EP347- The Amazon Briefing, Pt 1

WEBVTT

00:00:01.300 --> 00:00:06.920
Welcome to the Jason and Scot Show, your source for the latest news and trends

00:00:06.920 --> 00:00:08.530
in the e-commerce industry.

00:00:08.640 --> 00:00:13.750
Featuring hosts Jason Retail Geek Goldberg, Chief Commerce Strategy Officer

00:00:13.750 --> 00:00:18.960
of Publicis, and Scot Wingo, Co-Founder and CEO of ReFiBuy.

00:00:19.280 --> 00:00:21.720
Here are Jason and Scot.

00:00:22.600 --> 00:00:25.720
Hey everybody, it is Scot from the Jason and Scot Podcast.

00:00:25.720 --> 00:00:29.540
One brief word before we jump into this week's episode.

00:00:30.130 --> 00:00:35.330
Jason and I were invited to an on-site Amazon analyst meeting in Seattle,

00:00:35.330 --> 00:00:37.549
live, with a whole group of executives.

00:00:37.990 --> 00:00:44.350
We covered Amazon Grocery, Amazon Prime, Alexa Plus, as well as what's going

00:00:44.350 --> 00:00:46.540
on with Amazon Prime Air.

00:00:47.280 --> 00:00:51.720
A lot to cover. The primary focus was grocery and how everything fit in there.

00:00:52.540 --> 00:00:58.980
Right after a two-day marathon session with Amazon, we sat down to record a

00:00:58.980 --> 00:01:02.570
podcast where we did a deep dive on everything we learned.

00:01:03.070 --> 00:01:07.390
And really, because the topic was grocery, it ends up being pretty much a deep

00:01:07.390 --> 00:01:12.470
dive on grocery with some ancillary things done in there, all through the lens of Amazon.

00:01:13.230 --> 00:01:16.340
Because it is such a meaty topic and one of Jason's favorites,

00:01:16.700 --> 00:01:20.280
this ended up being a 90-minute plus recording session.

00:01:20.620 --> 00:01:24.490
So what we decided to do is split it into two shorter episodes.

00:01:25.930 --> 00:01:32.090
This is going to be part one, and in this episode, we cover how Amazon finally

00:01:32.090 --> 00:01:33.390
cracked the grocery code,

00:01:34.400 --> 00:01:38.510
the end of the weekly grocery trip, Walmart's 30-year gamble,

00:01:38.510 --> 00:01:43.560
and why it matters today, and Amazon's new playbook for the value shopper.

00:01:44.550 --> 00:01:48.870
I hope you enjoyed the episode. We had a really great trip out to Seattle and

00:01:48.870 --> 00:01:51.750
learned a ton and got to meet a lot of interesting new folks.

00:01:52.100 --> 00:01:54.020
Welcome to the Jason and Scot Show.

00:01:54.440 --> 00:01:57.960
This episode is being recorded on Wednesday, August 19th.

00:01:58.320 --> 00:02:03.270
I'm your host, Jason Retail Geek Goldberg, and as usual, I'm literally here

00:02:03.270 --> 00:02:05.710
with your co-host, Scot Wingo.

00:02:05.930 --> 00:02:09.650
Hey, Jason, and welcome back, Jason and Scot Show listeners.

00:02:10.180 --> 00:02:14.090
Jason, we haven't recorded the podcast, I think, for like, what are we on?

00:02:14.090 --> 00:02:17.270
Like, we're in the 350s of our episodes. Feels like 10,000.

00:02:17.410 --> 00:02:21.410
Yeah, maybe like 10 of them have been in person. And then we've been in person

00:02:21.410 --> 00:02:26.360
together so much, kind of randomly. We were at NRF Nexus, and then we both got invited.

00:02:26.680 --> 00:02:30.340
We didn't realize it until I think we were recording a podcast that we were

00:02:30.340 --> 00:02:31.480
both coming out here to Amazon.

00:02:31.889 --> 00:02:36.240
So we're out here. We had a briefing, an executive briefing that talked about

00:02:36.240 --> 00:02:39.980
mostly grocery, which was very much in your wheelhouse, but a lot of prime.

00:02:40.360 --> 00:02:44.669
And what we're here to do is share some of the things that we learned there

00:02:44.669 --> 00:02:48.120
and some of the thoughts that we had from that while they're fresh in our mind.

00:02:48.120 --> 00:02:52.000
Yeah, yeah, yeah. Really, those 10 shows we've done together are my favorite

00:02:52.000 --> 00:02:56.270
10 shows, and you were saying they were your least favorite shows. I never said that.

00:02:57.080 --> 00:03:01.100
I will also apologize if this is a little echoey. We're coming to you live from

00:03:01.100 --> 00:03:05.300
a, it was hard to find a place to record, but we were able to find a WeWork,

00:03:05.300 --> 00:03:08.050
but we're in a relatively small room, so it's going to be a little echoey.

00:03:08.199 --> 00:03:12.550
We were briefly in Andy Jesse's office and then a security guard.

00:03:12.550 --> 00:03:17.110
Yeah. Very politely relocated us. And then there's a whole restraining order,

00:03:17.110 --> 00:03:18.170
but we'll talk about that later.

00:03:20.580 --> 00:03:26.370
So why is grocery so important to all these retailers,

00:03:26.950 --> 00:03:30.630
yeah well grocery is a huge chunk of consumer spending depending on how you

00:03:30.630 --> 00:03:32.950
count it's like 20 percent of,

00:03:33.400 --> 00:03:39.420
discretionary spend but it's also the most frequent spend that we do so you

00:03:39.420 --> 00:03:43.890
may be in market for a tv every you know three to five years you might buy new

00:03:43.890 --> 00:03:47.970
clothes every season or every quarter but traditionally,

00:03:48.610 --> 00:03:51.890
you went grocery shopping every week, at.

00:03:53.050 --> 00:03:55.160
Least in the U.S., and increasingly,

00:03:55.910 --> 00:03:59.720
people are starting to grocery shop even much more frequently than weekly.

00:03:59.720 --> 00:04:05.820
So more than anything else, the grocery category for consumer spending in the U.S.

00:04:06.090 --> 00:04:10.910
Drives frequency, and frequency drives familiarity and loyalty.

00:04:10.910 --> 00:04:17.210
So every retailer wants to own as big a share of the consumer's stomach as possible

00:04:17.210 --> 00:04:22.420
because it's the most direct line we have to their heart. What's, is it working?

00:04:22.950 --> 00:04:26.029
So let's talk about Walmart first. Like let's set up with Walmart.

00:04:26.140 --> 00:04:31.210
So Walmart is the largest grocer now, right? Yeah, by a significant margin.

00:04:31.210 --> 00:04:33.810
Walmart sells more groceries in the US than anyone else.

00:04:34.110 --> 00:04:39.320
There's a largely great untold story, but Sam Walton built a very large,

00:04:39.320 --> 00:04:42.070
successful business as a discount retailer.

00:04:42.770 --> 00:04:47.070
His big insight was people wanted to pay less. And so he did something revolutionary.

00:04:47.360 --> 00:04:53.029
He sold products at a lower price than the list price, which was largely unheard

00:04:53.029 --> 00:04:56.330
of back then. And so he built a really successful, amazing business.

00:04:57.440 --> 00:05:02.240
Largely based on this idea of being a discounter, but he did not sell perishables.

00:05:03.029 --> 00:05:07.649
They only sold the subset of grocery that we would call the center of store,

00:05:07.940 --> 00:05:11.839
the paper towels, the cleaning products, the pet products, but you couldn't

00:05:11.839 --> 00:05:16.720
get your bananas or your cold beverages or your milk from Walmart.

00:05:17.070 --> 00:05:23.390
And so one of Sam's successors as CEO, David Glass, made a huge strategic decision

00:05:23.390 --> 00:05:25.520
to have walmart add grocery,

00:05:25.980 --> 00:05:29.620
to their assortment and at the time everyone thought that was incredibly stupid

00:05:29.910 --> 00:05:32.440
groceries are way lower margin than,

00:05:32.990 --> 00:05:36.250
most of the products walmart sold and they're much more complicated they have

00:05:36.250 --> 00:05:38.350
a much more complicated supply chain and

00:05:38.770 --> 00:05:44.080
they're perishable they literally like lose value and you know cease to be valuable

00:05:44.080 --> 00:05:45.550
while they're sitting on the shelf

00:05:45.890 --> 00:05:48.850
and so for all these reasons people are like it's way harder why would you do

00:05:48.850 --> 00:05:52.120
that when you're doing so well in these other things about when was that like

00:05:52.120 --> 00:05:56.250
when did walmart enter the grocery seriously with yeah this would have been in the,

00:05:56.850 --> 00:06:03.720
late 80s okay so what we'll call the successful transition 1990-ish memory serves and so uh.

