AmazonFresh scaling back

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pseudo3d
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AmazonFresh scaling back

Post by pseudo3d » November 3rd, 2017, 10:40 pm

AmazonFresh customers in several states, including parts of New York, New Jersey, Pennsylvania, Delaware, Maryland, California, Virginia, Connecticut and Massachusetts, have reported receiving notices that AmazonFresh would discontinue service in their area, according to a report on technology news website Recode.
http://www.supermarketnews.com/online-r ... phic-areas
Amazon says "select ZIP codes" have been discontinued but I wonder what's really going on. Since no fulfillment centers are closing, I wonder if these are in relation to some suburban areas being less profitable than urban areas, or just smaller markets. Maybe grocery delivery isn't as big as the industry thought.

storewanderer
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Re: AmazonFresh scaling back

Post by storewanderer » November 3rd, 2017, 11:11 pm

Or they are trying to fine tune it and connect it to Whole Foods somehow.

But you are right in that grocery delivery has been a proven money pit now for the past two decades...

The financial markets that have been propping Amazon up so high at the expense of the traditional grocers are about to eat a lot of crow.

pseudo3d
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Re: AmazonFresh scaling back

Post by pseudo3d » November 4th, 2017, 6:33 am

storewanderer wrote:
November 3rd, 2017, 11:11 pm
Or they are trying to fine tune it and connect it to Whole Foods somehow.

But you are right in that grocery delivery has been a proven money pit now for the past two decades...

The financial markets that have been propping Amazon up so high at the expense of the traditional grocers are about to eat a lot of crow.
Grocery delivery does seem to be a fad that comes and goes, doesn't it? I imagine that Albertsons might follow suit with its grocery delivery, cutting service especially in more "out there" markets like Florida and sticking with more established urban markets, which it has more of than any other tradiitonal grocer (Boston, Washington DC, Chicago, San Francisco, Philadelphia). It might help with their profitability, or lack thereof.

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Re: AmazonFresh scaling back

Post by Alpha8472 » November 4th, 2017, 4:27 pm

Grocery delivery has always been a money loser. A major reason for the Whole Foods acquisition was to try to switch the AmazonFresh grocery customers to the stores which are more profitable. Amazon still keeps some of the grocery customers.

The grocery delivery business for Safeway is also a money loser. Once Amazon stops delivering groceries to those areas, customers will probably switch to Safeway. Safeway will get more customers and incur even more losses. Amazon wants to shift the burden to some other company.

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Re: AmazonFresh scaling back

Post by storewanderer » November 4th, 2017, 9:52 pm

pseudo3d wrote:
November 4th, 2017, 6:33 am
storewanderer wrote:
November 3rd, 2017, 11:11 pm
Or they are trying to fine tune it and connect it to Whole Foods somehow.

But you are right in that grocery delivery has been a proven money pit now for the past two decades...

The financial markets that have been propping Amazon up so high at the expense of the traditional grocers are about to eat a lot of crow.
Grocery delivery does seem to be a fad that comes and goes, doesn't it? I imagine that Albertsons might follow suit with its grocery delivery, cutting service especially in more "out there" markets like Florida and sticking with more established urban markets, which it has more of than any other tradiitonal grocer (Boston, Washington DC, Chicago, San Francisco, Philadelphia). It might help with their profitability, or lack thereof.
Albertsons is about to roll out home delivery at Jewel. I think this makes sense due to population density in Chicago as well as building upon the strong name and market share of Jewel. Recall that Albertsons.com was a thing before (I think they were doing online delivery before Safeway.com) but it was shuttered as the company was broken up.

Safeway.com has been successful because they have been very selective/careful about what markets they go into. They typically only go into the more dense markets and even then they do not always serve the entire market.

I think the delivery service in Florida was an example of "throwing whatever you can think of out there and hoping something sticks." Also those delivery vehicles driving around are little advertising things as well.

pseudo3d
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Re: AmazonFresh scaling back

Post by pseudo3d » November 5th, 2017, 6:31 am

storewanderer wrote:
November 4th, 2017, 9:52 pm
pseudo3d wrote:
November 4th, 2017, 6:33 am
storewanderer wrote:
November 3rd, 2017, 11:11 pm
Or they are trying to fine tune it and connect it to Whole Foods somehow.

But you are right in that grocery delivery has been a proven money pit now for the past two decades...

The financial markets that have been propping Amazon up so high at the expense of the traditional grocers are about to eat a lot of crow.
Grocery delivery does seem to be a fad that comes and goes, doesn't it? I imagine that Albertsons might follow suit with its grocery delivery, cutting service especially in more "out there" markets like Florida and sticking with more established urban markets, which it has more of than any other tradiitonal grocer (Boston, Washington DC, Chicago, San Francisco, Philadelphia). It might help with their profitability, or lack thereof.
Albertsons is about to roll out home delivery at Jewel. I think this makes sense due to population density in Chicago as well as building upon the strong name and market share of Jewel. Recall that Albertsons.com was a thing before (I think they were doing online delivery before Safeway.com) but it was shuttered as the company was broken up.

Safeway.com has been successful because they have been very selective/careful about what markets they go into. They typically only go into the more dense markets and even then they do not always serve the entire market.

I think the delivery service in Florida was an example of "throwing whatever you can think of out there and hoping something sticks." Also those delivery vehicles driving around are little advertising things as well.
Albertsons also started doing grocery delivery in the Randalls stores (Houston and Austin) just a few months before the division and the DC had the plug pulled on them. For Houston, this doesn't make a whole lot of sense not just because of the sprawling city but because the Randalls stores are all in relatively suburban areas (a few exist in the urban core but not very many). What they should be focusing on in that (sub)division is lowering prices and expanding the store base. On the other hand, Albertsons has a collection of infiltrated urban markets (see my post above) that even Walmart can only dream of.

Point being, I think that Albertsons should pay attention to what Amazon is doing and focus on the markets that matter.

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Re: AmazonFresh scaling back

Post by lola42 » December 3rd, 2017, 4:45 pm

If I had to bet money, either the news outlets got it wrong (Amazon Fresh is revamping not scaling back) or Amazon is happy with traditional supermarkets thinking they're out of the game.

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