Amazon Fresh, take 2

[ClownLoach]

It wouldn't be surprising if Amazon is waiting for a decision on the Kroger/Albertsons merger to determine whether they really want to continue investing in Fresh, as competing with a newly expanded Kroger is the only reason at this point I could see as a good reason for Amazon to continue investing in it's Fresh stores, and even that, Amazon will still more likely be successful against them if they dropped Fresh and focused on Whole Foods and online grocery delivery regardless of the merger decision. If the merger falls through, I wouldn't be shocked if Amazon announces the closure/sale (and maybe a select few converted to Whole Foods) of all remaining Fresh stores within a couple days of the blocking of the merger.

Some SoCal Fresh stores, such as Corona, Whittier, La Habra, and Mission Viejo would be excellent locations for Whole Foods to take over, despite being on the smaller end in terms of store size.

Kroger/Albertsons seems more predicated on the Amazon Fresh expansion (remember, this was supposed to be some sort of game-changer, much like how Amazon Go was supposed to open hundreds of stores) than the other way around.

Third, I still have to wonder if they have something lined up with private equity folks to potentially offload Fresh and WFM together... And possibly to the next potential buyer of Albertsons (or Albertsons itself?) once Kroger gets blocked by the courts.

I have considered the possibility of Amazon either buying or investing in Albertsons after the merger falls through.

The problem would be how much of Amazon rubs off on Albertsons. If it's just to keep investors happy, give some bump to the Albertsons return counters, and a growth vehicle for the company, it's fine, but Amazon destroyed Whole Foods with its own policies and that could be bad for Albertsons when it comes to the fresh food departments. Or it could help...either way, there needs to be some sort of corporate separation due to the unions in Albertsons.

The big question is Whole Foods Market and its integration into Albertsons. In a way their business is obsolete as so much has changed since the 1990s when they were growing, but their wholly unique brand, their international expansion...it seems like it would be a poor fit; the only way I could see it working is if Albertsons (or whoever) does a massive purge/conversion of stores to bring it back to its original intention with only a few stores per metro area.

I am not convinced that the destruction of WFM was entirely at the hands of Amazon. They were already deep into implementing profit maximizing cutbacks, staffing changes, standardization, consolidated sourcing, and new technology before Amazon had even finished the acquisition. They had all of the so-called experts in on multi-million dollar consulting deals, like Accenture and AlixPartners, writing new procedures and staffing models etc. before the company was put for sale. They had all of that in the works due to the activist investor problems (Jana Funds and others), and it wasn't enough to appease them due to the long time lines so they wound up selling. People were complaining about inferior quality national contract sourced produce replacing local growers, standardized recipes at food bars and restaurants, and mass culling or removal of specialty perimeter dining venues that had already happened by the day of the ownership change... They were complaining that Amazon overnight had destroyed the company. And worse, they failed to provide enough information about why these changes were being made so that the employees could understand the reason why they couldn't order as much as they wanted, had to set planograms for the first time, etc. so once again when all these changes were being implemented at the same time the ownership change happened the employees also thought Amazon was responsible. But it isn't reality. Aside from Amazon lockers and return desks, I am not convinced that Whole Foods would look any different than it does today if they hadn't acquired it.

Where Amazon does NOT get a pass in my book is their failure to correct these problems. They saw and heard the negative customer and employee reaction to the WFM changes, but ignored them. They could have course corrected but chose not to.

But WFM management was running around swinging chainsaws everywhere they could to cut costs, and Amazon chose to ignore it, so I guess from that perspective it's their fault? Amazon has demonstrated that they really don't know much of anything about grocery aside from data mining; remember that they hired away a ton of Target people and basically picked their brains to build out Fresh. They obviously picked the wrong people since Target did a terrible job with foods, and now ironically we are seeing sparks of life in foods at Target for the first time in decades as new management has been installed. So I really have to question if Amazon is responsible for much of anything at WFM aside from the technology and delivery piece.

I would imagine that if somehow Albertsons was acquired by Amazon and merged in, that they would most likely let the Albertsons management take over the WFM and Fresh business entirely. I do think they would consider some format changes which could be problematic due to unions (like flipping some or all Pavilions into WFM, as well as converting some WFM to an Albertsons format). But in general I would expect Amazon would lay down some very limited expectations, add lockers and return desk, Prime discounts somewhere, and eventually integrate Flex employees and the Amazon app for pickup and delivery. Aside from that I think they would give Albertsons free reign and order them to fix the problems that customers perceive with today's WFM store, and I think they have the experience to do so.