00:06:04.690 --> 00:06:09.490
Walmart sort of added grocery and they got the exact result that we're now talking

00:06:09.490 --> 00:06:12.910
about suddenly people were going to walmart much more frequently

00:06:13.200 --> 00:06:16.630
because you may have done a monthly shop at walmart when they were a discount

00:06:16.630 --> 00:06:21.360
general merchant But now you were doing a weekly shop at Walmart because they were the best place

00:06:21.700 --> 00:06:26.310
for you to get all your groceries to stretch your family budget further than any place else.

00:06:26.640 --> 00:06:32.160
And they very quickly overtook all the big traditional national grocers in the

00:06:32.160 --> 00:06:36.160
US. So you think of the today, what today is mostly Kroger and Albertsons are

00:06:36.160 --> 00:06:38.130
the two big, big nationals back then.

00:06:38.470 --> 00:06:42.890
There were a few more, right? You know, I think Safeway and Vons were all separate

00:06:42.890 --> 00:06:44.110
entities back in that day.

00:06:45.680 --> 00:06:52.910
So Walmart captured frequency and they leveraged that frequency to grow their entire business.

00:06:53.130 --> 00:06:58.110
And they became much larger than the largest specialty grocer in the U.S.

00:06:58.110 --> 00:07:02.450
So Kroger is the largest pure grocer in the U.S., but Walmart sells more than

00:07:02.450 --> 00:07:06.190
twice as much food as Kroger does.

00:07:06.750 --> 00:07:12.860
And so then when Walmart lost e-commerce, they lost e-commerce without perishables.

00:07:13.370 --> 00:07:17.660
And in fact, fun fact, for those of you that have had the misfortune of following me for a long time,

00:07:18.270 --> 00:07:23.070
I used to talk, I used to show the homepage for Walmart, which was quite shocking

00:07:23.070 --> 00:07:29.810
because the home e-commerce page for Walmart would frequently promote their biggest in-store deal.

00:07:29.810 --> 00:07:36.990
So I would show a picture of steak and a huge rollback price on a surprisingly low price on a steak.

00:07:37.530 --> 00:07:41.440
And the reason that that was surprising was because Walmart didn't sell steak online.

00:07:41.710 --> 00:07:44.540
But, and so while the website was working as an e-commerce site,

00:07:44.540 --> 00:07:48.860
Walmart knew it was also driving in-store visits. And so they would promote

00:07:48.860 --> 00:07:53.790
these groceries on the website, but you had to go to the store and buy the steak.

00:07:54.400 --> 00:07:58.830
And so it took quite a while after they launched general merchandise and they

00:07:58.830 --> 00:08:01.490
launched a marketplace, which you'd be more familiar with than I,

00:08:01.490 --> 00:08:03.090
and they start getting traction on the marketplace.

00:08:03.390 --> 00:08:07.470
They're selling all this general merchandise and eventually they decided to

00:08:07.470 --> 00:08:13.030
add grocery And they, part of the insight was maybe people don't want us to

00:08:13.030 --> 00:08:15.570
deliver all the groceries because we're going to charge extra for that.

00:08:15.570 --> 00:08:18.340
That's going to be more expensive. It's not a habit in America,

00:08:18.650 --> 00:08:21.640
but maybe people like the convenience of ordering the groceries from soccer

00:08:21.640 --> 00:08:23.480
practice and picking them up on their way home.

00:08:23.610 --> 00:08:28.550
So we've called that most of the U S we call that click and collect or curbside

00:08:28.550 --> 00:08:31.720
pickup focus, online pickup in store.

00:08:31.920 --> 00:08:35.670
More generally in food, they, for some reason they call it different because in the old,

00:08:36.720 --> 00:08:40.330
for almost everything but food you went in the store to get it and for food

00:08:40.330 --> 00:08:46.760
they met you at the curb so weird distinction fun fact in the uk we'd call it click and collect in in

00:08:47.160 --> 00:08:51.220
asia we call it online online walmart likes to invent their own words for everything

00:08:51.460 --> 00:08:54.200
so at walmart it was called online grocery pickup ogp.

00:08:55.660 --> 00:09:01.179
And ogp became very popular walmart launched a really popular series of ads

00:09:01.179 --> 00:09:05.260
called famous trucks where they showed all these like you know famous vehicles

00:09:05.260 --> 00:09:09.580
from movies like the Scooby-Doo Mobile and the Batmobile and,

00:09:10.220 --> 00:09:15.620
the Back to the Future, a DeLorean coming into Walmart's parking lot and picking up groceries.

00:09:15.880 --> 00:09:23.150
And that launching of grocery, I would argue, was a huge accelerator of e-commerce at Walmart.

00:09:23.150 --> 00:09:29.730
They built a big durable business in general merchandise, but their growth rate

00:09:29.730 --> 00:09:32.580
was not like out of the stratosphere.

00:09:32.580 --> 00:09:37.040
And once they started adding grocery, they suddenly became one of the fastest

00:09:37.040 --> 00:09:40.330
growing e-commerce sites in the U.S., even though they were at the time the

00:09:40.330 --> 00:09:42.679
third or fourth largest e-commerce site in the U.S.

00:09:43.070 --> 00:09:47.510
And so grocery was a huge accelerator of new food for them.

00:09:47.809 --> 00:09:51.660
And, you know, of course, Amazon continues to sell a lot of those center of

00:09:51.660 --> 00:09:53.590
store items on their website.

00:09:53.980 --> 00:09:58.059
And so I would say at the beginning of the pandemic, even at the end of the

00:09:58.059 --> 00:10:03.350
pandemic, Walmart and Amazon were the two largest online grocers in the U.S.

00:10:04.000 --> 00:10:08.850
Huge disproportionate amount of sales. There's a third meaningful player, which is Instacart.

00:10:09.290 --> 00:10:14.040
But they're complicated because they're more of a marketplace for a bunch of other grocery stores.

00:10:14.510 --> 00:10:18.929
So Walmart and Amazon were the two direct grocers. And everyone's always talking

00:10:18.929 --> 00:10:22.750
about Walmart versus Amazon and who's bigger. and there was a lot of disagreement

00:10:22.750 --> 00:10:24.549
about who was growing faster, who was bigger.

00:10:24.870 --> 00:10:29.360
But the dirty secret was they almost weren't competing with each other because

00:10:29.360 --> 00:10:33.320
the overwhelming majority of stuff that Walmart was selling was perishables

00:10:33.700 --> 00:10:35.440
and a big part of it was perishables.

00:10:36.929 --> 00:10:40.040
Came to the store and picked up via online grocery pickup,

00:10:40.760 --> 00:10:46.340
and the overwhelming majority of grocery items that amazon was selling were,

00:10:46.850 --> 00:10:51.580
ambient shelf stable items that mostly weren't edible right so yeah we learned

00:10:51.580 --> 00:10:56.860
they call those consumables yes yes one one super confusing yes although i think

00:10:56.860 --> 00:11:00.770
there's some some debate about what they should call them yeah but yeah Yeah.

00:11:01.299 --> 00:11:05.620
And so so I would say they had this sort of they each had their own strengths.

00:11:06.470 --> 00:11:11.110
And I think what's been super interesting to see play out in the last two years

00:11:11.410 --> 00:11:15.690
is they both have kind of maximized the growth they could get with their strength.

00:11:15.690 --> 00:11:18.679
And so they're both sort of attacking each other's strengths right now.

00:11:18.679 --> 00:11:23.900
So we've seen Walmart lean into trying to get a much bigger share of the cart

00:11:23.900 --> 00:11:27.660
and not just the consumables and bundle more general merchandise.

00:11:27.920 --> 00:11:31.520
They used to have a grocery app that was gold, if I'm remembering right,

00:11:31.520 --> 00:11:33.880
and the general merchandise app that was blue.

00:11:34.160 --> 00:11:37.280
And you used to have to decide which app you were going to run to go shopping.

