I appreciate the fact that my posts and articles are read and shared across Amazon. Thank you to everyone at Amazon who shares six-pagers, photos and diagrams of store mockups, and other information related to Amazon’s grocery strategy. I enjoy our conversations.
There are lots of ideas and discussions regarding grocery. I appreciate the creative store formats and the focus on technology. For example, Amazon’s newest Amazon Fresh store in Woodland Hills, CA, has incorporated “dash carts,” a shopping cart with a computer screen designed to show customers a grocery list of the items they need, and Amazon Echo Show devices, to help shoppers navigate the store and find items. Amazon has other technology they’re testing as well.
I’m concerned that the Amazon Echo technology touted by Amazon, pales in comparison with the GEO system that 345 Global and its founder Mark Edwards have created. Amazon has a solid team developing their software. However, Mark and his team have created something extraordinary. Claire Peters, Peter Bowrey, Tony Hoggett, Doug Herrington, Adam Selipsky and Andy Jassy, should meet with Mark and his team to review 345 Global’s platform. It may prove valuable to Amazon.
I compliment the executive team at Amazon for embracing the importance of physical stores. However, the store designs Amazon is considering, including combined apparel, groceries, technology, design studios, and so on, are the wrong approach.
The Amazon Fresh brand is ideal for India but not the U.S. The only way I believe Amazon Fresh can succeed in the USA is if Amazon rebrands Whole Foods to Amazon Fresh, and introduces Amazon Fresh+ stores that sell branded CPG products like Coke, Pepsi, Tide and so on. Rebranding Amazon Fresh to Whole Foods+ is a possibility.
If Amazon can’t scale Amazon Fresh or another grocery retail format, acquiring Dollar General, Target, Ahold Delhaize or Costco Wholesale is worth assessing.
To win the grocery war, Amazon will need more than stores, however. I believe Amazon will have to introduce a new model for how Americans eat at home. Imagine being able to receive fully cooked meals at a price point cheaper than buying groceries and cooking meals at home. I’m not referring to meal kits. I’m referring to something new, different and exciting. Something that will generate demand and disrupt the grocery industry.
Groceries are an $800B opportunity for Amazon. However, Amazon can’t simply be just another grocery retailer. Some of Amazon’s grocery competitors have been in business for over 100 years. Amazon can’t play their game and win. Amazon has to create a new game.
Amazon is an ecosystem. Within the ecosystem are customers with different needs; groceries for example. I’m confident that Amazon can design and implement the optimal grocery and food strategy for its ecosystem that will also attract new customers and increase market share.