[pseudo3d]

It wouldn't be surprising if Amazon is waiting for a decision on the Kroger/Albertsons merger to determine whether they really want to continue investing in Fresh, as competing with a newly expanded Kroger is the only reason at this point I could see as a good reason for Amazon to continue investing in it's Fresh stores, and even that, Amazon will still more likely be successful against them if they dropped Fresh and focused on Whole Foods and online grocery delivery regardless of the merger decision. If the merger falls through, I wouldn't be shocked if Amazon announces the closure/sale (and maybe a select few converted to Whole Foods) of all remaining Fresh stores within a couple days of the blocking of the merger.

Some SoCal Fresh stores, such as Corona, Whittier, La Habra, and Mission Viejo would be excellent locations for Whole Foods to take over, despite being on the smaller end in terms of store size.

Kroger/Albertsons seems more predicated on the Amazon Fresh expansion (remember, this was supposed to be some sort of game-changer, much like how Amazon Go was supposed to open hundreds of stores) than the other way around.

Third, I still have to wonder if they have something lined up with private equity folks to potentially offload Fresh and WFM together... And possibly to the next potential buyer of Albertsons (or Albertsons itself?) once Kroger gets blocked by the courts.

I have considered the possibility of Amazon either buying or investing in Albertsons after the merger falls through.

The problem would be how much of Amazon rubs off on Albertsons. If it's just to keep investors happy, give some bump to the Albertsons return counters, and a growth vehicle for the company, it's fine, but Amazon destroyed Whole Foods with its own policies and that could be bad for Albertsons when it comes to the fresh food departments. Or it could help...either way, there needs to be some sort of corporate separation due to the unions in Albertsons.

The big question is Whole Foods Market and its integration into Albertsons. In a way their business is obsolete as so much has changed since the 1990s when they were growing, but their wholly unique brand, their international expansion...it seems like it would be a poor fit; the only way I could see it working is if Albertsons (or whoever) does a massive purge/conversion of stores to bring it back to its original intention with only a few stores per metro area.

I am not convinced that the destruction of WFM was entirely at the hands of Amazon. They were already deep into implementing profit maximizing cutbacks, staffing changes, standardization, consolidated sourcing, and new technology before Amazon had even finished the acquisition. They had all of the so-called experts in on multi-million dollar consulting deals, like Accenture and AlixPartners, writing new procedures and staffing models etc. before the company was put for sale. They had all of that in the works due to the activist investor problems (Jana Funds and others), and it wasn't enough to appease them due to the long time lines so they wound up selling. People were complaining about inferior quality national contract sourced produce replacing local growers, standardized recipes at food bars and restaurants, and mass culling or removal of specialty perimeter dining venues that had already happened by the day of the ownership change... They were complaining that Amazon overnight had destroyed the company. And worse, they failed to provide enough information about why these changes were being made so that the employees could understand the reason why they couldn't order as much as they wanted, had to set planograms for the first time, etc. so once again when all these changes were being implemented at the same time the ownership change happened the employees also thought Amazon was responsible. But it isn't reality. Aside from Amazon lockers and return desks, I am not convinced that Whole Foods would look any different than it does today if they hadn't acquired it.

Where Amazon does NOT get a pass in my book is their failure to correct these problems. They saw and heard the negative customer and employee reaction to the WFM changes, but ignored them. They could have course corrected but chose not to.

But WFM management was running around swinging chainsaws everywhere they could to cut costs, and Amazon chose to ignore it, so I guess from that perspective it's their fault? Amazon has demonstrated that they really don't know much of anything about grocery aside from data mining; remember that they hired away a ton of Target people and basically picked their brains to build out Fresh. They obviously picked the wrong people since Target did a terrible job with foods, and now ironically we are seeing sparks of life in foods at Target for the first time in decades as new management has been installed. So I really have to question if Amazon is responsible for much of anything at WFM aside from the technology and delivery piece.