00:11:37.280 --> 00:11:38.660
So there are two walled gardens.

00:11:39.190 --> 00:11:43.320
They merge those two apps and they let you start bundling things together in a cart.

00:11:43.679 --> 00:11:47.650
And at the same time, about two, two and a half years ago, Amazon made a big

00:11:47.650 --> 00:11:54.520
investment in adding temperature control environments into all of their fastest

00:11:54.520 --> 00:11:56.679
delivery fulfillment centers.

00:11:56.950 --> 00:12:02.470
So generally they call fulfillment centers FCs, but they call the ones that store items for.

00:12:03.200 --> 00:12:07.059
Same day deliveries, what they call SSD, sub same day.

00:12:07.380 --> 00:12:11.740
They put refrigerators and freezers in every one of those. And they took a bunch

00:12:11.740 --> 00:12:15.630
of the inventory that used to only be available from Amazon Fresh stores or

00:12:15.630 --> 00:12:16.720
from Whole Foods stores.

00:12:17.090 --> 00:12:22.760
And they literally put it in the fulfillment center with all the other fast ship sub same day items.

00:12:23.090 --> 00:12:28.730
And so suddenly for Walmart, that unlocked selling the entire grocery list.

00:12:28.980 --> 00:12:32.309
At the same time, Walmart was trying to sell the same grocery list,

00:12:32.309 --> 00:12:35.470
but they attacked it kind of from opposite strengths, if you will. Okay.

00:12:35.799 --> 00:12:38.970
Even, even Amazon had the SSDs. Yes. Sorry. Did I, I'm good.

00:12:39.710 --> 00:12:43.470
Yeah. What, going back to Walmart, what data is there that shows that there's

00:12:43.470 --> 00:12:46.430
a lot of attached rates? So if people are going for the grocery,

00:12:46.430 --> 00:12:48.950
they get the GM, the general merchandise.

00:12:49.320 --> 00:12:52.380
I'm not sure there's necessarily like a super clean data source that I would

00:12:52.380 --> 00:12:56.280
point to. And obviously like everyone tries to read the TV. It's like Walmart's

00:12:56.280 --> 00:12:58.800
not disclosing what their actual sales are on Amazon.

00:13:00.570 --> 00:13:06.840
Walmart has very reliably disclosed their e-commerce overall growth rate in

00:13:07.030 --> 00:13:09.430
all of their earnings calls. And in several of their earnings calls,

00:13:09.430 --> 00:13:13.110
they call out the individual growth rates of specific categories.

00:13:13.460 --> 00:13:19.860
And so what we always see is grocery was always that fastest growing category

00:13:19.860 --> 00:13:21.080
every time they called it out.

00:13:21.420 --> 00:13:25.980
But the other super fast growing category was third party general merchandise.

00:13:25.980 --> 00:13:31.000
It was the marketplace growing. And so these two businesses kind of together

00:13:31.000 --> 00:13:36.410
were the growth thrivers and there's, you know, a reasonable assumption,

00:13:36.410 --> 00:13:38.170
but I don't necessarily have data to prove it.

00:13:38.900 --> 00:13:44.030
That Walmart was successfully selling both items to those same shoppers.

00:13:44.030 --> 00:13:48.280
The other thing I've learned about grocery that's interesting compared to other

00:13:48.280 --> 00:13:51.850
categories generally is there's all these third-party data sources.

00:13:52.500 --> 00:13:57.170
So say a little bit about those and what you – you always have interesting opinions on these things.

00:13:57.170 --> 00:14:00.600
Like what's your – do you trust me to this stuff? Some of it is like there's

00:14:00.600 --> 00:14:05.690
this odd data sharing mechanism. Yeah, it's super tricky. And it's one of these

00:14:05.690 --> 00:14:09.870
things where nothing paints a completely clear, reliable picture.

00:14:10.340 --> 00:14:14.590
They're all useful if you understand their limitations. And the most useful

00:14:14.590 --> 00:14:17.870
thing is to kind of look at them in the aggregate, like to look at them all

00:14:17.870 --> 00:14:20.370
as a pool of signals that are trying to tell you.

00:14:20.370 --> 00:14:24.150
Trying to triangulate. Yeah. So I obviously, I talk a lot about the U.S.

00:14:24.150 --> 00:14:28.840
Department of Commerce data and U.S. Department of Commerce reports data on

00:14:28.840 --> 00:14:32.020
sales every month. There's a huge flaw in how they report it.

00:14:32.800 --> 00:14:37.770
Every retailer is classified as a category of retailer. And so all of their

00:14:37.770 --> 00:14:41.490
sales go in that category. So Walmart's a general merchant, whether they sell

00:14:41.490 --> 00:14:45.510
online or offline, it goes to the general merchandise. And grocery goes in there?

00:14:45.510 --> 00:14:46.870
Grocery goes in there as well. Okay.

00:14:47.050 --> 00:14:49.590
And so there's a separate, they don't actually talk grocery.

00:14:49.590 --> 00:14:53.880
The NIC code is called food and beverage, but, but, Trover is a food and beverage

00:14:53.880 --> 00:14:55.430
retailer. So their sales go in food

00:14:55.430 --> 00:15:00.280
and beverage and Amazon is a non-store retailer. So in this monthly data,

00:15:01.030 --> 00:15:04.620
Although they all sell each other's products, they all get reported as having

00:15:04.620 --> 00:15:06.120
sales in separate categories.

00:15:07.120 --> 00:15:11.120
The same entity, the Census Bureau, tries to,

00:15:11.580 --> 00:15:16.570
disaggregate that data specifically for e-commerce and say, this percentage

00:15:16.570 --> 00:15:20.670
of Walmart sales were grocery, this percentage of Walmart sales were general

00:15:20.670 --> 00:15:23.060
merchandise, this percent of sales were apparel.

00:15:23.480 --> 00:15:29.540
They don't disclose individual retailers' estimates, but they aggregate all those estimates.

00:15:29.540 --> 00:15:32.770
And so quarterly, they publish what we call the e-commerce report.

00:15:32.770 --> 00:15:36.730
And there they tell us much more accurately what they think e-commerce sales

00:15:36.730 --> 00:15:43.270
were for the quarter, but also how the e-commerce sales broke down across all these categories.

00:15:43.270 --> 00:15:50.280
So that is one source. It has some significant flaws in it, but it's very consistent.

00:15:50.280 --> 00:15:51.800
They've been doing it for a long time.

00:15:52.070 --> 00:15:56.810
They have the extra force of law to compel people to try to provide accurate

00:15:56.810 --> 00:15:57.900
data. So that's helpful.

00:15:58.120 --> 00:16:03.230
And so it's a foundational data source I use as a starting point for all these

00:16:03.230 --> 00:16:08.830
things. Not super granular, not super timely, has some well-known significant flaws in it.

00:16:09.320 --> 00:16:13.540
So then you have a bunch of for-profit companies that have other pieces of the

00:16:13.540 --> 00:16:15.770
pie. We have what we call credit card panels.

00:16:16.160 --> 00:16:19.580
So there's today, I think, four or five companies. There's Affirm,

00:16:19.580 --> 00:16:24.650
there's Ernest, there's Numerator, there's MasterCard Spending Pulse.

00:16:24.970 --> 00:16:29.400
And they all have panels of millions of users' credit card receipts.

00:16:29.870 --> 00:16:35.220
And so they get very accurate data about the amount of spend that happened on

00:16:35.220 --> 00:16:37.390
a credit card at an individual retail.

00:16:37.900 --> 00:16:41.440
Unfortunately, they don't get to see the items on that receipt.

00:16:41.800 --> 00:16:46.200
And so they don't know, did someone buy apparel from Walmart or did they buy...

00:16:47.070 --> 00:16:50.240
Groceries from Walmart, and they don't see cash.

00:16:50.610 --> 00:16:53.810
And, you know, there's still a meaningful amount of spending that happens via

00:16:53.810 --> 00:16:59.320
cash. So they have to use math to try to estimate the cash portion and do all

00:16:59.320 --> 00:17:01.690
these things. So credit card panels are another useful source.

00:17:02.000 --> 00:17:05.730
Usually those aren't free. So you usually have to subscribe to them.

00:17:06.109 --> 00:17:09.490
And most big retailers and brands are going to use them as part of the mix.

