This is more or less what Amazon is known for - experimentation, A/B testing and dumping ideas quickly.
I'm pretty in awe that Amazon seems to have (at least) three bricks and mortar retail concepts on the go at the same time : Go, pop up stores and Whole Foods, and is only now deciding to cut one of them. Amazon's commitment to going with the data goes so so deep.
I think Amazon doesn't need those pop-up stores now as much since they could easily use Whole Foods stores to display and sell their hardware devices. They also have other options as well to sell devices such as their Amazon Books physical stores.
What about Amazon makes it successful with having multiple versions of the same concept at one time compared to Google's* lack of success doing the same?
*At least my impression of Google and their structure/incentive system that pushes different groups to pursue the same thing and not succeed at any. Messaging is at the forefront in my mind.
That's an interesting question, imo. Google is (was?) also very well known for (A) making decisions with data and (B) letting flowers bloom, fail, and moving on.
You could describe both with the same shorthand cliches, but they're obviously very different.
I think the difference is how intentional they are. In this case, they want to do physical retail. They have certain ideas about what meaningful wins they can achieve in retail. What they're "testing" are, in a very broad sense, implimentation details and approaches. They are intent ona destination, but very expiremental about the route.
Google is/was either more "blue sky." They "expirement" more like a VC or incubator expirements. It's more about making likely betys than finding a way to do X. Anything that seems promising is worth a go. They have certain areas (ML, web/mobile platorms) that they invest particularly heavily in, similar to a VC's specific health-tech or ed-tech funds, but the destination is blue sky... "change the world and make billions with ML."
I would say amazon does it more like a startup, and Google is more like a startup investor.
BTW, sometimes one works and sometimes the other works. Google (mostly via android) had far more success in mobile devices/OSs, even though both attempted it.
I think you have to give the edge to amazon though. They managed to build a new business that was better than the old one. Google still makes all its money fom search+ads and supporting stuff. Even their big product successes (android, chrome, drive/docs, maps, etc.) are not money spinners. They arguably support the search+ads business, but nothing is in the same league as aws.
What surprises me about the Google attitude is that it seems to go against one of the basic rules of entrepreneurship: that it's the execution that counts, not the idea. In other words Google seems to throw multiple ideas hoping for some to be successful, but doesn't really seem to put an effort to push them forward despite the initial difficulties. It's a fundamentally insecure attitude: they hope to be blown by the success of something rather than working hard to make it succeed.
I think it comes down to how they handle success at a smaller scale and tend to prioritize for their higher value experiments. I think the better example, on the other side of Google would be Apple, where almost all priority is in the Phone first, Tablet second, everything else after.
For google, you have one line of business than generates billions in revenue and another that generates a few million in profit, in the larger company, it's not likely to gain traction, where in another company it might be larger than the rest of the company.
I saw in WSJ that Amazon is planning to open an all-new "cheaper than Whole Foods" grocery-store business with the first store in Los Angeles to open by year-end.
Can't speak for anyone else, but hopefully they will not mess with Whole Foods much. They picked up some baggage with that one, and if they drastically changed things ... to put it in their language this would not be a Type 2 decision.
They have ruined Whole Foods. Anecdata: the local store is now filthy, filled with unhappy employees, and no longer carries a broad selection of items. But hey, bananas are cheaper. The "customers" are mostly local delivery services now.
> Amazon also assured landlords that its decision to close pop-up stores wasn’t a sign that it is pulling back from its expansion into bricks-and-mortar retail, one landlord said.
> “The pop-up stores were designed to ascertain demand, and Amazon can leverage that data for prototypes of other stores,” said Mr. Charles Lanier, director of real estate at Plaza Associates Inc., a private commercial-property landlord that operates Crabtree Valley Mall in Raleigh, N.C., which contains an Amazon pop-up.
> Amazon is innovating at a fast pace, he said, adding, “We’re big fans of the brand.”
Note that they are only shutting down pop-up stores that feature (it sounds like) all Amazon products like Kindle, etc. NOT their cashierless "Go" stores. It sounds like they figured out that dedicated physical locations for Amazon products don't make sense like it does for Apple, etc.
Amazon devices aren't premium. In fact, they're more the opposite.
People are less excited to come and play with them because they're (for many people) easily affordable unlike Apple products where a try before you part with a lot of money is a bigger 'thing'.
> Amazon is expanding its bookstores as well as its so-called 4-star stores
So this is more of a doubling down rather than failure of brick-and-mortar retail for Amazon. I'm guessing they want to offer an Apple-like retail experience versus renting out tiny corners of existing stores like they do right now.
I must have done half my Xmas shopping in the local 4 Star store, so I'm glad they are sticking with that concept. A well curated set of good gifts you can see IRL is a valuable thing.
I think that since most lower priced groceries are not located in premium retail spots, they can partially use the business as a warehouse, cutting down on cost while allowing them to be more competitive.
