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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

#101

Post by tonyedgecombe »

afarrell wrote: post #30

Amazon needs to get a lot better at selling people complimentary goods. Once I buy something, I frequently see multiple advertisements for that exact product. Why can't they develop a database of products that compliment each other and so when someone buys a kitchen tool, they start advertising cookbooks. Example: "On Prime Day, Members purchased over 215,000 Instant Pot 7-in-1 Multi-Functional Pressure Cookers" http…

From a customer perspective I wish they would try selling to me a bit less, I don't shop at retail stores that are too in your face, it's getting like that at Amazon.

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

#102

Post by Lio »

If Amazon can't be trusted to sell genuine memory cards, Apple accessories or even books now, I wouldn't buy baby food from them.

https://twitter.com/billpollock/status/844030960333152256

https://9to5mac.com/2016/10/19/amazon-fake-apple-chargers-ca...

http://247wallst.com/consumer-electronics/2016/12/05/amazon-...

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

#103

Post by alasdair_ »

trome wrote: post #24
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…

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 do. I order from Amazon Fresh every week. The reason is simple: after fifteen weeks of having Safeway deliver my food, not a single time did they deliver all of the items I actually ordered.

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

#104

Post by binarysolo »

afarrell wrote: post #30

Amazon needs to get a lot better at selling people complimentary goods. Once I buy something, I frequently see multiple advertisements for that exact product. Why can't they develop a database of products that compliment each other and so when someone buys a kitchen tool, they start advertising cookbooks. Example: "On Prime Day, Members purchased over 215,000 Instant Pot 7-in-1 Multi-Functional Pressure Cookers" http…

They do do this -- people who buy X also buy Y.

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

#105

Post by adventured »

55555 wrote: post #92
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?

I am really skeptical of this. Most retail stores sell at a 1.5X-2X markup from wholesale, and the big grocery chains around me have massive private label businesses. This statistic might be missing the extra profits they get from owning their own food brands as those might belong to separate companies?

There have been numerous public grocery store companies over the decades, so the financials are very well understood at this point. They're all notorious for very poor margins. Most of retail in general is famous for mediocre margins to begin with, and then inside of retail, near the very bottom, is the grocery business.

Take Whole Foods an an example. They're a top tier margin company inside of the grocery business. Their net income margin is typically 3%. That's a good outcome in the business. The net income margin for Sprouts Farmers Markets the last three years: 2.5%, 3.5%, 3.6%.

The retail business in the US also happens to pay among the highest corporate income tax levels on the planet. Whole Foods paid 38.6% last year (almost 39% the year before that); Sprouts paid 37.6%. They get squeezed from almost every direction.

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

#106

Post by ryanlol »

bogomipz wrote: post #85
trome wrote: post #36

Earlier quoted context omitted.

Depends, twice I've had to ship it back, and once Amazon told me there were no returns and refunded me (Samsung Evo+ 64GB that only did 6MB/s, rated at minimum 10MB/s). That being said, I need to throw that MicroSD card away, whenever I use it in a camera or single board computer instead of a tested Evo, it causes poor performance.

Oh I was asking about the food ordering specifically. I was curious how errors are resolved with perishable items.

Complain, receive refund.

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

#107

Post by norea-armozel »

I'm not sure if Bezos and company know what they're getting themselves into with the US grocery business. It's a cut throat business which has not just some big players but several small to medium sized grocery chains (some as subsidiaries and some as stand-alone companies). And I can tell you as someone who's work in grocery the profit margins are thin outside of the US holidays. Frankly, if Bezos thinks this is going to lead to adding actual profitability to the delivery of their other products I'm not sure I see that possibility materializing under the guise of grocery stores and grocery delivery. I hope they have plans to retreat from that business when (not really if) Kroger and Walmart hammer them on the price. Otherwise, I can see them learning a painful lesson in the near future.

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

#108

Post by jenamety »

alexmingoia wrote: post #33
jenamety wrote: post #22

Earlier quoted context omitted.

>it seems like a weird area to focus on i see it as you the consumer are the focus, not the products you buy. Knowing you as a consumer is the goal to be able to serve your every purchase. I'm really surprised Amazon doesn't have a branded credit card that offers unbeatable rewards, thereby seeing all user transactions.

They do have a branded credit card. You get 5% back on all Amazon purchases and other Amazon benefits. It's a visa I think provided through chase.

yes, but that's far from attractive. i calculated it out for my family of 4 and based on my amazon spending (maybe mid to slightly above avg) 5% on amazon doesn't beat the 2% i get on all transactions. If they want to be top of wallet (and visibility into my other spending) they need to have better than 2% on the non-amazon transactions.

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

#109

Post by bogomipz »

ryanlol wrote: post #106
bogomipz wrote: post #85

Earlier quoted context omitted.

Oh I was asking about the food ordering specifically. I was curious how errors are resolved with perishable items.

Complain, receive refund.

So no different than any other Amazon order. I've noticed I have do the "complain receive refund" more and more in the last year with them.

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

#110

Post by HeavenBanned »

twothamendment wrote: post #80

I buy a lot on amazon, but groceries? I can't see it happening. I really don't want counterfeit Oreos.

How often does counterfeiting really occur? Anyone have stats? I have been buying from Amazon for at least a decade and have never run into a counterfeit item. Is it just me, or is Amazon trying to cover something up?
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