Amazon and the new “High-end Grocery”

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In Breif

Amazon กำลังจะก้าวเข้ามาเป็นยักษ์ใหญ่ในวงการอาหารระดับ “High-end” ด้วย Amazon Whole Foods

และหากสามารถพัฒนากระบวนการด้านโลจิสติกส์ได้อย่างเต็มรูปแบบแล้วละก็

Amazon จะ “interrupt” อุตสาหกรรมต่างๆของโลกอย่างแน่นอน”
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Amazon currently has 3 strongholds: Amazon Web Services (AWS), Amazon Prime Membership and the Amazon Marketplace, itself, the first being a comprehensive evolving cloud computing platform that makes everything else happen. The e-commerce king has been looking around for a 4th stronghold to expand its retail footprint and it looks like a primary catch has been found. One that would further distinquish Amazon as the high end provider compared to competitors, such as Walmart, that are currently munched under the same mass market category. Whole Foods Market Inc. is a prominent American chain grocer that focuses exclusively on providing National Organic Program standard health products, i.e., minus artificial preservatives, colors, flavors, sweeteners and hydrogenated fats. Announcement of the Whole Foods deal is strategically timed to coincide that of JD.com’s declaration to revolutionize the industry and dominate with tech. That, after the Chinese giant agreed to invest $171 million in software developer, Kingdee. JD.com already beat Amazon to the punch on drones with applications in rural area last mile delivery to access territories with limited road and transport-ability. Walmart, on the other hand, recently took over one of the hottest high-end men’s retailers, Bonobos, for $310 million in cash, of which generates between $100 million and $150 million in annual revenue from appeals to young urban shoppers with slim-fit apparels. Bonobos generates most of the sales online, along with a handful of physical stores in major cities.

Since Amazon’s own grocery endeavor, AmazonFresh, hasn’t entirely been a blockbuster yet, the $13.7 billion move on Whole Foods offers to not only get the giant’s foot in the door, once and for all, of one of the largest industries according to growth potential in the next two decades as population multiply and flux to suburban living, but to dominate it as well. For Amazon to make a move there has to be 4 birds for one stone, As with the 10 Amazon Books brick and mortar bookstores and more on the way, the second bird is realized with a familiar sales technique. For some physical products, the customer’s sensation is best enhanced through the five senses, or the faculties of sight, smell, hearing, taste, and touch. Thus, a presence that best animate sensations and convenience to buy, the one facet that is off limits from the matrix that only good oldschool retail showrooms can reach. Next, also derives from an old school tactic with retail fronts that serve as a distribution centers for online orders, as well. Strategic locationing, for that matter, must be a key component to optimize last mile delivery by allowing the most effective itineraries possible for the not so glamorous logistics that come with hurling Same Day – Same Hour deliveries back and forth across congested suburban maps. Thus, it’s back to the classic mantra that worked wonders for real estate gurus in the 1900s and later on for Amazon’s Fulfillment Centers all over again: “Location Location Location” according to operational distance.

Then, potentially, could be a new rare stage that is suitable for Amazon’s cutting edge technological gadgets to add a magical touch that outshines differentiation itself, namely, Amazon Echo, Amazon Prime Now (App) and Amazon Dash Buttons. For example, Amazon Dash Buttons are WiFi connected small plastic tags that can be used on site to depict each product on the shelf. It is expected to be applied in conjunction with the Prime Now App to allow customers to check out and have items delivered straight to their home without having to go through the cashier or carry large grocery bags to the car – a major benefactor to shoppers that don’t fancy getting in long lines with long grocery checkout processes starting from greeting, answering inquiries, scanning items, bagging groceries, and reconciling receipts with cash or credit, the latter of which often experiences systematic glitches where the store manager double times over to reset the process in untimely manners. Prime Now is currently exclusive for Amazon Prime Members with a free 2-hour delivery and $7.99 for one-hour deliveries.

A Swedish IT specialist opened the world’s first unmanned retail store a couple years back that operates 24-7 with practically no employees around to handle security and cashier using a mobile App for entrance to the store, scanning products for checkout right where they are on the shelf with no cashier requirement and exits. The store, however, carries relatively inexpensive grocery items only. Amazon’s Whole Foods would be the first to deploy a no checkout concept on a mass scale. And it’s bad news for store cashiers as well as other floor employees and their fight for wage increase to $15 per hour. The deal is good news, on the other hand, for Tech savvy nomads looking to come on board

The additional Whole Foods network is expected to serve as a key channel to opening new competitive doors. Imagine, adding a “Free Save-Earth deliveries” slogan to the already attractive deals that captures Green conscious segments as well. An entry can easily tip the scale over to dominance in, yet, another retail essencial arena – transportation, with a dash of luxury. Taking a look at the 3 key IoT grids, i.e., the optimization and amalgamation of communication, energy and logistics, adding Amazon Robotics’s KIVA Systems and AWS capacities to the picture and the fifth bird for Amazon can be a big slice of the IoT pie itself. If so, next to follow according to the professor should be a zero, or close to zero, marginal cost collaborative societies. Let’s see how that pans out around 2030 where most nations face the due date for COP21 terms and conditions. A lot of automated vehicles should be roaming the streets by then. For now, Innovation plus Lean and Green spells a redefinition of Luxury. The Wholefoods deal is poised to disrupt a host of industries in a profound way.

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Reference and pictures by  techcrunch.com, forbes.com, pexels.com

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