The purchase of Whole Foods seems to have benefited Amazon's grocery logistics, added pressure to competitors wanting to enter the online retail from brick-n-mortar sector, allows them to use the b-n-m to serve as warehouse and increases brand recognition
This is an example of US economic dynamism. In France or even the UK people would be saying, "How can we let such a large, profitable company lay off people so easily?"
You can't extol the virtues without considering the social cost in the US: "How can we make sure labor laws and social welfare systems don't become as tragic as those in the US?"
> This is an example of US economic dynamism. In France or even the UK people would be saying, "How can we let such a large, profitable company lay off people so easily?"
Try to get a loan from a bank or rent an apartment in France without a serious salary/long term employment contract. That's also the difference between US and these countries. Come back here when French people have easier access to cheap credit like in US. French banks don't like to take risks. What people say is irrelevant.
Ah, so they are shutting these down but adding new 4-star stores and more Amazon Go stores. I guess the real takeaway is that those stores were performing better?
It is interesting to see them doing A-B testing at this level. I'm sure it happens regularly with other retailers, too, though.
> ... adding new 4-star stores and more Amazon Go stores. . I guess the real takeaway is that those stores were performing better?
Not sure why they'd then terminate employment and offer severance to people working for them in those stores. The key takeaway could be that these pop-up stores didn't result in tangible benefit to their bottom-line?
I think it was offered as an alternative for people who felt weird about breaking the paywall but don't mind reporting that uses the paywalled article as a source.
I like the moves all of these brick and mortar stores are making online. Walmart, etc. They are slowly but surely catching up, so much so that I this Amazon dominating everything is not guaranteed. Walmart and other brick and mortar stores might develop strategies to effectively compete... which will be great for consumers to be able to get everything online delivered or store pickup... with lots of deals offered. That all seems positive. Amazon dominating to me seems like a negative.
Walmart in particular seems well-positioned to pivot to competing with Amazon in retail in the US. They maintain what are essentially warehouse facilities within a short drive of a huge percentage of the population. Outcompeting Amazon in terms of a pleasant and trust-building web-shopping experience should be achievable--Amazon's UX has been getting worse over time, and achieving truly fast delivery outside of huge urban areas should be more possible for Walmart than anyone else. That said, I don't think Walmart is ready to be anywhere near bold enough to transform their assets into a true Amazon competitor because it would necessarily involve taking big risks and scaling back on the formula that has gotten them to where they are.
So I'm not hopeful, but I keep thinking someday some new CEO might just make it happen.
I’ve commented on this several times, but Walmart’s online grocery pickup app is coming along nicely. They’re doing a push to hire developers and the improvements show in the app.
You originally had to call a phone number but now you say you’re on your way and it notifies the workers to come out and put your groceries in the trunk. My wife hates going inside Walmart’s so we’d use the smaller more expensive grocery stores, but with online pickup she stores her favorite items, adds them to a cart with a $30 minimum, and picks them up the next morning. It’s super convenient and we love it. I’d be hard pressed to see how Amazon could improve upon it, honestly.
Walmart is probably better positioned than anyone else in the US market to do so. It's worth noting that the current CEO is relatively "new" (he's been in the role only 5 years and is only 52 years old - a next generation of leader compared to his predecessors).
He is being very proactive in building out things like online grocery, investing heavily in e-commerce (recent public results showing strong outcomes) and lots of targeted M&A related to digitally native brands to broaden the accessible customer segments, spending billions of dollars to remake / refresh the 5,000 stores, etc.
<disclaimer: currently work at a subsidiary of Walmart, immediately previously worked at Amazon>
I think Walmart is doing a great job with their online presence of late and I've seen articles about local delivery experiments they were performing. There was an article on HN some time back about Walmart basically paying their employees to deliver packages on their way home from work. It got a lot of negative feedback, but it's clear they're willing to experiment and try new ideas. They've also introduced some really great free shipping policies which compete well with Prime, but don't require a subscription fee.
More and more frequently, Walmart online prices for the same items are comparable or even better than Amazon. Nowadays I search there first and generally prefer it.
Very good points. I concur. WalMart's website is very poorly designed compared to amazon, but they generally have the same goods at the same price. WalMart will offer free ship-to-store that I can get faster than waiting for amazon free shipping, and critically, WalMart allows no-hassle returns of internet purchases at the local return counter. Amazon's return policy is good, but it's more of a hassle to deal with boxing, labeling, and shipping than just dropping off. And of course while I'm at a WalMart I'll grab other things as well, which doesn't happen at the UPS counter. So I assume others have had the same experience and that WalMart share of the online market will continue to grow, particularly if they can move their website to the same experience that amazon provides (a steep task). Their logistics and warehousing backend appears to be at least as good as Amazon's, possibly better, though that's an inference from just observing the customer end of it and not based on inside knowledge.
All good points. I think that Amazon sees this issue and working with retailers (Kohls) to set up locations that you can drop items without having to deal with the boxing, shipping etc.