00:17:10.099 --> 00:17:14.450
There are companies that have done partnerships with the retailer and the retailer

00:17:14.450 --> 00:17:15.990
sells them anonymous data.

00:17:16.540 --> 00:17:21.240
And so they're getting data from the actual cash registers. And so that data

00:17:21.240 --> 00:17:23.940
actually has item level data in it, right?

00:17:24.619 --> 00:17:29.710
That's credit card cash. Exactly. Exactly. So it has a much more granular picture.

00:17:29.980 --> 00:17:33.940
At various times, different retailers are willing to sell their data in there.

00:17:34.660 --> 00:17:39.920
No retailer wants to be so big that their data can be disaggregated when it's

00:17:39.920 --> 00:17:40.750
in there, though, right?

00:17:40.750 --> 00:17:44.970
And so there have been times when Walmart has participated. There's been times when they don't.

00:17:44.970 --> 00:17:48.970
And when they don't, it's not a very accurate snapshot of all of the U.S.

00:17:48.970 --> 00:17:54.000
But it's another good data source that tells us a piece of that story.

00:17:54.000 --> 00:17:57.910
And it can be used as a validation for some of these other data sources.

00:17:58.340 --> 00:18:04.300
And then more recently with e-commerce, there are companies that scan digital receipts.

00:18:04.710 --> 00:18:10.359
So these will be companies that you might, they might be above board and would

00:18:10.359 --> 00:18:13.930
get people to opt in for some, you know, in exchange for some benefit.

00:18:13.930 --> 00:18:19.960
You share all your receipts with this company and then they anonymize your data and sell it.

00:18:21.010 --> 00:18:24.119
More often than we would like, it's somewhat nefarious.

00:18:24.890 --> 00:18:30.040
They tell you some other benefit to have you give them the credentials to your

00:18:30.040 --> 00:18:34.160
email and they make it somewhat secretive that they're also collecting all your

00:18:34.160 --> 00:18:36.820
spending data and selling that.

00:18:36.820 --> 00:18:43.180
So they're definitely gray to black hat providers in the digital receipt space,

00:18:43.180 --> 00:18:47.920
but digital receipts can have a lot more granular data in them.

00:18:48.150 --> 00:18:52.230
If you look closely at your Amazon receipts, you'll find that Amazon,

00:18:52.230 --> 00:18:57.450
to hide the data, actually doesn't send you a digital receipt that is itemized.

00:18:58.040 --> 00:19:02.619
And so there's a whole war. So those are the main data sources.

00:19:02.619 --> 00:19:06.640
There's also some like survey stuff and some things like that.

00:19:06.640 --> 00:19:11.030
But what you're really likely, and by the way, a few companies have aggregated

00:19:11.030 --> 00:19:12.970
a bunch of these data sources together.

00:19:13.230 --> 00:19:17.640
What is Nielsen and Sarkama? I don't know where they fall in this spectrum.

00:19:17.640 --> 00:19:21.560
So they, I was gonna say today, they probably own three kinds of products.

00:19:21.700 --> 00:19:23.710
So they're gonna own both.

00:19:25.010 --> 00:19:30.570
A scanner data database that's getting receipts from retailers.

00:19:30.830 --> 00:19:35.230
They're going to own a user panel that's getting reported spending from the

00:19:35.230 --> 00:19:39.599
panel or from a credit card company that they've done a licensing deal with.

00:19:40.290 --> 00:19:43.300
And they probably are going to own a digital receipt panel. So they're,

00:19:43.750 --> 00:19:47.060
they may take those as three separate products that you use on your own,

00:19:47.060 --> 00:19:53.250
or they may try to aggregate the data and model it to paint a broader picture.

00:19:53.609 --> 00:19:57.190
As I'm talking, I realize there's one other kind of data source that's super

00:19:57.190 --> 00:20:02.710
useful in this, which is like e-commerce traffic data. So most famously, that's SimilarWeb.

00:20:03.260 --> 00:20:07.730
SimilarWeb doesn't really know what you spend, but they know how much traffic

00:20:08.040 --> 00:20:13.040
Kroger gets versus Albertsons. And so you can make some assumptions based on

00:20:13.040 --> 00:20:14.640
that. Yeah, they use panel data.

00:20:14.970 --> 00:20:19.630
Yeah. In the end, there are a couple of companies that try to specifically estimate

00:20:19.630 --> 00:20:24.210
e-commerce for specific retailers and disaggregate it. So they literally will

00:20:24.210 --> 00:20:28.010
tell you, we think Walmart did X, we think Kroger did Y.

00:20:28.390 --> 00:20:31.050
And so those are companies like Comscore.

00:20:33.580 --> 00:20:39.330
The Internet Retail 1000 does that. I know RefiBuy did an interesting data partnership

00:20:39.330 --> 00:20:41.650
with them recently, which people should check out.

00:20:42.369 --> 00:20:44.630
There's a European company called ECDB.

00:20:45.440 --> 00:20:48.800
It was started by the founders of Statistica. And I actually think they have

00:20:48.800 --> 00:20:53.030
a really good version of this. And unlike those other companies, they do it globally.

00:20:53.220 --> 00:20:58.530
And also Euromonitor has a product in the space. So, so again, if you're a company,

00:20:59.780 --> 00:21:03.500
a customer insights person or strategy person for a big brand that sells to

00:21:03.500 --> 00:21:07.880
a lot of retailers or a retailer you probably have access to this broad range

00:21:07.880 --> 00:21:09.820
of data sources and you're trying to,

00:21:10.440 --> 00:21:11.680
understand the limitations of

00:21:11.680 --> 00:21:15.210
each and figure out what you can learn from each yeah so a brand will say,

00:21:15.869 --> 00:21:20.480
i'm pampers and i want to go see how i'm doing across the spectrum of retailers

00:21:20.480 --> 00:21:24.619
with versus huggies and all the other you know what's my share of diapers and

00:21:24.619 --> 00:21:27.980
they They look into all these data sources and try to peer across.

00:21:28.160 --> 00:21:31.980
Yes, and this will come as a huge shock to you, Scot, because I know you have

00:21:32.220 --> 00:21:34.500
this belief that all big companies are super efficient.

00:21:35.349 --> 00:21:38.730
But it would be super common that you might walk into a company and find out

00:21:38.730 --> 00:21:42.670
that they had eight subscriptions to the same data source.

00:21:42.920 --> 00:21:46.840
And then they have all these data sources, and yet people that should be making

00:21:46.840 --> 00:21:50.040
important decisions based on this data have no access to any of them.

00:21:50.040 --> 00:21:53.619
Yeah, because the Pampers people and the Swifter people all have it.

00:21:53.619 --> 00:21:55.480
They don't talk to each other. Exactly. Gotcha.

00:21:56.030 --> 00:21:59.770
Even with the Pampers or maybe like the pumpkin spice Pampers people.

00:22:00.200 --> 00:22:03.950
Yeah. And the customer insights team might've rented it for one purpose,

00:22:04.380 --> 00:22:10.990
but the supply chain planning people don't get it. Or the account planning people or whatever.

00:22:11.510 --> 00:22:13.710
That's really good background. So that brings us up to today.

00:22:13.710 --> 00:22:16.980
Well, actually that brings us up to August 2nd. So on August 2nd,

00:22:16.980 --> 00:22:20.810
we did our very popular Q2 Amazon results.

00:22:21.290 --> 00:22:25.410
And you and I both perked up our ears. Number one, during that call,

00:22:25.410 --> 00:22:29.180
Jassy was like a 9 out of 10, and sometimes he would get up to an 11,

00:22:29.180 --> 00:22:30.900
especially with AWS and AI.

00:22:31.390 --> 00:22:38.210
One of his 9 out of 10 comments was he said, we have seen a trajectory change.

00:22:38.210 --> 00:22:40.310
And this is kind of language like they've never used, right?

00:22:40.310 --> 00:22:41.590
So this is why it stood out to us.

00:22:41.900 --> 00:22:45.369
There was like three instances of this drink of call, but this is the one specific to grocery.

00:22:45.880 --> 00:22:47.670
And he was talking about grocery.

00:22:48.290 --> 00:22:52.650
And he said, with grocery, we've seen a trajectory change in the business.

00:22:53.070 --> 00:22:56.660
And he was very excited to then kind of talk about it. So one of the things

00:22:56.859 --> 00:23:00.300
I asked her one today was like, what is causing that trajectory change?

