region's arch-rival Richmond. Most population growth that is occurring [3] in Virginia Beach's vicinity is in suburban areas beyond the single Whole Foods' delivery range [4].
- Grocery saturation. In the past year, German-style chains Aldi and Lidl have expanded, Publix has been rumored to be eyeing the area, and Wegmans has been confirmed to be coming [5]. This is in addition to local incumbents owned by Supervalu, Kroger, and Ahold Delhaize. Local press and commentators have been noting that the area seems to now be overprovisioned with grocery stores [6].
Meanwhile, Cincinnati is close to major trucking corridors and is adjacent to Amazon's old freight hub in Ohio and its new one at Cincinnati's Kentucky airport. Dallas and Austin are both major markets with high levels of growth.
[1] https://www.bea.gov/regional/bearfacts/pdf.cfm?fips=47260&ar... [2] https://www.bls.gov/regions/mid-atlantic/news-release/areaem... [3] https://pilotonline.com/news/local/article_8e17f21e-2180-5c1... [4] https://pilotonline.com/business/consumer/article_db7fe221-4... [5] https://pilotonline.com/business/consumer/article_610b32b7-6... [6] https://pilotonline.com/business/consumer/article_8b636301-f...
Wegmans absolutely crushes it.
Also there is a wegmans musical: http://www.telegram.com/article/20120502/TOWNNEWS/120509938/...