Amazon Fresh, take 2

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Re: Amazon Fresh, take 2

Post by HCal »

I have a feeling that profitability isn't really a concern for these stores. My theory is that they are using this chain to test and perfect various technology, including the dash carts and grab-and-go. Eventually, they can either deploy or license it en masse. Until then, these stores are just R&D expense.
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Re: Amazon Fresh, take 2

Post by buckguy »

There may have been people at Amazon who had larger ideas for these stores, but I think the worst case scenario was that they would learn a ton about software and tech for stores that they could license. They also would have more data on customers to sell. The small format stores have such an odd assortment that they can't be a serious marketing effort. The larger ones seem like more serious efforts, but they probably were doing too anemically to even serve the software/tech objectives.
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Re: Amazon Fresh, take 2

Post by ClownLoach »

HCal wrote: November 28th, 2023, 2:45 am I have a feeling that profitability isn't really a concern for these stores. My theory is that they are using this chain to test and perfect various technology, including the dash carts and grab-and-go. Eventually, they can either deploy or license it en masse. Until then, these stores are just R&D expense.
buckguy wrote: November 28th, 2023, 11:28 am There may have been people at Amazon who had larger ideas for these stores, but I think the worst case scenario was that they would learn a ton about software and tech for stores that they could license. They also would have more data on customers to sell. The small format stores have such an odd assortment that they can't be a serious marketing effort. The larger ones seem like more serious efforts, but they probably were doing too anemically to even serve the software/tech objectives.
Profitability is apparently a very big concern because they impounded nearly a billion dollars to cover the loss of closing the entire chain if needed, which means they are very serious about pulling the plug and will have to unless they can pull the ultimate "Hail Mary," and Wall Street has been pissed all year about the impairment charge. If profitability wasn't a concern then they wouldn't have closed the Fresh Pickups in Seattle, the 4 Star stores, the Bookstores, and the Apparel stores. Profit is under so much scrutiny that Amazon has abandoned nearly every Retail effort except for Whole Foods which they've ruined and the Zombie Fresh operation. Andy Jassy has decided he is going to ride this retail horse until either it suddenly becomes profitable or it costs him his job, upon which the first thing his replacement will do is liquidate the whole thing (and probably sell WFM too).

The Amazon made Dash cart seems to be dead. They are moving away from the Just Walk Out technology and going to ordinary NCR self checkout units from WFM and what appears to be a clone of the Instacart made "dash cart" clone. If anything, it appears that Amazon is removing all of their proprietary tech from these stores and fast (maybe to facilitate a sale?). And the technology from Just Walk Out was so buggy and inoperative that it couldn't possibly be delivering any useful customer data, plus there are so few stores and so little in sales that you're talking about an IP database that at liquidation would bring in tens of dollars. It's a database of failure.

There is no testing of any new tech anymore that I see with standard self checkouts being installed in the revised stores. Just Walk Out has proven to only work in very small, low SKU intensity environments like stadium concession stands and convenience stores, and its total failure in the Fresh stores plus few WFM's that got it has doomed any chance of industry licensing or adoption. Amazon has already admitted publicly that Just Walk Out has led customers to do just that without buying anything and it is perceived to be a deterrent to sales because of all the gates and such. And the cost per store to install it is in the 8 figure range, I wish I was joking but I am not and the most expensive parts are going up not down (cabling, electrical wiring, labor for installation). Other companies are doing Dash Carts better than Amazon did and licensing them at a fraction of the cost (the Amazon carts supposedly were costing the company $25K a cart!!! They basically had a whole server underneath each one with large batteries). The Instacart version is already running at Bristol Farms very well. And nobody is going to spend more on the cost of the Just Walk Out camera system than it costs to build out the entire supermarket.

RFID Technology is expanding at lightning speed as the stickers continue to shrink in size. I could easily see an all RFID supermarket with instantaneous checkout just like the science fiction type pictures from the 70's and 80's rendering the entire Just Walk Out technology with hundreds of miles of network cables, server rooms, etc. a complete waste of time as an ordinary cash register would just have a big "tunnel" that the cart is pushed through and completely "scanned" within one second even if there are a hundred items in it. The existing POS system handles everything, the RFID scanner just plugs in and inputs all of the "EPC's" instantly. Lowe's and Target are working hard on RFID in hardlines, Adidas and Uniquo have adopted it completely in softlines (search for Uniquo self checkout, basically you throw all your items into a bin that looks like a hamper and they are all scanned in one second with your itemized total on the screen). The cost per tag is below a penny already and shrinking, which would enable a future of "smart" RFID checkouts that replace both self checkout and full service in stores as even a Costco flatbed could be fully scanned in a second just being pushed through this tunnel. RFID cost drops plus labor cost increases will bring us this tech as the industry standard so quickly it's going to make everyone's head spin, and all of the tech isn't Amazon's... in fact they don't appear to be using RFID at all as proprietary barcodes still appear on all Amazon shipped items. After spending billions of dollars on Just Walk Out it is doomed to failure and will never be profitable.