I would imagine that if somehow Albertsons was acquired by Amazon and merged in, that they would most likely let the Albertsons management take over the WFM and Fresh business entirely. I do think they would consider some format changes which could be problematic due to unions (like flipping some or all Pavilions into WFM, as well as converting some WFM to an Albertsons format). But in general I would expect Amazon would lay down some very limited expectations, add lockers and return desk, Prime discounts somewhere, and eventually integrate Flex employees and the Amazon app for pickup and delivery. Aside from that I think they would give Albertsons free reign and order them to fix the problems that customers perceive with today's WFM store, and I think they have the experience to do so.

If Amazon purchased Albertsons (or a significant part thereof), Amazon needs to divest WFM. In addition to being in markets that Albertsons has no distribution network to (including overseas), most of the divisions have an upscale format already (Haggen, Balducci's, Andronico's, etc.). The best course of action would be to try to take some of the larger stores in or adjacent to existing market areas and offload the rest, thus avoiding any problems about how they'll manage the chain, as well as any FTC issues. Moving the larger stores to Albertsons also means less burden for WFM's new owners...and of course, there would be the Amazon Fresh stores and leases to deal with.

[ClownLoach]

Kroger/Albertsons seems more predicated on the Amazon Fresh expansion (remember, this was supposed to be some sort of game-changer, much like how Amazon Go was supposed to open hundreds of stores) than the other way around.



I have considered the possibility of Amazon either buying or investing in Albertsons after the merger falls through.

The problem would be how much of Amazon rubs off on Albertsons. If it's just to keep investors happy, give some bump to the Albertsons return counters, and a growth vehicle for the company, it's fine, but Amazon destroyed Whole Foods with its own policies and that could be bad for Albertsons when it comes to the fresh food departments. Or it could help...either way, there needs to be some sort of corporate separation due to the unions in Albertsons.

The big question is Whole Foods Market and its integration into Albertsons. In a way their business is obsolete as so much has changed since the 1990s when they were growing, but their wholly unique brand, their international expansion...it seems like it would be a poor fit; the only way I could see it working is if Albertsons (or whoever) does a massive purge/conversion of stores to bring it back to its original intention with only a few stores per metro area.

I am not convinced that the destruction of WFM was entirely at the hands of Amazon. They were already deep into implementing profit maximizing cutbacks, staffing changes, standardization, consolidated sourcing, and new technology before Amazon had even finished the acquisition. They had all of the so-called experts in on multi-million dollar consulting deals, like Accenture and AlixPartners, writing new procedures and staffing models etc. before the company was put for sale. They had all of that in the works due to the activist investor problems (Jana Funds and others), and it wasn't enough to appease them due to the long time lines so they wound up selling. People were complaining about inferior quality national contract sourced produce replacing local growers, standardized recipes at food bars and restaurants, and mass culling or removal of specialty perimeter dining venues that had already happened by the day of the ownership change... They were complaining that Amazon overnight had destroyed the company. And worse, they failed to provide enough information about why these changes were being made so that the employees could understand the reason why they couldn't order as much as they wanted, had to set planograms for the first time, etc. so once again when all these changes were being implemented at the same time the ownership change happened the employees also thought Amazon was responsible. But it isn't reality. Aside from Amazon lockers and return desks, I am not convinced that Whole Foods would look any different than it does today if they hadn't acquired it.

Where Amazon does NOT get a pass in my book is their failure to correct these problems. They saw and heard the negative customer and employee reaction to the WFM changes, but ignored them. They could have course corrected but chose not to.

But WFM management was running around swinging chainsaws everywhere they could to cut costs, and Amazon chose to ignore it, so I guess from that perspective it's their fault? Amazon has demonstrated that they really don't know much of anything about grocery aside from data mining; remember that they hired away a ton of Target people and basically picked their brains to build out Fresh. They obviously picked the wrong people since Target did a terrible job with foods, and now ironically we are seeing sparks of life in foods at Target for the first time in decades as new management has been installed. So I really have to question if Amazon is responsible for much of anything at WFM aside from the technology and delivery piece.

I would imagine that if somehow Albertsons was acquired by Amazon and merged in, that they would most likely let the Albertsons management take over the WFM and Fresh business entirely. I do think they would consider some format changes which could be problematic due to unions (like flipping some or all Pavilions into WFM, as well as converting some WFM to an Albertsons format). But in general I would expect Amazon would lay down some very limited expectations, add lockers and return desk, Prime discounts somewhere, and eventually integrate Flex employees and the Amazon app for pickup and delivery. Aside from that I think they would give Albertsons free reign and order them to fix the problems that customers perceive with today's WFM store, and I think they have the experience to do so.