00:23:00.980 --> 00:23:04.330
And so that's one of the things I wanted to get into here and kind of go through some.

00:23:06.210 --> 00:23:12.450
So some of the data and all this is publicly pre-release. This is nothing under NDA or anything.

00:23:13.180 --> 00:23:18.760
So they've talked about monthly active perishable customers are up 50% since the start of the year.

00:23:18.760 --> 00:23:23.490
So that's just 2026. It's like not even year over year. That's like in a six

00:23:23.490 --> 00:23:29.260
month, which you would assume if you trajectorize that, it's like well over 100% or something.

00:23:30.410 --> 00:23:34.790
Same day orders are averaging three times more per units per order.

00:23:34.790 --> 00:23:39.430
So the attached rate or the basket quantity size is kind of bigger.

00:23:40.050 --> 00:23:43.700
Fresh groceries are now six of the top 20 best sellers on Amazon.

00:23:45.030 --> 00:23:48.119
You used to almost never see that it was always kindle devices and now i don't

00:23:48.119 --> 00:23:51.540
know if it's bananas or avocados whatever it is but that's going in grocery

00:23:51.540 --> 00:23:55.910
space bananas is almost always the number one yeah online game stores weird

00:23:56.160 --> 00:23:58.580
yep then you can tell they're so the,

00:23:59.200 --> 00:24:04.220
the typical amazon playbook is basically from the 1997 shareholder layer where

00:24:04.220 --> 00:24:08.670
he basically said we believe people want more selection they want stuff fast and they like low prices,

00:24:09.450 --> 00:24:12.750
so that's like the three pillars of Amazon it has been since the founding of

00:24:12.750 --> 00:24:18.340
the company and it seems like they've bought the Amazon engine into bear and

00:24:18.340 --> 00:24:20.150
they've they've tried a lot so they're,

00:24:20.859 --> 00:24:27.470
what did we decide 15 years into this maybe 20 into trying grocery and in typical

00:24:27.470 --> 00:24:32.619
Amazon fashion when they when they want to do something and another thing to think about is,

00:24:33.320 --> 00:24:38.619
Amazon can't go after small opportunities right So they couldn't go after, like, what's a.

00:24:39.900 --> 00:24:44.109
I don't know, roofing nails or some kind of niche category.

00:24:44.330 --> 00:24:48.680
When you were a multi-trillion dollar market cap business, you have to take

00:24:48.920 --> 00:24:49.960
trillion dollar swings.

00:24:50.580 --> 00:24:53.910
You have to go find. Because the rate has to be meaningful. Yeah,

00:24:53.910 --> 00:24:55.880
you have to go find $200 billion of revenue.

00:24:56.140 --> 00:25:00.020
Well, there's only so much. Now you start looking at GDP and you're like,

00:25:00.020 --> 00:25:03.520
well, what do we not have? What do we want? What do we not want?

00:25:03.740 --> 00:25:05.040
There's big sections of GDP.

00:25:05.800 --> 00:25:07.840
One of them is healthcare. They talk a little bit about that.

00:25:07.840 --> 00:25:09.210
That's outside of what we're doing.

00:25:09.210 --> 00:25:11.760
They're just nibbling away at that. They've had a lot of false starts,

00:25:12.099 --> 00:25:15.220
but they decided that grocery had to be one of those. And they've,

00:25:15.390 --> 00:25:19.880
they've in very typical Amazon fashion, they've gotten in there and they failed

00:25:19.880 --> 00:25:23.180
a lot. They've tried all the things and now it seems to be working.

00:25:23.780 --> 00:25:27.780
What, what do you think is the unlock for that? Well, I think we know,

00:25:27.780 --> 00:25:31.660
I think they've kind of talked about it in a bunch of the earnings calls. It's, it's.

00:25:32.390 --> 00:25:40.400
Adding the perishable fulfillment to their SSDs so that, you know,

00:25:40.920 --> 00:25:47.320
they weren't just selling the ambient stuff, but they were selling the proteins and the milks.

00:25:47.720 --> 00:25:53.870
And that, like, caused them to be a true competitor to all the other grocery

00:25:53.870 --> 00:25:55.420
alternatives for the first time.

00:25:55.810 --> 00:26:02.440
And they executed it at scale. It's really an untold story, a success story of the last two years.

00:26:04.570 --> 00:26:08.960
You and I have objective understanding of how big the Amazon Fulfillment Network is.

00:26:09.360 --> 00:26:12.790
Most people have no earthly idea, but it's, even for us, I don't think we can

00:26:12.790 --> 00:26:14.860
fully appreciate how big it really is.

00:26:15.160 --> 00:26:18.130
It's just overwhelming. It's mind-boggling.

00:26:19.220 --> 00:26:25.760
And so to say like, oh man, we're going to add two more climates to the vast

00:26:25.760 --> 00:26:28.180
majority of all our points of distribution.

00:26:28.990 --> 00:26:31.820
Like that would have been a non-starter in most companies like someone would

00:26:31.820 --> 00:26:36.750
have proposed that and they would have gone like i'd rather invest in inventing

00:26:36.750 --> 00:26:39.310
rockets to go to mars right because it's way more likely,

00:26:39.820 --> 00:26:45.790
but amazon like has is known for for taking swings at these big challenges and they,

00:26:46.440 --> 00:26:52.400
essentially reinvented their whole distribution system to be multi-climate and

00:26:52.650 --> 00:26:55.890
i would almost characterize their earnings call as them being a little giddy

00:26:56.290 --> 00:26:58.520
with how well it's worked out.

00:27:00.120 --> 00:27:05.250
I think that they shared all those engagement stats about how much more important

00:27:05.250 --> 00:27:11.290
and central they are to customers' lives and how many occasional infrequent customers became,

00:27:12.240 --> 00:27:16.820
super frequent core customers to Amazon because of perishables.

00:27:17.140 --> 00:27:21.700
And I think they shared a bunch of data in the Hardings call about it being

00:27:21.700 --> 00:27:23.550
a new acquisition tool for them.

00:27:23.550 --> 00:27:27.010
So that, you know, there's only that many people that weren't already Amazon

00:27:27.010 --> 00:27:31.400
customers, but that they were adding a bunch of new Amazon customers to file

00:27:31.400 --> 00:27:34.700
whose first order involved perishables.

00:27:35.200 --> 00:27:40.810
So I would clearly say the big unlock was this perishable thing.

00:27:41.540 --> 00:27:46.280
They did also take, they sort of had three wall gardens of shopping.

00:27:46.280 --> 00:27:49.970
They had a Whole Foods experience. They had an Amazon Fresh experience and they

00:27:49.970 --> 00:27:51.740
had an Amazon Core experience.

00:27:52.100 --> 00:27:57.050
And they've imperfectly merged those experiences. So it's probably a work in

00:27:57.050 --> 00:28:01.590
progress, but they essentially have eliminated one of those entirely, Amazon Fresh.

00:28:01.900 --> 00:28:06.180
And they now have a pretty good joint experience. So I would somewhat say,

00:28:06.820 --> 00:28:13.220
that Amazon's adding perishables online very much, to me, mirrors Walmart adding

00:28:13.220 --> 00:28:16.960
perishables to their store a number of decades ago.

00:28:17.220 --> 00:28:23.420
And Walmart closing their wild gardens and making a universal experience and.

00:28:24.300 --> 00:28:27.220
Amazon doing the same. I think there's some parallels there.

00:28:27.220 --> 00:28:31.610
So you're seeing these two large successful retailers from start at different

00:28:31.610 --> 00:28:35.040
places, but end up with somewhat similar playbooks.

00:28:35.040 --> 00:28:40.080
And I should point out a bunch of other good operators have tried these same

00:28:40.080 --> 00:28:43.000
tactics and failed miserably, right?

00:28:43.000 --> 00:28:47.480
So, you know, Target's been trying to win grocery for a long time and really

00:28:47.480 --> 00:28:49.700
had limited success in grocery.

00:28:49.700 --> 00:28:55.040
And so they do have a much poorer frequency of visit than either of these other

00:28:55.040 --> 00:28:56.590
two retailers we're not talking about.

00:28:56.590 --> 00:29:01.900
Yeah. The other thing, one of them talked about this kind of like pyramid of

00:29:01.900 --> 00:29:05.600
delivery where you've got your normal fulfillment centers, and maybe that's

00:29:05.600 --> 00:29:09.090
your two-day base, and it's got lots of selection at the base of the pyramid.

