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Amazon’s Battle to Break into the Grocery Market

bloomberg.com

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

#41

Post by losteverything »

Johnie wrote: post #32
Spooky23 wrote: post #18

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 anyt…

>I've been using Amazon Fresh for a few months. This is an artifact of living in Silicon Valley bubble. The rest of the country don't live this way.

I know from my job: Amazon Fresh is addictive. It is probably the worse type of thing to deliver for delivery people.

Yet week after week the same people get Fresh. And week after week we all say the same thing. "You lazy (expletive). You don't work. You are retired. How fregging lazy are you!!!!! Get off the couch and go to the store yourselves. "

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

#42

Post by baron816 »

Physical supermarkets can still be really terrible. It always seems to take me over an hour to do my grocery shopping.

My idea to bring the industry into the 21st century would be take a similar route to Blue Apron et al, where all the ingredients are combined into a single package. The difference is that the work of preparation would be distributed to local restaurants looking to supplement their income, and people would just pick up their uncooked packages there. That would keep the cost down and scale well, while still being convenient for customers and allow them to cook new, interesting meals everyday.

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

#43

Post by ryanworl »

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?

And why are the net profits 1.7%? What are the major drivers of cost, and how might Amazon be positioned to combat those?

Also, Amazon running a business at 1.7% net profit for the sake of keeping existing customers happy and potentially acquiring more of them might be worthwhile.

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

#44

Post by CodeWriter23 »

petra wrote: post #20
strictnein wrote: post #16

Earlier quoted context omitted.

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.

No. Sell them then invest another $100 to restock. ROI remains at 1.7%.

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

#45

Post by trome »

bearcobra wrote: post #39
trome wrote: post #24

Earlier quoted context omitted.

Sure, but who'd actually trust Amazon with their food? I know I wouldn't, they've screwed up 3 out of 5 orders in the past year, leading me to have little faith that they won't give me E Coli covered veggies. They're opening a large, car centric Amazon Grocery pickup location just over in Ballard as a test, but the particular location they picked is a parking lot for 3 to 4 hours a day, and is over 3 blocks from tran…

I've ordered groceries with Prime Now a few times and never once was worried about trust. I'd probably trust their produce more as the people who have also touched it aren't random shoppers.

Sure, but that isn't the prime vector of E Coli and other illnesses spreading. E Coli literally comes from workers shitting in the fields due to the breakdown of the labor movement, as they are not allowed breaks or access to a bathroom with a place to wash afterwards. Thus how you end up with Chipotle serving up E Coli covered veggies.

Not having a store that your food comes from might make for a safer mental picture, but Amazon is going to go with the cheapest vendor every time, and they don't have the scale of Kroger or HEB to knock prices down anywhere near them, thus they must buy lower quality goods to hit the same price point.

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

#46

Post by trome »

thedarkginger wrote: post #40
trome wrote: post #24

Earlier quoted context omitted.

Sure, but who'd actually trust Amazon with their food? I know I wouldn't, they've screwed up 3 out of 5 orders in the past year, leading me to have little faith that they won't give me E Coli covered veggies. They're opening a large, car centric Amazon Grocery pickup location just over in Ballard as a test, but the particular location they picked is a parking lot for 3 to 4 hours a day, and is over 3 blocks from tran…

Since the article stresses repeatedly that Amazon is all-in on produce... I think this is a big question for their ML approach. One of the annoying parts of not-really-self-checkout that is available in big grocery stores today is that you have to scroll through a screen, choose the correct brand (i.e. Dole Banana), and then weigh it before it prices your order. Wonder what their strategy is to price variable weight…

Amazon will likely pre-weigh the items and give each a price embedded barcode, though it will be quite labor intensive even with the $100k wrap and weigh machines you can buy today.

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

#47

Post by soheil »

A few things that Amazon could do better compare to Instacart:

- they bring you huge green boxes and often put only one or two items in each, they are highly unsightly and take up a lot of room, this must be part of their marketing campaign since it has Amazon written all over it, they ask you to return them the next time after their logo has been imprinted on every part of your brain

- sometimes they put ice bags in said boxes if you forget to take them out they melt and not all the boxes are water proof so water can run through them onto the floor and it can also spoil even if you take the ice out since it leaves the box moist

- not clear where they source their items, Instacart is clear if I want Wholefoods I select Wholefoods, Amazon seem to have way fewer options and not intuitively clear if I'm ordering from a store that I picked or getting random access grocery (RAG)

- they mention they have Belcampo as a store when navigating to it they only allow you to purchase sausages!!!

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

#48

Post by brokenmasonjars »

Sort of wish they'd focus on what they already have first. I mean I get it, it's a good market to get into ...but.. how about - making a single login for abebooks fr, uk, com, etc.. that aligns with your main amazon account and - audible account. Why do I need maybe 7 different accounts on services owned by the same company? Better yet, how about taking the databases of books on sale at the various abebooks sub regional sites and put them on the main amazon.com page. I collect a lot of old cookbooks, and old lectures (Rede, Chichele, Ford etc) and often find that to find better deals than what is on amazon.com I have to go on different abebooks sites to find them. Also - have had experiences where I go on amazon fr or ca and order a cookbook easily purchasable on those sites vs .com site. It's terribly aggravating! So I just wish they'd focus on making that easier to deal with before venturing onto other areas. That said, grocery should be decent.. I already hire taskrabbit individuals to do my shopping for me..they are hit or miss.. I never put them in charge of buying seafood..never.

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

#49

Post by nommm-nommm »

ghaff wrote: post #28
jenamety wrote: post #19

Earlier quoted context omitted.

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 audi…

Amazon already has subscriptions. Personally, I don't buy anything with a combination of frequency and predictability that makes a subscription make sense but obviously some people do. (Diapers I assume are one thing.) And that becomes harder with with perishables. Customizable but pre-populated (based on prior purchases) would seem to make a lot more sense.

The only thing that makes any sense for me to get on subscription is cat food. Cat has prescription food, so it doesn't change in price, and he eats the same amount every day.

Not from Amazon though, I get autoshipped from Chewy.com.

Pretty much every other thing one would subscribe to I'm going to buy when its on sale. I'm sure Amazon predicting my needs would be at a premium cost.

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

#50

Post by komali2 »

thedarkginger wrote: post #40
trome wrote: post #24

Earlier quoted context omitted.

Sure, but who'd actually trust Amazon with their food? I know I wouldn't, they've screwed up 3 out of 5 orders in the past year, leading me to have little faith that they won't give me E Coli covered veggies. They're opening a large, car centric Amazon Grocery pickup location just over in Ballard as a test, but the particular location they picked is a parking lot for 3 to 4 hours a day, and is over 3 blocks from tran…

Since the article stresses repeatedly that Amazon is all-in on produce... I think this is a big question for their ML approach. One of the annoying parts of not-really-self-checkout that is available in big grocery stores today is that you have to scroll through a screen, choose the correct brand (i.e. Dole Banana), and then weigh it before it prices your order. Wonder what their strategy is to price variable weight…

They might go the way of Trader Joe's and just charge a blanket price per "piece" of produce.
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