Smart move. Whole Foods has a limited appeal. It's not just price - sometimes people want to buy Cheetos or pizza rolls that don't taste like cardboard.

Slightly related thought: Why not design a store which allows instant fulfillment from a wide selection of goods while taking up less ground level space? I could see an Amazon/Walmart/etc store where you reserve the shelf space for presentation, but the goods are actually stored on higher floors and delivered to the customer upon checkout? Real-estate is a premium in many markets and probably keeps out super-center style stores. If you could build up, without having to extend retail niceties to all floors, you might make the costs work.

Yes, I imagine a store in which you just walk around and scan QR codes on your phone and your bagged groceries are waiting for you when you walk out (all paid for on the app, too, so no checkout).

How is that better? It saves you from... pushing a cart?

Not to mention, until robots can handle every variety of produce and package, isn't the real life manifestation basically going to be a sixteen year old dashing about in a mirror-store hidden in the back, tracing your footsteps, picking up the things you scan, and putting them in a cart?

A few reasons:

1. Potential for less waste through 1) people not avoiding ugly produce, 2) not leaving refrigerated stuff on a non-refrigerated shelf, 3) leaving freezer doors open, 4) stealing things.

2. Less congestion in the browsing section.

3. Better stock tracking.

4. Easier stock management. You don't have to have people move stock between a warehouse and a shelf.

5. And yes, you don't have to push a cart.

There are significant drawbacks too. The biggest one I can think of is that the fulfillment mechanism doesn't actually exist.

you forgot "instant checkout"

I doubt you would get that. You still have to wait for fulfillment. I guess at least you probably wouldn't be in a line.

I think this is what culture shock feels like. I truly struggle to imagine a people for whom being relieved of the great burden of pushing a grocery cart is actually a significant pro. Do these people even cook food?

Wrt 3 & 4, when you've practically got two whole stores, one with stocked product and one with QR codes, you're not saving space or stock management. (You're not going to go straight from shipping boxes to customer's hands)

It's certainly a lot easier and faster to walk around a crowded grocery store without a cart than with one.

No idea why you are conflating the desire to push a shopping cars with the ability to cook food..

It seems like someone who finds grocery shopping an insufferable hassle is going to feel the same way about spending an hour or two cooking dinner.

Maybe it's true, and carts are a great burden on many people. I've just not seen it myself, so I'm a bit flabbergasted. Especially since children can ride in carts.

Cooking is enjoyable. Pushing card in a crowded store is not. You either feel annoyed that you're blocked by someone's, or feel awkward that yours is blocking others. From that perspective not having carts is beneficial to the store as well, since customers now can enjoy lingering in the store longer.

It allows a store to open where it might not have been profitable or possible. It saves you money by allowing the retailer to lower prices.

Imagine being able to open a Walmart Supercenter in the middle of, say, San Francisco(like that would ever happen but anyway). They'd never be able to afford the real estate for a traditional supercenter, but they might be able to afford a super-tower.

That's a good plan.

But since the store size is 35000 sq.ft., they'll surely do something beyond that. But what ?

And they're going to build a lot of these stores, fast. They must. Or else, Walmart.

EDIT: Why so much space?

Sometimes you need stuff from the grocery today. Other times you can order online. Sometimes you need both.

This stores will serve both roles.

I'm really struggling to imagine a world in which this is preferable. Produce is the obvious example but it's much easier to consider what all I'm purchasing and what else I need to get when I can just look in my cart at what I already have.

I mean the checkout experience might be a little better but there are so many additional variables that come into play. Like are things going to be bagged well? I walk to the grocery store so it's important to me to get a good weight distribution between bags.

Idk this just seems like a solution to a problem that doesn't really exist.

Until people put things in their bag/cart that they didn't scan the code for, and you're not going to RFID tag an entire grocery store inventory that already has razor thin margins.

Supposedly Amazon's machine-vision store is solving this though.

