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Amazon’s Battle to Break into the Grocery Market

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Re: Amazon’s Battle to Break into the Grocery Market

#11

Post by justaman »

lotso wrote: post #8
samfisher83 wrote: post #7

Grocery net profits are 1.7%. http://www.fmi.org/research-resources/supermarket-facts Amazon barely makes money on retail operations. What is their rationalization in getting into this market?

From the article >“Amazon wants to be the first thing any consumer thinks of when they need to buy anything,” said Jim Hertel, a senior vice president at marketing technology company Inmar Inc. “Food is the largest retail category. They can’t do what they want to do without grocery and they’re definitely not going to give up.” I'd also imagine Amazon thinks they can do much better than a 1.7% margin by leveraging all…

2030: Government breaks up Amazon into smaller companies.

Re: Amazon’s Battle to Break into the Grocery Market

#12

Post by odonnellryan »

So, my problem with this: I can't usually get things delivered in the same day I want them, and sometimes even the next day. There's no slot available and so on.

I don't really think out what I need days in advance. I'm like, "oh, I'm out of... whatever, I'll go to ShopRite today."

Re: Amazon’s Battle to Break into the Grocery Market

#13

Post by wongarsu »

jerf wrote: post #9
Gargoyle wrote: post #5

Earlier quoted context omitted.

I'll be a believer when it can handle a Thomas Crown scenario - multiple people in the same outfit crisscrossing around each other. While a bowler hat flashmob is unlikely, a group of similar dark jackets etc isn't.

Actually, you can't forget the possibility that someone will attack it, for profit or even just the lulz. If you have the idea I can pretty much promise someone's going to try it long before there's a 1000 of these stores.

People are attacking regular stores' checkout systems already. We call those people shoplifters. And our normal method of dealing with them (have a human that catches a few of them to deter the more law-abiding citizens) will work equally well in a checkout-less store.

The big new challenge is telling the difference between a shoplifter and a normal software error. But that is only relevent for the most sophisticated shoplifting ideas.

Re: Amazon’s Battle to Break into the Grocery Market

#14

Post by gwern »

thedarkginger wrote: post #4

I know this discusses a few strategic plays Amazon is making but shortfalls of the self-checkout project (AmazonGo) are interesting: "In its video touting Amazon Go, the company said it was aiming to open the site to the public in “early 2017,” and it hasn’t provided an update to that timing. But the technology has been crashing in tests when the store gets too crowded and requires human quality control, people watch…

When the demo was released, people had a lot of questions about how the cameras would deal with occlusions and products being covered up by bodies and odd angles. Recognizing and localizing and tracking a single person picking up individual items slowly is a much easier task than tracking many people in a crowd crisscrossing and blocking the camera constantly; that it is apparently failing in exactly the scaled up realistic scenarios where you would predict increased failures points to it being a genuine difficulty and not simply too few crowded scenes in the training set.

(I bet their deep learning team is having a lot of fun trying to figure out how to make RNNs rather than CNNs scale and train well...)

Re: Amazon’s Battle to Break into the Grocery Market

#15

Post by losteverything »

justaman wrote: post #11
lotso wrote: post #8

Earlier quoted context omitted.

From the article >“Amazon wants to be the first thing any consumer thinks of when they need to buy anything,” said Jim Hertel, a senior vice president at marketing technology company Inmar Inc. “Food is the largest retail category. They can’t do what they want to do without grocery and they’re definitely not going to give up.” I'd also imagine Amazon thinks they can do much better than a 1.7% margin by leveraging all…

2030: Government breaks up Amazon into smaller companies.

Judge Greene's grandaughter presides over the case.

But. One difference was that At&T got something for agreeing (able to sell computers). What is Amazon prevented from doing??????

[1] The case, one of Greene's first after being named to the bench, resulted in the 1982 consent decree between AT&T and the Federal Trade Commission. The consent decree, later amended and usually called the modified final judgment (MFJ), provided for the Bell System divestiture, AT&T's spin off of the seven Regional Bell Operating Companies (RBOCs). The conclusion of the case freed AT&T to enter the computer industry, from which it had previously been barred

Re: Amazon’s Battle to Break into the Grocery Market

#16

Post by strictnein »

petra wrote: post #10
samfisher83 wrote: post #7

Grocery net profits are 1.7%. http://www.fmi.org/research-resources/supermarket-facts Amazon barely makes money on retail operations. What is their rationalization in getting into this market?