00:29:09.090 --> 00:29:12.320
And then you get into your SSDs, your selection goes down a lot,

00:29:13.200 --> 00:29:16.790
but now you're into like that one-day kind of window.

00:29:17.200 --> 00:29:20.740
Then you've got, what do they call like little ones that are like right in your neighborhood?

00:29:21.020 --> 00:29:25.330
So they have a newer service. So sub same day, they've been offering for a few

00:29:25.330 --> 00:29:28.060
years, they have a newer service they launched internationally.

00:29:28.060 --> 00:29:32.480
Like I want to say India was the first market, but they've now brought to the U S called Amazon now.

00:29:33.330 --> 00:29:36.490
I'm slightly annoyed by the name because they've used that same name for four

00:29:36.490 --> 00:29:38.010
other products that didn't work.

00:29:38.330 --> 00:29:43.060
But Amazon now is 30 minute delivery. It's a much more constrained inventory.

00:29:43.480 --> 00:29:47.930
So if you think a full Amazon fulfillment center that offers, you know.

00:29:48.890 --> 00:29:54.960
Hundreds of millions of items and is over a million square feet is one kind of fulfillment center.

00:29:55.220 --> 00:30:00.550
Sub same day, you know, probably as an assortment that's closer to a Walmart

00:30:00.550 --> 00:30:04.690
or a Hy-Vee or something like that. And it's going to be a little closer to your home.

00:30:04.920 --> 00:30:10.130
And then these rush, these now stores are going to have the smallest assortment,

00:30:10.130 --> 00:30:14.370
thousands of items, and they're going to be really close to your home, right?

00:30:14.370 --> 00:30:19.830
So that might be the out of business pharmacy store, or the nail salon,

00:30:20.170 --> 00:30:24.660
a 10,000 square foot retail store in a strip mall might, you know,

00:30:24.660 --> 00:30:28.450
get purchased by Amazon and become a- This is, to be clear, this is dark.

00:30:28.450 --> 00:30:31.530
Like there's no like front door and you can't go shop this. Correct.

00:30:31.530 --> 00:30:35.350
Yes. And you, the likely there'd be no signage to indicate it.

00:30:35.990 --> 00:30:39.470
There'd be a suspicious amount of traffic out the back parking lot.

00:30:39.910 --> 00:30:42.990
Yeah. And for a lot of those, everyone's familiar with the DSPs,

00:30:42.990 --> 00:30:44.930
which is where you get the branded vans.

00:30:45.250 --> 00:30:50.090
And then they supplement those with flex drivers, which are like their gig drivers.

00:30:50.410 --> 00:30:54.760
I believe that those little analysis stations are all flex drivers.

00:30:54.760 --> 00:30:59.240
Yeah, so a big difference. At one of those big flex fulfillment centers,

00:30:59.240 --> 00:31:04.200
when you're loading up that van, you might have 30 customer orders or 100 customer

00:31:04.200 --> 00:31:06.140
orders in that van, and you do a route.

00:31:06.140 --> 00:31:10.460
That guy might go away for eight hours and do 100 deliveries.

00:31:11.130 --> 00:31:15.550
Out of these smaller locations, that flex driver, that contractor,

00:31:15.900 --> 00:31:17.480
probably has one to three orders in there.

00:31:17.480 --> 00:31:23.040
Car, right? And so it's a much shorter trip. That's actually like quite a bit

00:31:23.040 --> 00:31:26.010
faster, right? If you're the last delivery of those hundred deliveries,

00:31:26.550 --> 00:31:28.280
it's going to be a while before you get your goods.

00:31:28.600 --> 00:31:30.830
But everyone's going to get their goods pretty quickly after that,

00:31:31.060 --> 00:31:33.960
that driver leaves that, that, uh, Amazon now depot.

00:31:35.140 --> 00:31:39.010
If you get close, by the way, some 30-minute could be eight minutes.

00:31:39.010 --> 00:31:42.270
Another thing I thought was interesting is they talked about changing consumer

00:31:42.270 --> 00:31:44.150
behavior. And you probably know more about this than I do.

00:31:44.170 --> 00:31:47.430
Number one, there's GLPs have changed the whole world. Yeah.

00:31:47.780 --> 00:31:50.500
There used to be kind of like fringe articles about that. Now it's like everyone

00:31:50.500 --> 00:31:53.070
kind of realizes what's happening. Yeah. And then number two,

00:31:53.490 --> 00:31:56.660
they talked about how the consumer is grocery shopping. Talk a little bit about

00:31:56.660 --> 00:31:58.610
some of the things there. Yeah. Well, so two things.

00:31:59.370 --> 00:32:02.690
I feel like we really should do a deep dive in GLP ones at some point.

00:32:02.690 --> 00:32:07.360
It's a super interesting thing, and it's only going to become more important in the years to come.

00:32:07.890 --> 00:32:12.330
I have been saying for a long time, just talking about digital commerce in general,

00:32:13.010 --> 00:32:17.650
that we used to go shopping. And now because of digital, we always are shopping.

00:32:17.900 --> 00:32:21.370
Right. And that was a kind of a fun throwaway line.

00:32:21.890 --> 00:32:28.620
But think about how that impacts grocery in a very unique, specific way over everything else.

00:32:28.620 --> 00:32:33.930
Right. So if you go apparel shopping, you're probably going to buy one of four skews.

00:32:33.930 --> 00:32:36.770
Like even if you go to the mall and you come home with bags of goods,

00:32:36.900 --> 00:32:38.350
you might have eight skews.

00:32:38.350 --> 00:32:42.100
Right. And that might be a monthly trip or something like that.

00:32:42.100 --> 00:32:46.670
So instead of if if that's what you did when you went shopping,

00:32:46.880 --> 00:32:51.210
if you always are shopping for apparel, you're just kind of mentally deciding

00:32:51.210 --> 00:32:56.390
what you're going to buy as you're doing scrolling on TikTok or you might add those those things.

00:32:56.390 --> 00:33:01.270
And so the one visit to the mall might get replaced with one e-commerce trip, right?

00:33:02.180 --> 00:33:06.440
When you go grocery shopping, you buy 60 to 100 items, right?

00:33:06.440 --> 00:33:11.160
And so traditionally in the U.S., grocery was a weekly shop, right?

00:33:11.160 --> 00:33:15.270
Because you can't make it a monthly shop because you can't predict exactly what

00:33:15.270 --> 00:33:18.540
you're going to consume. And there's perishables and things that expire.

00:33:18.540 --> 00:33:21.500
And milk only has a 21-day shelf life and all these things.

00:33:22.330 --> 00:33:26.770
So it turned out to be about weekly. That you'd go and you'd do a big shop every week.

00:33:27.020 --> 00:33:32.380
And if you screwed up and forgot something, you would do a fill-in shop between that weekly shop.

00:33:33.170 --> 00:33:39.850
When you always are shopping, if you suddenly can add one item to a cart and

00:33:39.850 --> 00:33:47.530
have it show up in three hours, in one hour, in 30 minutes, and you just fill in as you go.

00:33:47.880 --> 00:33:54.010
Like, it literally replaces this big shop with all these ad hoc little shops.

00:33:54.280 --> 00:33:58.850
And in our current environment, if you're a busy time starter family and you

00:33:58.850 --> 00:34:01.480
maybe don't know how many times you're going to sit down for dinner this week,

00:34:01.800 --> 00:34:06.570
it's more convenient to be able to buy the items you need for today and tomorrow

00:34:06.840 --> 00:34:10.699
today than it is to plan a week in advance.

00:34:10.940 --> 00:34:14.840
And if you have economic uncertainty in your life, there's even more reason

00:34:14.840 --> 00:34:19.110
that you might want to shop in smaller bites so that you have less waste,

00:34:19.110 --> 00:34:22.460
you have less breakage, you have less out of pocket at a time.

00:34:22.460 --> 00:34:24.210
You can manage your cash flow better.

00:34:24.410 --> 00:34:26.540
So for all of these reasons.

00:34:27.910 --> 00:34:34.590
The advent of digital commerce and the speed of service has meant that we're

00:34:34.590 --> 00:34:38.190
fundamentally reteaching people how to shop for groceries.

00:34:38.190 --> 00:34:44.160
And that big stock-up trip is largely going away for a lot of American families.