If Amazon purchased Albertsons (or a significant part thereof), Amazon needs to divest WFM. In addition to being in markets that Albertsons has no distribution network to (including overseas), most of the divisions have an upscale format already (Haggen, Balducci's, Andronico's, etc.). The best course of action would be to try to take some of the larger stores in or adjacent to existing market areas and offload the rest, thus avoiding any problems about how they'll manage the chain, as well as any FTC issues. Moving the larger stores to Albertsons also means less burden for WFM's new owners...and of course, there would be the Amazon Fresh stores and leases to deal with.

I would prefer to just see Amazon sell WFM with Fresh to ACI.

[marketreportblog]

I think this is the forum to post this:
Amazon Fresh Ditches "Just Walk Out"

Feels like this might be a result of the integration with Whole Foods -- but it strikes me as a major announcement of defeat without actually closing the stores.

[ClownLoach]

I think this is the forum to post this:
Amazon Fresh Ditches "Just Walk Out"

Feels like this might be a result of the integration with Whole Foods -- but it strikes me as a major announcement of defeat without actually closing the stores.

The impression I have had from the beginning is that the stores without Just Walk Out are much busier than the stores with it.

They did a terrible job of explaining the technology, the fact you don't have to use it, and then they had the gates blocking entry which are a psychological barrier to the customer. I saw many people walk in, see the gates, assume that this was a party they didn't get an invite for, and leave. They never even saw the store, just the barricades saying "you can't shop here if you can't figure it out."

It didn't work, and I am amazed at the fact that the very few stores they operated required a crew of over 1,000 people in India to watch the video and decide manually how to charge the customer.

On top of that, it was prone to shrink. We received nearly $100 worth of free groceries with it, and were overcharged on other occasions. Neither of which we knew about until the next day due to the long process to get a receipt.

And it required strange pricing, such as salad bars priced by container instead of weight and produce/meat by the unit. I saw people cheating the system with salad containers overflowing and taking all the meat off the salad bar.

All of this sounds like good change. The rumor that the Fresh organization has been merged into WFM seems to be growing legs. Maybe they'll relaunch the stores with the 365 brand again, as Fresh is actually a better overall store design than the oddball CVS-like WFM365 concept that failed.

Next they need to fix the pricing issues... They cannot operate with inflated shelf prices that deter any customer who walks in without a coupon, and they need to wean the customers who have gotten used to only shopping with a coupon. The shelf price should not be inflated to subsidize delivery prices.

[storewanderer]

It didn't work, and I am amazed at the fact that the very few stores they operated required a crew of over 1,000 people in India to watch the video and decide manually how to charge the customer.

On top of that, it was prone to shrink. We received nearly $100 worth of free groceries with it, and were overcharged on other occasions. Neither of which we knew about until the next day due to the long process to get a receipt.

All of the PR made it sound like this was some kind of incredible automated process where the cameras somehow knew exactly what you were taking and ran a tally up and would email you a receipt/charge you as you walked out the door.

When did this come out that they had a crew of 1,000 people in India manually watching the cameras trying to figure out how to charge you? No wonder it took so long to get a receipt and there were so many errors.

This wasn't technology at all. This was just flat out stupid. Anyone could have set up a store with cameras everywhere and a giant room of people watching the monitor and trying to tally up your purchases...

[ClownLoach]

It didn't work, and I am amazed at the fact that the very few stores they operated required a crew of over 1,000 people in India to watch the video and decide manually how to charge the customer.

On top of that, it was prone to shrink. We received nearly $100 worth of free groceries with it, and were overcharged on other occasions. Neither of which we knew about until the next day due to the long process to get a receipt.

All of the PR made it sound like this was some kind of incredible automated process where the cameras somehow knew exactly what you were taking and ran a tally up and would email you a receipt/charge you as you walked out the door.

When did this come out that they had a crew of 1,000 people in India manually watching the cameras trying to figure out how to charge you? No wonder it took so long to get a receipt and there were so many errors.

This wasn't technology at all. This was just flat out stupid. Anyone could have set up a store with cameras everywhere and a giant room of people watching the monitor and trying to tally up your purchases...

https://gizmodo.com/amazon-reportedly-d ... 1851381116

1,000 plus people in India. Probably more people working there watching 3 second videos trying to decide if you bought Heinz or Del Monte ketchup than they had left in the stores themselves.