At this point they are just screwing around and I can't help but wonder if the pathetic attempts at finding an assortment that is tolerable to the customer is just so that they can offload these things to some interested party so that they can recover some of the billion dollar store closing fund and walk away from them. Maybe C&S will take them off their hands and they can merge them with their acquired KR/ACI stores if that deal is allowed to go through.
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Re: Amazon Fresh, take 2

Post by mbz321 »

I have no idea what Amazon is trying to do with groceries anymore....I received this in the mail the other day and it leaves me puzzled. So the groceries are gathered at a Weis store by Weis employees, then delivered by an Amazon contractor? Why? Why would Amazon want to divert business away from its own 'Fresh' business? Weis already partners with Instacart and Shipt, and has a pickup option. Are any other grocery chains doing this?

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Re: Amazon Fresh, take 2

Post by marketreportblog »

mbz321 wrote: December 3rd, 2023, 5:49 pm I have no idea what Amazon is trying to do with groceries anymore....I received this in the mail the other day and it leaves me puzzled. So the groceries are gathered at a Weis store by Weis employees, then delivered by an Amazon contractor? Why? Why would Amazon want to divert business away from its own 'Fresh' business? Weis already partners with Instacart and Shipt, and has a pickup option. Are any other grocery chains doing this?
Here's what Winsight Grocery Business has to say about it from last month.

And I am very confused also. I don't get it. I do remember, though, that someone (I can't remember if it was someone on here?) was speculating that Weis had gotten themselves involved with the intention of taking on some of the mid-Atlantic Amazon Fresh stores in the future. If they're already partnered with Amazon, they're a clear preference to just quietly convert a couple Amazon Fresh stores when or if the Amazon Fresh retail store program is canceled. On the flip side, it's also possible that Amazon wants a foot in the door to get whichever retail technology they happen to be hawking at the moment into the Weis stores. But at the same time, just a few days ago on this thread ClownLoach was discussing the ways Amazon was cutting back on their various in-store technologies. Who knows.
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Re: Amazon Fresh, take 2

Post by ClownLoach »

marketreportblog wrote: December 3rd, 2023, 7:37 pm
mbz321 wrote: December 3rd, 2023, 5:49 pm I have no idea what Amazon is trying to do with groceries anymore....I received this in the mail the other day and it leaves me puzzled. So the groceries are gathered at a Weis store by Weis employees, then delivered by an Amazon contractor? Why? Why would Amazon want to divert business away from its own 'Fresh' business? Weis already partners with Instacart and Shipt, and has a pickup option. Are any other grocery chains doing this?
Here's what Winsight Grocery Business has to say about it from last month.

And I am very confused also. I don't get it. I do remember, though, that someone (I can't remember if it was someone on here?) was speculating that Weis had gotten themselves involved with the intention of taking on some of the mid-Atlantic Amazon Fresh stores in the future. If they're already partnered with Amazon, they're a clear preference to just quietly convert a couple Amazon Fresh stores when or if the Amazon Fresh retail store program is canceled. On the flip side, it's also possible that Amazon wants a foot in the door to get whichever retail technology they happen to be hawking at the moment into the Weis stores. But at the same time, just a few days ago on this thread ClownLoach was discussing the ways Amazon was cutting back on their various in-store technologies. Who knows.
This isn't new. Amazon has been delivering for Bristol Farms and Lazy Acres in SoCal for at least 5 years, maybe closer to 8 or 9. They used to have a separate app for these grocery store deliveries called "Prime Now Delivery" but they combined it with the regular Amazon app. I thought when Amazon bought Whole Foods that the relationship with competitors Bristol Farms and Lazy Acres would end, but it didn't. (Note: I moved away from Bristol Farms coverage area a year ago and they recently signed a big new deal to use Instacart's new tech that competes with Amazon including their own version of a "dash cart" so maybe they've stopped delivering for Bristol but if that is the case it is very recent and 2+ years after the Amazon Fresh nearest opened). I think these 3rd party deals are going to outlast the fresh stores...
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Re: Amazon Fresh, take 2

Post by storewanderer »

mbz321 wrote: December 3rd, 2023, 5:49 pm I have no idea what Amazon is trying to do with groceries anymore....I received this in the mail the other day and it leaves me puzzled. So the groceries are gathered at a Weis store by Weis employees, then delivered by an Amazon contractor? Why? Why would Amazon want to divert business away from its own 'Fresh' business? Weis already partners with Instacart and Shipt, and has a pickup option. Are any other grocery chains doing this?