00:34:44.340 --> 00:34:49.670
And it's being replaced by these ad hoc trips, which interestingly was more

00:34:49.670 --> 00:34:53.910
common originally in, for example, Europe, where you might have lived really

00:34:53.910 --> 00:34:55.930
close to a local market and you might have,

00:34:56.380 --> 00:35:01.010
gone to that baker three times a week to get fresh bread or the butcher two

00:35:01.010 --> 00:35:02.890
times a week or whatever the case is.

00:35:02.890 --> 00:35:06.650
Yeah, so inside of that, we used to have kind of like your one grocer,

00:35:06.650 --> 00:35:08.060
you would do your big stock of that.

00:35:08.430 --> 00:35:12.630
And now industry research shows that the average consumer has three to four

00:35:12.949 --> 00:35:17.650
trips, but more than half consumers don't really have a primary grocer.

00:35:17.650 --> 00:35:24.100
They're kind of like, oh, I happen to be a soccer practice this over by this Walmart I'll pick up.

00:35:24.660 --> 00:35:28.940
Yeah. That would be my little, my little fill up. And then over here on,

00:35:28.940 --> 00:35:33.239
you know, maybe, uh, maybe your husband's on a business trip and you're just

00:35:33.239 --> 00:35:36.510
going to hit the, you don't have, you can't just leave the kids,

00:35:36.510 --> 00:35:39.150
so you're going to do an online order or whatever. Yeah.

00:35:39.530 --> 00:35:42.570
That I feel like that's another ramification. If you're doing a weekly trip.

00:35:43.270 --> 00:35:46.719
You're going to look at the 60 to 100 items you plan to buy and say,

00:35:47.050 --> 00:35:51.199
what's the best compromise? What's the one location that can best fulfill these 100 items, right?

00:35:51.650 --> 00:35:53.850
They don't have my favorite milk, but they have a good enough milk.

00:35:53.850 --> 00:35:55.530
They've got my favorite kid snacks.

00:35:55.530 --> 00:36:01.800
They've got my favorite produce, right? And so you did a bunch of subconscious

00:36:01.800 --> 00:36:07.030
calculus in your math and Kroger won or Walmart won or Amazon won, right?

00:36:07.510 --> 00:36:12.219
But now that you're buying items, item by item, meal by meal,

00:36:12.710 --> 00:36:17.350
you don't have to sub-optimize and pick the best fit for all 100 items.

00:36:17.530 --> 00:36:21.510
You can get each item from the best source. So if there's four.

00:36:22.580 --> 00:36:25.680
Try to label Trader Joe's items that you really love.

00:36:26.120 --> 00:36:29.080
You can get those things at Trader Joe's. Probably a bad example because they're

00:36:29.080 --> 00:36:32.670
like the one grocer in America that you can't get digitally.

00:36:32.790 --> 00:36:35.520
But you could go to Trader Joe's for those four items.

00:36:35.840 --> 00:36:40.650
If you love the organic produce from Whole Foods, you could get the organic

00:36:40.650 --> 00:36:41.719
produce from Whole Foods.

00:36:42.030 --> 00:36:45.080
If you love the convenience that Walmart will open your front door,

00:36:45.460 --> 00:36:49.330
walk into your house, and put your giant kegs of iced coffee that you need to

00:36:49.330 --> 00:36:51.270
restock every day- Hypothetically.

00:36:51.270 --> 00:36:55.920
In the refrigerator for you, so that they didn't go bad, even though you weren't

00:36:55.920 --> 00:36:59.830
necessarily home when the delivery happened, you might give that order to Walmart,

00:36:59.830 --> 00:37:01.620
right? And so you could, the.

00:37:03.000 --> 00:37:09.040
The switch from big shops to a lot more frequent small shops is also expanding,

00:37:10.180 --> 00:37:13.969
the breadth of providers that most consumers use.

00:37:14.190 --> 00:37:18.860
And so for your point, many fewer consumers than ever before even can articulate

00:37:18.860 --> 00:37:23.510
that they have a favorite or primary grocer because they do all this other shopping.

00:37:24.140 --> 00:37:26.699
The other thing we haven't talked about yet, which is changing with all this

00:37:26.699 --> 00:37:32.460
too, is just our relationship with food and where we get our calories is also

00:37:32.460 --> 00:37:33.980
being disrupted, right?

00:37:33.980 --> 00:37:37.770
So I think of this as a metaphor of swim lanes. They're like,

00:37:38.270 --> 00:37:41.370
hey, you're going to cook a meal at home? You're going to a grocery store.

00:37:41.370 --> 00:37:43.520
That's one lane to the pool, all the grocery stores.

00:37:44.060 --> 00:37:46.770
You want to cook a meal at home, but you're not very good at planning it?

00:37:47.219 --> 00:37:48.340
You want to buy a meal kit.

00:37:48.910 --> 00:37:52.030
That's a tiny little swim lane with the meal kit guys in it,

00:37:52.030 --> 00:37:55.340
right? And you'd get all your ingredients and you'd cook a meal at home there.

00:37:56.030 --> 00:37:59.370
You want to eat a meal on your way home from soccer practice to just make your

00:37:59.370 --> 00:38:03.860
kids quiet and you're too tired to cook dinner? You're going to stop at a QSR,

00:38:03.860 --> 00:38:07.810
a quick serve restaurant like McDonald's, and eat the fries in the car on your way home.

00:38:08.150 --> 00:38:12.460
You want a special meal with your family? You're going to go to Applebee's on

00:38:12.460 --> 00:38:16.239
a Friday night and sit down and dine there.

00:38:16.239 --> 00:38:21.150
And they each had their own swim lane, pizza delivery. And so the pizza guys

00:38:21.150 --> 00:38:25.300
all compete with the pizza guys, the QSRs with the QSRs, the grocers with the grocers.

00:38:26.449 --> 00:38:31.760
In the same way that digital has disrupted the big shop, it's disrupted how we get all this food.

00:38:32.410 --> 00:38:37.570
Restaurant sales are way up, but the dirty secret is more than 35% of all restaurant

00:38:37.570 --> 00:38:39.650
sales don't get eaten in the restaurant.

00:38:40.110 --> 00:38:46.800
They get eaten at your home. So it's what we call restaurant off-prem consumption, right?

00:38:46.960 --> 00:38:52.420
And so now that restaurant is competing for calories with the grocery store.

00:38:52.610 --> 00:38:56.730
Get the ready-to-eat meal from the restaurant and eat it at home instead of

00:38:56.730 --> 00:38:58.710
make a meal from the grocery store.

00:38:58.870 --> 00:39:03.510
And the grocery stores have responded by saying, we make amazing meals.

00:39:03.780 --> 00:39:07.670
Sam's Club is a big part of America's favorite pizza place.

00:39:08.000 --> 00:39:13.410
Costco is, of course, America's favorite hot dog provider. There's amazing prepared

00:39:13.410 --> 00:39:16.870
foods. You can get great sushi at Whole Foods, right? It seems like everyone's

00:39:16.870 --> 00:39:18.310
battling for a street check-in.

00:39:19.310 --> 00:39:23.980
Yes, and all of America wants to eat as much chicken as humanly possible,

00:39:23.980 --> 00:39:27.510
an obscene amount of chicken. We don't even want it. I don't want to even give

00:39:27.510 --> 00:39:28.969
you a mental image for how much chicken.

00:39:29.890 --> 00:39:35.930
But the thing is that everyone's TAM, total aggressible market,

00:39:35.930 --> 00:39:40.790
has greatly expanded. If you're Walmart, you used to just sell the 40% of calories

00:39:40.790 --> 00:39:42.280
people consumed at home.

00:39:42.510 --> 00:39:44.630
Now you can sell 100% of the calories.

00:39:45.040 --> 00:39:48.810
But at the same time, you used to just be competing with three other grocers.

00:39:49.070 --> 00:39:55.350
Now you're competing with all the fast casual restaurants and the QSRs and the

00:39:55.350 --> 00:39:57.310
restaurant delivery services.

00:39:57.630 --> 00:40:01.820
And so it's become the wild west. Like everything is fragmented.

00:40:02.080 --> 00:40:09.000
You have to win each food occasion as opposed to winning that aggregate food opportunity.

00:40:09.390 --> 00:40:13.449
Let's put some numbers. We've talked about Perishable Unlock and how that's

00:40:13.449 --> 00:40:16.630
been one of the big, you know, the change in trajectory.