Amazon expected the systems and AI to get it right 95% of the time. Instead allegedly the failure rate requiring manual review in India was 70%.

[storewanderer]

It didn't work, and I am amazed at the fact that the very few stores they operated required a crew of over 1,000 people in India to watch the video and decide manually how to charge the customer.

On top of that, it was prone to shrink. We received nearly $100 worth of free groceries with it, and were overcharged on other occasions. Neither of which we knew about until the next day due to the long process to get a receipt.

All of the PR made it sound like this was some kind of incredible automated process where the cameras somehow knew exactly what you were taking and ran a tally up and would email you a receipt/charge you as you walked out the door.

When did this come out that they had a crew of 1,000 people in India manually watching the cameras trying to figure out how to charge you? No wonder it took so long to get a receipt and there were so many errors.

This wasn't technology at all. This was just flat out stupid. Anyone could have set up a store with cameras everywhere and a giant room of people watching the monitor and trying to tally up your purchases...

https://gizmodo.com/amazon-reportedly-d ... 1851381116

1,000 plus people in India. Probably more people working there watching 3 second videos trying to decide if you bought Heinz or Del Monte ketchup than they had left in the stores themselves.

Amazon expected the systems and AI to get it right 95% of the time. Instead allegedly the failure rate requiring manual review in India was 70%.

What a total and complete scam.

I'd love to know more about that camp resort Dollar General who uses a different "Just Walk Out" technology that nobody has ever heard of and find out how exactly it works.

[ClownLoach]

All of the PR made it sound like this was some kind of incredible automated process where the cameras somehow knew exactly what you were taking and ran a tally up and would email you a receipt/charge you as you walked out the door.

When did this come out that they had a crew of 1,000 people in India manually watching the cameras trying to figure out how to charge you? No wonder it took so long to get a receipt and there were so many errors.

This wasn't technology at all. This was just flat out stupid. Anyone could have set up a store with cameras everywhere and a giant room of people watching the monitor and trying to tally up your purchases...

https://gizmodo.com/amazon-reportedly-d ... 1851381116

1,000 plus people in India. Probably more people working there watching 3 second videos trying to decide if you bought Heinz or Del Monte ketchup than they had left in the stores themselves.

Amazon expected the systems and AI to get it right 95% of the time. Instead allegedly the failure rate requiring manual review in India was 70%.

What a total and complete scam.

I'd love to know more about that camp resort Dollar General who uses a different "Just Walk Out" technology that nobody has ever heard of and find out how exactly it works.

I really wonder how much of the stock value has this fake technology baked into it. Shareholders should be pissed about this and the ongoing lack of transparency on fixing or killing Fresh.

[storewanderer]

https://gizmodo.com/amazon-reportedly-d ... 1851381116

1,000 plus people in India. Probably more people working there watching 3 second videos trying to decide if you bought Heinz or Del Monte ketchup than they had left in the stores themselves.

Amazon expected the systems and AI to get it right 95% of the time. Instead allegedly the failure rate requiring manual review in India was 70%.

What a total and complete scam.

I'd love to know more about that camp resort Dollar General who uses a different "Just Walk Out" technology that nobody has ever heard of and find out how exactly it works.

I really wonder how much of the stock value has this fake technology baked into it. Shareholders should be pissed about this and the ongoing lack of transparency on fixing or killing Fresh.

The analysts were falling over themselves about Just Walk Out being such a huge thing. This is a complete scam of a technology. This is useless. This isn't even technology. A group of kids in grade school could come up with this type of a plan to put cameras everywhere and have people watch the cameras and run up a tab as you shop. Someone could have come up with this type of "technology" 25 years ago.

What do you think the average customer would have thought if they knew "Just Walk Out" was being watched by 1,000 person team in a camera room somewhere (forget about saying where, even if it was in the back of the store)... the customers assumed this was automated technology. I would venture a guess the average customer would have been much less comfortable if they knew the process was not automated and some potential creep in a camera room was following them around the store with a camera, especially numerous cameras that point directly "down" at the customer and contents of their cart.

I have a better idea for their elementary school "Just Walk Out" system- put the camera ON the cart itself. Take a photo of all cart contents as they enter the card and tally them up that way. All those cameras overhead looking "straight down" on everything, strike me as a huge privacy issue among other things.