I don't think the parent comment means people putting things in the bag. They just walk with phone, scan the items they want to buy which get added to bag automatically by robot/someone else and customer just walks to the counter at the end to pick up their bag.

I see, my bad. Still, why even walk around empty aisles full of food pictures then?

It seems like a strange UI for something that could just happen in the app before you even get to the store. Seems like a waste of space too since everything will be itemized and stored in the back on shelves as well.

I understand that user behavior doesn't turn on a dime but Amazon customers are already used to ordering online.

I'm saying have items for display to allow for browsing. You don't need shelf space for 24 boxes of cereal - you keep them upstairs. The aisles can be narrower(no carts, shallower shelves) and you still have the experience of browsing and getting people to make impulse decisions. It's like a hybrid between browsing Amazon and being in a real store.

How is that different from buying groceries online with in-store pickup?

> I could see an Amazon/Walmart/etc store where you reserve the shelf space for presentation, but the goods are actually stored on higher floors and delivered to the customer upon checkout?

let's you decouple storage location from presentation location. i assume the grocery store knows what items are most frequently purchased together, and ensures they're as far apart as possible in presentation-space. but in this model they could then keep them nearby in storage-space, making it easier for them to load your bag up.

(also the instant you walk in, they can probably figure out the things you're most likely to get, and move them to some staging area to go in your bag as soon as you scan it.)

That might work. I envision something close to Ikea (but in a much smaller footprint) where product collection is batched at the end of the store route. In fact, surely they (Ikea) have tossed this idea around. Probably encountered some roadblocks due to the size and weight of some of their furniture offerings. And how about insincere actors who just want to make some heavy furniture fly around the store?

Unclear how the batching section would be any different from just a grocery store. Grocery stores aren’t display heavy like furniture needs to be, and you can’t condense the packaging

Do we really need another grocery store chain though? Whole Foods cornered the high-end grocery market (or created it, if you want to debate).

Introducing yet another generic grocery chain to the already saturated, age-old red ocean market doesn't seem reasonable unless they're trying to create walk-up warehouses for online grocery delivery.

I welcome Amazon's attempt to bring changes to the existing grocery store market. Maybe they'll figure something out, or maybe they'll fail. Either way, I'm happy to have more options as a consumer.

>have more options as a consumer

Not if they succeed. The grocery market is only so large, and if Amazon pushes other other grocery chains, consumers now have less choice.

Argos in the UK works this way. It is slow.

Does your business 1) work in retail and 2) have more than 2% margin?

Then Amazon is coming for you.

@GSElevator: "If Amazon is in your line of business: Sell now. If Amazon is not in your line of business: Sell now; your business sucks"

https://twitter.com/gselevator/status/887023115288576000

This is clever.

So I'm curious, how is Amazon able to execute so effectively in so many different spaces? It would seem to me that any company endlessly extending itself into new markets is doomed to lose sight of its core competencies and eventually collapse under it's own weight.

And yet Amazon still grows, and keeps executing. How is this possible? Is the 6 page memo the magic sauce of sprawling corporate empire governance? Am I just not understanding some fundamental tenet of business?

They appear to have a strong focus on what customers actually want, hire bright people to figure out how to build it, are willing to gamble on some of it even if boss disagrees, make sure they keep whatever they build lean + scalable, use that to be profitable at scale on low margins, and tie stuff together as much as they can for higher satisfaction of customers and cross-selling them.

I'm not an Amazon guy or customer. Just guessing from what I read. I am pretty sure that lots of big businesses going cheap on or ignoring workers' advice, investing in expensive or inflexible systems, and pretending to listen to their customers contributes to their loss of market share to both startups with high customer focus + flexibility and pivoting behemoths like Amazon that emulate that.

Our experience of mega-companies over extending themselves and crumbling are from a different period. Maybe.

And not all of them crumbled. Walmart did great.

But today we have A/B testing, Platform reuse for other business line(Cloud, site, Warehouses, trucks, etc), more predictable supply chains(ML), scary marketing techniques, small flat teams augmented by powerful tools, generous funding from the stock market, etc.

