What Did Amazon Do This Week? - 19-02-2023

AMAZON WANTS THE GROCERY MARKET BAD

Amidst a spray of pretty negative stories this week, including a return to work three days a week policy, the chonky FT profile on Andy Jassy got most tongues wagging. The rare interview was granted to the FT's big Silicon Valley writer, Dave Lee, was a deep dive on a lot of areas (generative AI etc) but dwelled on the grocery ambitions of Amazon.

In the piece, the pair discuss Amazon's ambitions, and Jassy says Amazon is ready to "go big" on physical stores (3.4 per cent of Amazon's business) with few details on what that means. The issues to date were blamed on a lack of "normalcy" during the pandemic, according to Jassy: "Remember, a lot of these opened right in the heart of the pandemic. So we haven't had a lot of normalcy. We're experimenting with selection, checkout formats, assortment, price points. I'm encouraged we have several that I think are promising."

Amazon has owned Whole Foods for five years, so the description of "early stages" raised a few eyebrows. While Amazon has accomplished during this time, the piece rightly highlights Amazon has still yet to make a dent in consumer minds, the market and how it will do both in the future. Time will tell if Amazon is holding its cards to its chest or if the company doesn't have a clear plan. 

SO WHAT?

Amazon has yet to convince customers to buy en mass in its stores. Customers who have been trained to know Amazon as the online everything store, and not the store around the corner. In this regard, Walmart and co have a leg up on Amazon. It's easy to go brick-and-mortar to online but much harder to go the other way. As the analyst quoted in the piece (Neil Saunders) says, Amazon can have great technology but few, for now at least, shops in stores for that reason alone.

WANT TO INNOVATE LIKE AMAZON? Order a copy of the second volume of ‘Disruptive Technologies’ now!