Image
My guess is, similar how they appear to be using Nash Finish to supply the Chicago Amazon Fresh Stores (which is sure to finish them off quick), they are using Weis to supply the Amazon Fresh Stores in your area now...

I wonder if this may be their new plan for the Fresh Stores. Try to partner with some regional grocer to supply the stores and give them the Amazon back end to do online sales through...

This will make the uneven operation even more uneven.
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Re: Amazon Fresh, take 2

Post by retailfanmitchell019 »

storewanderer wrote: December 3rd, 2023, 8:56 pm
mbz321 wrote: December 3rd, 2023, 5:49 pm I have no idea what Amazon is trying to do with groceries anymore....I received this in the mail the other day and it leaves me puzzled. So the groceries are gathered at a Weis store by Weis employees, then delivered by an Amazon contractor? Why? Why would Amazon want to divert business away from its own 'Fresh' business? Weis already partners with Instacart and Shipt, and has a pickup option. Are any other grocery chains doing this?

Image
My guess is, similar how they appear to be using Nash Finish to supply the Chicago Amazon Fresh Stores (which is sure to finish them off quick), they are using Weis to supply the Amazon Fresh Stores in your area now...

I wonder if this may be their new plan for the Fresh Stores. Try to partner with some regional grocer to supply the stores and give them the Amazon back end to do online sales through...

This will make the uneven operation even more uneven.
Sounds like the 70s Kmart Food- Kmart Food Stores were franchised by Kmart out to other grocers (Allied Supermarkets, based in Detroit, was the biggest Kmart Food franchisee. A local wholesaler like Certified Grocers would sometimes supply the stores).
Also sounds like the deals Kmart had with wholesalers to supply the Super Kmarts (the ones in CA were supplied by Unified, CO was supplied by Nash Finch).

Love your nicknames for wholesalers. Nash Finish and Flaming. Gotta come up with a good nickname for Supervalu. :lol:
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Re: Amazon Fresh, take 2

Post by storewanderer »

retailfanmitchell019 wrote: December 3rd, 2023, 11:05 pm
Also sounds like the deals Kmart had with wholesalers to supply the Super Kmarts (the ones in CA were supplied by Unified, CO was supplied by Nash Finch).

Love your nicknames for wholesalers. Nash Finish and Flaming. Gotta come up with a good nickname for Supervalu. :lol:
Colorado Super Kmarts went through multiple suppliers. They were supplied by Supervalu, then Fleming, then Nash Finch. CA/AZ/NV was supplied by Fleming even after Fleming "terminated" Kmart, then when Fleming went under switched to Unified SoCal.

I never could come up with a nickname for Supervalu. I've always had a bit of an inconclusive attitude about Supervalu. They completely destroyed Albertsons yet their own retail operations seemed a lot better (Cub, Shoppers, Shop & Save MO before it closed). I've seen some regionals supplied by Supervalu that seem pretty good and I think their private label set/program is very good after they did the EE/Equaline thing to it basically taking the old Albertsons private label program and making it their own (thought it was poor before as Flavorite at WinCo).
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Re: Amazon Fresh, take 2

Post by ClownLoach »

storewanderer wrote: December 3rd, 2023, 8:56 pm
mbz321 wrote: December 3rd, 2023, 5:49 pm I have no idea what Amazon is trying to do with groceries anymore....I received this in the mail the other day and it leaves me puzzled. So the groceries are gathered at a Weis store by Weis employees, then delivered by an Amazon contractor? Why? Why would Amazon want to divert business away from its own 'Fresh' business? Weis already partners with Instacart and Shipt, and has a pickup option. Are any other grocery chains doing this?

Image
My guess is, similar how they appear to be using Nash Finish to supply the Chicago Amazon Fresh Stores (which is sure to finish them off quick), they are using Weis to supply the Amazon Fresh Stores in your area now...

I wonder if this may be their new plan for the Fresh Stores. Try to partner with some regional grocer to supply the stores and give them the Amazon back end to do online sales through...

This will make the uneven operation even more uneven.
This is a very old Amazon program, not a new one, and frankly a program that I'm surprised is still around. The Amazon flex delivery drivers get more work because they have more stores to service besides the moribund Fresh and Whole Foods locations. The stores pick their own goods and pack. It has nothing to do with supply. It was a program called Prime Now that also was a restaurant delivery service but that side died out along with being a separate app. They also had a very limited selection of Amazon goods that were available in a 2 hour window. Basically every part of Prime Now is now dead except for the only part that was popular and that was local delivery for these grocery stores. It's not representative of anything to do with supplying Fresh stores, not connected in any way, it's merely a piece of software that could be turned off any day but obviously it makes some kind of profit for all involved. Everyone is making a much bigger deal of this than it really is, Weis isn't stocking Fresh and neither is Bristol Farms or any of the other chains that participate.
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