It will be interesting to see how to two bridge the gaps from opposite sides. Amazon moving from online to physical | Walmart moving from physical to online
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I'm pretty in awe that Amazon seems to have (at least) three bricks and mortar retail concepts on the go at the same time : Go, pop up stores and Whole Foods, and is only now deciding to cut one of them. Amazon's commitment to going with the data goes so so deep.
*At least my impression of Google and their structure/incentive system that pushes different groups to pursue the same thing and not succeed at any. Messaging is at the forefront in my mind.
Google is infamous for this sequence of events, time and time again:
1. We made this great new thing that's gonna change the way you verb! Hope you enjoy it!
2. (1-5 years of product stagnation)
3. Hey, thanks for the all the good times. We're closing the thing at the end of the year.
Amazon (for all their warts) is much more adept at keeping customer experience in their crosshairs.
You could describe both with the same shorthand cliches, but they're obviously very different.
I think the difference is how intentional they are. In this case, they want to do physical retail. They have certain ideas about what meaningful wins they can achieve in retail. What they're "testing" are, in a very broad sense, implimentation details and approaches. They are intent ona destination, but very expiremental about the route.
Google is/was either more "blue sky." They "expirement" more like a VC or incubator expirements. It's more about making likely betys than finding a way to do X. Anything that seems promising is worth a go. They have certain areas (ML, web/mobile platorms) that they invest particularly heavily in, similar to a VC's specific health-tech or ed-tech funds, but the destination is blue sky... "change the world and make billions with ML."
I would say amazon does it more like a startup, and Google is more like a startup investor.
BTW, sometimes one works and sometimes the other works. Google (mostly via android) had far more success in mobile devices/OSs, even though both attempted it.
I think you have to give the edge to amazon though. They managed to build a new business that was better than the old one. Google still makes all its money fom search+ads and supporting stuff. Even their big product successes (android, chrome, drive/docs, maps, etc.) are not money spinners. They arguably support the search+ads business, but nothing is in the same league as aws.
https://news.ycombinator.com/item?id=19286649
For google, you have one line of business than generates billions in revenue and another that generates a few million in profit, in the larger company, it's not likely to gain traction, where in another company it might be larger than the rest of the company.
https://www.wsj.com/articles/amazon-to-launch-new-grocery-st...
https://www.theguardian.com/us-news/2019/mar/06/whole-foods-...
> “The pop-up stores were designed to ascertain demand, and Amazon can leverage that data for prototypes of other stores,” said Mr. Charles Lanier, director of real estate at Plaza Associates Inc., a private commercial-property landlord that operates Crabtree Valley Mall in Raleigh, N.C., which contains an Amazon pop-up.
> Amazon is innovating at a fast pace, he said, adding, “We’re big fans of the brand.”
Deleted Comment
People are less excited to come and play with them because they're (for many people) easily affordable unlike Apple products where a try before you part with a lot of money is a bigger 'thing'.
I bought my parents an echo because they had them on sale at whole foods around christmas.
> Amazon is expanding its bookstores as well as its so-called 4-star stores
So this is more of a doubling down rather than failure of brick-and-mortar retail for Amazon. I'm guessing they want to offer an Apple-like retail experience versus renting out tiny corners of existing stores like they do right now.
The purchase of Whole Foods seems to have benefited Amazon's grocery logistics, added pressure to competitors wanting to enter the online retail from brick-n-mortar sector, allows them to use the b-n-m to serve as warehouse and increases brand recognition
Try to get a loan from a bank or rent an apartment in France without a serious salary/long term employment contract. That's also the difference between US and these countries. Come back here when French people have easier access to cheap credit like in US. French banks don't like to take risks. What people say is irrelevant.
Deleted Comment
It is interesting to see them doing A-B testing at this level. I'm sure it happens regularly with other retailers, too, though.
Not sure why they'd then terminate employment and offer severance to people working for them in those stores. The key takeaway could be that these pop-up stores didn't result in tangible benefit to their bottom-line?
> The move was first reported by The Wall Street Journal.
So I'm not hopeful, but I keep thinking someday some new CEO might just make it happen.
You originally had to call a phone number but now you say you’re on your way and it notifies the workers to come out and put your groceries in the trunk. My wife hates going inside Walmart’s so we’d use the smaller more expensive grocery stores, but with online pickup she stores her favorite items, adds them to a cart with a $30 minimum, and picks them up the next morning. It’s super convenient and we love it. I’d be hard pressed to see how Amazon could improve upon it, honestly.
He is being very proactive in building out things like online grocery, investing heavily in e-commerce (recent public results showing strong outcomes) and lots of targeted M&A related to digitally native brands to broaden the accessible customer segments, spending billions of dollars to remake / refresh the 5,000 stores, etc.
<disclaimer: currently work at a subsidiary of Walmart, immediately previously worked at Amazon>
It will be interesting to see how to two bridge the gaps from opposite sides. Amazon moving from online to physical | Walmart moving from physical to online