Amazon buying Whole Foods

[cardsfansince82]

Now they're saying Walmart could buy Whole Foods, and Walmart also told its vendors to drop amazon cloud services.

THIS MEANS WAR

I have no idea what it actually means, but monopolies usually aren't great.

[ghostrunner]

Now they're saying Walmart could buy Whole Foods, and Walmart also told its vendors to drop amazon cloud services.

THIS MEANS WAR

I have no idea what it actually means, but monopolies usually aren't great.

Is there a monopoly?

[cardsfansince82]

It seems to be trending that way, or I guess technically it would be a duopoly? Both of those companies have gotten so massive they can swallow up the rest of the entire retail sector. I don't know the legalities of this stuff, but I think telling your vendors what to do in a market segment where you don't even have a competing product is crossing a line. It's not hard to imagine a future where every single consumer product is exclusive to one or the other. Or maybe they both have it and collude on the price? Less options seems like a bad thing to me.

[thrill]

I have no idea what it actually means, but monopolies usually aren't great.

I think it means Wal Mart is trying to turn into Amazon through weird means like buying exclusive brands like Bonobos and using their wage slaves as prime-like delivery providers.

I guess they have to try, because Amazon is going to put them all out of business eventually if they don't.

[ghostrunner]

It seems to be trending that way, or I guess technically it would be a duopoly? Both of those companies have gotten so massive they can swallow up the rest of the entire retail sector. I don't know the legalities of this stuff, but I think telling your vendors what to do in a market segment where you don't even have a competing product is crossing a line. It's not hard to imagine a future where every single consumer product is exclusive to one or the other. Or maybe they both have it and collude on the price? Less options seems like a bad thing to me.

I'm asking because I'm not sure. Typically you think of a monopoly as cornering a product market. But Amazon is getting into everything. I'm curious if they're the leading seller in any one market. But I suppose if you become everyone's first thought, that is sort of a monopoly. I wonder if it fits any legal definition though.

It's surprising nobody has tried to duplicate their model. Overstock did for a time, but they stuck with physical goods. AliBaba is a similar competitor in Asia and elsewhere, but I have no idea if they're a real threat.

[TheoSqua]

Huh. I started an order with Shop N Save once before and didn't notice the prices being any higher. I'll have to check that out this weekend. I thought they even had sale items that matched the prices in their ads but maybe I'm wrong. It was a few months ago that I poked around on the website so my memory could be completely wrong.

IIRC the markup was on specific items. Like the bread was the same, then a six pack of beer was $9.

[tlombard]

Huh. I started an order with Shop N Save once before and didn't notice the prices being any higher. I'll have to check that out this weekend. I thought they even had sale items that matched the prices in their ads but maybe I'm wrong. It was a few months ago that I poked around on the website so my memory could be completely wrong.

IIRC the markup was on specific items. Like the bread was the same, then a six pack of beer was $9.

Nooo!!!!! Don't mark up my beer! I didn't think you could have booze delivered but I get the idea. And maybe you can get beer delivered. If so, I'm interested. I'll be scheduling beer deliveries to softball.

[cardsfansince82]

I'm curious if they're the leading seller in any one market. But I suppose if you become everyone's first thought, that is sort of a monopoly. I wonder if it fits any legal definition though.

It's surprising nobody has tried to duplicate their model. Overstock did for a time, but they stuck with physical goods. AliBaba is a similar competitor in Asia and elsewhere, but I have no idea if they're a real threat.

They dominate the book industry for sure. 40% of all book sales in the US. 65% of all physical copies sold online and 67% of all ebook sales. And they are gaining fast in a lot of other categories. Walmart will lose in the long run because so much of their value is tied up in physical stores. I'm not sure what a new competitor could offer that amazon doesn't already do better.

[AWvsCBsteeeerike3]

No surprise, but Amazon owns the online shopping market. Somewhat surprisingly is the total % of online sales done there. I'd have guessed over half.

But...

An analysis by Slice Intelligence released this week found that 43% of all online retail sales in the US went through Amazon in 2016, as the e-commerce giant’s market share continues to grow.

According to the study, which analyzed more than 4 million online purchases, Amazon accounted for the majority (53%) of the growth in US e-commerce sales for the year.

Simply put, Amazon’s already dominant share of the US e-commerce market is only increasing. It reportedly captured 33% of all US online purchases in 2015, according to Internet Retailer, up from 25% in 2012. If those estimates are correct, then the company increased its share of the US e-commerce market by 10% in 2016, an incredible accomplishment given that it already controlled such a sizeable chunk of the space.

http://www.businessinsider.com/amazon-a ... les-2017-2

In some ways it's fascinating to watch the Amazon/Walmart battle unfold. Walmart gets a massive physical presence advantage with 10k+ stores worldwide and Amazon gets a massive online gathering. Then they both start trying to chip away at the the others strengths. Wallyworld doing everything it can to expand it's e-commerce and Amazon opening B&M bookstores and buying Whole Foods.

In the end, I think Amazon wins simply because it's so easy for them to produce goods that Walmart can't. For instance, last I checked, you could sell almost any piece of [expletive] you wanted on Amazon relatively easily. Hey, want to make 20 birdhouses a month in your home and sell them? Amazon is probably a place worth checking out. That or etsy. Want to write a book and get it published right away? Amazon. Want to sell a scrub daddy before you go on shark tank? Amazon. Blah blah blah.

Walmart, otoh, still suffers from vendors having to convince buyers to buy their [expletive] to get in the store before they're sold online. That's a huge mountain to climb, even for successful companies, let alone weekend entrepreneurs. Apparently, the jet.com acquisition for $3B last year helped walmart kind of overcome that obstacle, but I'd still think it's easier to sell on amazon than walmart's platform.

That said, the outlook for walmart is not all bleak.

Walmart's (WMT, -0.90%) massive e-commerce investments are starting to pay off.
The discount chain reported on Thursday that U.S. online sales rose a staggering 63% in the first fiscal quarter of the year, following last year's overhaul of its online marketplace and a series of acquisitions of e-commerce companies since then, most notably its $3 billion purchase of Jet.com.
And more importantly, Walmart said comparable sales rose 1.4% at its U.S. stores, the 11th consecutive quarterly rise, and brought in more shoppers than a year earlier, in stark contrast to the traffic problems at rivals ranging from Target (TGT, +0.26%) to Macy's (M, +0.81%). Walmart has credited its efforts to integrate its store and digital businesses so that they feed off each other.

http://fortune.com/2017/05/18/walmart-online/

That said, it's not all or nothing. There will likely be room in the American economy for both for years to come. But, my bet would be on Amazon to eventually become the better company (it is already).

[tlombard]

Looks like Amazon has announced that as soon as the deal closes on Monday they are going to be lowering prices on the most popular staples with more price lowering to come.