Now Amazon has it all. Their competitors ? not so much.

Like other sprawling corporations of the past- GE, Sony, Panasonic, IBM, etc- they can sustain losses in a space for years, maybe even decades if they think it will pay off eventually, on the strength of their other businesses. Not needing to make a profit is a powerful position to be in.

I'm actually cautiously optomistic for some stores. For example, I still go to Target since I want to see clothes before I buy them. And their store card gives you free 2 day shipping with no BS "membership fee".

I could see AMZN taking a huge dive if the economy slows down. Think about it - a lot of people will be looking for things to cut and that Prime membership may be the first to go.

I use a lot of in store pickup and free shipping offers from Walmart, Target, and Best Buy. Usually the prices are better too, until someone gets Amazon to price match. But I don't know why anyone would pay for Prime.

Eh, it's getting much easier to order online, try it on, and ship returns. After getting frustrated with stores not having the size of the item I wanted in stock, I started ordering online from specialty sites and haven't looked back.

The only problem is time though - it can take a couple weeks to do this.

I think the average Whole Foods has plenty of wasted space and that they could easily start to carry products that the average consumer has to go to a normal grocery/convenience store to buy (liquor, snacks, candy, soda, beauty etc). I don't think it will diminish from the experience. Plenty of higher end grocery stores do the same, even with a smaller footprint.

I would guess the perceived gap is also popular processed foods that would hurt the Whole Foods brand if they carried it.

> I would guess the perceived gap is also popular processed foods that would hurt the Whole Foods brand if they carried it.

I used to think this, but Whole Foods sure has a lot more problem with the 'popular' part than with the 'processed' part. If you actually look at the nutritional content of some of their products, it's pretty dire. (Not so much for processed food, but my wife noticed the other day that one of their cake slices, for one slice of cake, had 1100 calories and 100 grams of sugar.)

Yes, that makes sense. It's less about healthy and more about not having obvious things like Cheetos on the shelves.

Whole Foods already carries all that stuff.

Only a handful have hard liquor in California and with limited selection. None carry any big multinational brands and products like Coca Cola, Procter&Gamble, Colgate/Palmolive, etc.

In my experience, comparing organic food at whole foods vs elsewhere whole foods is similar price and sometimes the better deal. However, the conventional stuff they have (that makes up a large portion of the food they sell) seems to always be more expensive than elsewhere. I'm guessing the idea of avoiding the same exact brands is to make it a bit harder for customers to notice how much more expensive that stuff is at whole foods or at least think maybe the quality might be a bit better.

Last time I went to WF I went just for cold medicine (OTC robitussin, etc) they didn't have anything but more "natural" options. It was probably a year ago. Color me dumb, I usually shop at HEB but the WF was on the way. That really surprised me. Pretty sure I left empty handed.

HEB is far superior to anything we have in California.

They do, but they don’t carry the mainstream versions of things: GUS soda instead of Coke/Pepsi. Cape Cod snacks instead of Doritoes.

The thing I hate is they don’t carry regular Aspirin or Tylenol, Nyquil (your usual and basic over the counter medicines) instead they carry ‘homeopathic’ whatever useless ‘natural’ ‘medicines’ & ‘supplements’

Those aisles along with clothing are really the most useless ones in the stores I've been to. Can't imagine people really buy that stuff.

Amazon has a big opportunity there as well. They've just started their vitamin Solimo brand which is actually decent, and private-labelling generic drugs is just easy money for most retailers.

The fact they sell and promote that garbage is far more telling of their corporate values than avoiding HFCS, IMHO.

There’s probably quite a bit of overlap between people who buy placebos and are into the organic/nonGMO marketing.

Whole Foods doesn't carry liquor in any place I've ever lived.

The ~4 I've been to in SF all carry some liquor (usually a small end cap with 1-2 options of each variety). Maybe it's a regional thing?

That may be due to local laws. In the places I've lived (MN and OR) no grocery stores are allowed to carry liquor.

Why test when you can A|B test?