Margins don't tell whole story of that business.If you start with $100 and sell $100 worth of products each year, than yes, your profit will be 1.7%. But if sell products fast("inventory turnover - TTM") and re-use the money, with $100, you can sell $1000 of product per year,getting 17% yearly ROI. But of course 1.7% is low so it's not easy staying on the positive side of profit.

He mislabeled the stat. Grocery profits are 1.7%, not margins.

> Net profit after taxes-2015 1.7%

Re: Amazon’s Battle to Break into the Grocery Market

#17

Post by illumin8 »

wongarsu wrote: post #13
jerf wrote: post #9

Earlier quoted context omitted.

Actually, you can't forget the possibility that someone will attack it, for profit or even just the lulz. If you have the idea I can pretty much promise someone's going to try it long before there's a 1000 of these stores.

People are attacking regular stores' checkout systems already. We call those people shoplifters. And our normal method of dealing with them (have a human that catches a few of them to deter the more law-abiding citizens) will work equally well in a checkout-less store. The big new challenge is telling the difference between a shoplifter and a normal software error. But that is only relevent for the most sophisticated…

Exactly. And, since you have to scan your smartphone before entering, they already have your name, address, credit card details, etc., so shoplifting would be extremely risky. Most teenage shoplifters might be able to outrun a security guard that saw them leaving with unpaid items, but what good does it do you when the store already has all your personal details and can simply send the police to pick you up at home?

Re: Amazon’s Battle to Break into the Grocery Market

#18

Post by Spooky23 »

It's cool that they are trying to innovate here, but it seems like a weird area to focus on.

The high growth areas in grocery are things like prepared foods and produce. Owning the middle of the store to try to out-Walmart Walmart seems like a low-value proposition.

I've been using Amazon Fresh for a few months. The delivery aspect is awesome, but the rest of the business is pretty questionable. They cannot keep anything in stock, and I'm basically getting a week of groceries free every month because they cannot figure out that dropping a cantaloupe on top of a bag of Doritos and loaf of bread is a bad move.

Re: Amazon’s Battle to Break into the Grocery Market

#19

Post by jenamety »

odonnellryan wrote: post #12

So, my problem with this: I can't usually get things delivered in the same day I want them, and sometimes even the next day. There's no slot available and so on. I don't really think out what I need days in advance. I'm like, "oh, I'm out of... whatever, I'll go to ShopRite today."

So if i knew you order toothpaste on average every 48 days, i could put a new one in cheapo snail mail on day 43. who is in the best position to predict this and take it completely off your mind? current grocers or amazon? your scenario presumes you need to invoke the order yourself. Amazon is going to be predicting your needs (poorly at first but improving over time). I'd wager this big picture includes getting audio feeds from your house 'hey - who drank the last of the milk?' 'are we out of eggs?', 'that's a shame, these strawberries went bad before i could use them'. I'm sure amazon has considered trash/recycling services to scan product barcodes to see what you've used up to add to the 'predict you' models.

A big challenge is going to be charging me for product i don't need yet. if i get toothpaste 15 days in advance of needing it because i traveled for 15 days of the period, then i'm not going to like being billed for something so soon. i'll feel scammed, like they're trying to ram product/sales down my throat. for this i'd be curious to see if there's a way to charge when the product begins to be used- so medicine shelf time doesn't cost you. That and no-brainer returns. (think dash button for come pick a product up)

Just my 2 cents

Re: Amazon’s Battle to Break into the Grocery Market

#20

Post by petra »

strictnein wrote: post #16
petra wrote: post #10

Earlier quoted context omitted.

Margins don't tell whole story of that business.If you start with $100 and sell $100 worth of products each year, than yes, your profit will be 1.7%. But if sell products fast("inventory turnover - TTM") and re-use the money, with $100, you can sell $1000 of product per year,getting 17% yearly ROI. But of course 1.7% is low so it's not easy staying on the positive side of profit.

He mislabeled the stat. Grocery profits are 1.7%, not margins. > Net profit after taxes-2015 1.7%

This is net-profit from revenue, i.e. from those $1000 of sold goods. But you only need to invest $100 to buy them.
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