00:40:17.540 --> 00:40:21.260
So again, these are some of the publicly available stats that they've already put out there.

00:40:22.790 --> 00:40:26.540
Monthly active perishable customers are up 50% since the start of the year.

00:40:26.540 --> 00:40:27.370
We talked about that one.

00:40:27.680 --> 00:40:32.989
Same day orders containing perishables average 3% 3x more units.

00:40:33.320 --> 00:40:37.750
Oh, wait, we talked about these. Okay, here's one. Same day grocery now reaches

00:40:37.750 --> 00:40:43.219
2,300 U.S. cities with 40 times the selection of a big box store.

00:40:43.900 --> 00:40:48.210
That's pretty interesting. And that now has made Amazon the number two grocery.

00:40:49.460 --> 00:40:56.670
So, but they're north of, how relative, isn't Walmart like 400 billion and Amazon's

00:40:56.670 --> 00:40:58.500
half of it? Yeah, depending on how you count.

00:40:59.100 --> 00:41:02.330
Yeah. Right. About 450. Just kind of, it's not, it's not close.

00:41:02.330 --> 00:41:08.060
They're not like inches away from it. No, but arguably Amazon is now a bigger grocer than Troop.

00:41:08.380 --> 00:41:12.650
Right. And so, so the company that exclusively focuses on groceries is only

00:41:12.650 --> 00:41:18.680
the third largest grocer in America, which goes to this aggregation story. Right.

00:41:19.180 --> 00:41:24.989
That people want to get as much one that are favoring the people that can solve

00:41:24.989 --> 00:41:27.219
multiple problems as opposed to only solve one problem.

00:41:28.150 --> 00:41:33.360
That that being said, two things are happening in Amazon that are both favorable

00:41:33.360 --> 00:41:38.270
and super interesting. But it's it's easy and somewhat convenient that they get completed. Right.

00:41:38.440 --> 00:41:41.770
So Amazon has always been somewhat big in grocery. But remember,

00:41:41.770 --> 00:41:47.219
grocery is a amorphous category. Pet food is grocery. Paper towels are grocery.

00:41:47.510 --> 00:41:49.100
Cleaning products are grocery.

00:41:49.440 --> 00:41:55.540
Arguably replenishable apparel like socks and underwear are grocery for many people. Right.

00:41:55.850 --> 00:42:01.050
And so when you think about Amazon's strengths, they've had some real,

00:42:01.050 --> 00:42:04.300
real strengths. Pet food in that grocery assortment.

00:42:04.620 --> 00:42:07.340
They've had some relative weaknesses like perishables.

00:42:08.080 --> 00:42:14.190
And so on one hand, Amazon is legitimately rapidly scaling their perishables

00:42:14.190 --> 00:42:18.550
at an unimaginable rate and props to them and congratulations to them for that.

00:42:20.239 --> 00:42:23.320
They get to quote huge growth over a tiny number.

00:42:23.560 --> 00:42:27.730
Yeah. Right. And so on one hand, if that's all they were talking about,

00:42:27.730 --> 00:42:29.370
I would kind of call them out on it.

00:42:30.410 --> 00:42:34.440
Their overall grocery is growing meaningful and they've always been a meaningfully

00:42:34.440 --> 00:42:38.060
sized grocer. And they, again, they bought whole foods, which is four or 5%

00:42:38.060 --> 00:42:40.760
of the grocery market by themselves. Right. So.

00:42:41.580 --> 00:42:45.699
The fact that they're still rapidly growing grocery and they're as big as they

00:42:45.699 --> 00:42:51.000
are is a testament to how they're winning the hearts and minds of consumers.

00:42:51.690 --> 00:42:57.040
Don't conflate the incredible speed of their perishable growth with the impressive

00:42:57.040 --> 00:43:02.430
speed of their overall grocery or, as people are increasingly coming to call

00:43:02.430 --> 00:43:03.890
it, their everyday essentials growth.

00:43:04.199 --> 00:43:07.550
This was your second year at this event, my first.

00:43:08.360 --> 00:43:11.810
I thought they all seemed pretty excited and energetic. Now,

00:43:12.060 --> 00:43:15.830
we're talking to the tippy-top of the crew there.

00:43:16.780 --> 00:43:20.060
You have a year-over-year comparison. Do you think they were more excited this

00:43:20.060 --> 00:43:22.410
year than last year? Were they more giddy?

00:43:24.010 --> 00:43:27.310
Jesse was giddy. I think they were very excited. I think they have more proof

00:43:27.310 --> 00:43:30.180
points this year. I think they knew what they had last year,

00:43:30.680 --> 00:43:35.489
but they didn't necessarily have the evidence that consumers were embracing what they had.

00:43:36.180 --> 00:43:40.469
And I have no idea what private conversations they had with their big bosses

00:43:40.469 --> 00:43:46.820
like Andy, Jesse, and Doug Harrington, but those guys weren't necessarily spending

00:43:46.820 --> 00:43:50.110
a lot of ink publicly talking about these initiatives, right?

00:43:50.110 --> 00:43:55.790
Now, you hear every senior executive at Amazon talking about a top initiative

00:43:55.790 --> 00:44:02.190
and a top success is the incredible growth they're having in Everyday Essentials and Perishables.

00:44:02.190 --> 00:44:07.810
And so I think I'm really happy for all these guys that are in the grocery space

00:44:07.810 --> 00:44:12.050
and the everyday essential space at Amazon because they, in some cases,

00:44:12.050 --> 00:44:16.010
have been plugging away in this space quietly for 20 years.

00:44:16.290 --> 00:44:20.110
And suddenly they're the most popular kid at the earnings call,

00:44:20.110 --> 00:44:25.510
right? And they have the best success metrics. And so totally rightfully so,

00:44:26.150 --> 00:44:27.830
it probably feels good to do that.

00:44:28.850 --> 00:44:32.250
I do, I get this. These are all really smart people. It's annoying.

00:44:32.250 --> 00:44:37.330
These big retailers, like how sort of impressive their teams are and how deep their benches are.

00:44:38.520 --> 00:44:43.080
I do think nobody's claiming victory yet. I think they're super happy with where

00:44:43.080 --> 00:44:45.750
they are. They're super happy with the trajectory and the momentum.

00:44:46.010 --> 00:44:51.680
But again, they're taking a swing at such a ginormous cam that I don't think

00:44:51.680 --> 00:44:55.469
any of them are going, check, we won that one. Let's move on to the next thing.

00:44:55.469 --> 00:44:58.460
I think they're all saying, how do we pour gas on this and do it even better?

00:44:59.110 --> 00:45:05.699
And one of the things I particularly admire about Amazon is they're a pretty self-critical true.

00:45:05.699 --> 00:45:09.540
Like when I've had candid conversations with them about things that I feel like

00:45:09.540 --> 00:45:12.080
are less than perfect in their offering or their experience,

00:45:12.760 --> 00:45:15.940
they're more critical about those things than I am. So we've covered,

00:45:15.940 --> 00:45:19.290
of the three pillars, we've covered selection and delivery speed.

00:45:20.080 --> 00:45:24.870
The third one is value. So, you know, part of this is they're competing with

00:45:24.870 --> 00:45:29.820
Walmart, whose whole thing is everyday low prices. So that's going to be,

00:45:30.120 --> 00:45:33.610
you know, a nice fight basically to get any value out of them.

00:45:34.570 --> 00:45:39.060
So to that point, there's a Profitero study. Profitero, I guess,

00:45:39.060 --> 00:45:41.570
has a basket that they monitor over time.

00:45:41.890 --> 00:45:48.080
And they basically say that they're the lowest priced retailer for nine years

00:45:48.080 --> 00:45:51.949
in a row, averaging 14% below other retailers.

00:45:52.580 --> 00:45:56.820
I don't think that's a grocery. I don't know if that's a grocery basket. I don't think it is.

00:45:58.030 --> 00:46:01.580
There's a lot of data though, even on grocery that says they're very competitive

00:46:01.580 --> 00:46:04.770
and many times they're kind of... They for sure are.

00:46:05.880 --> 00:46:09.300
A shout out to my good friends at Profitero. As most listeners will probably

00:46:09.300 --> 00:46:13.699
know, they're part of my pupus family. So I get to work with all those guys every day.

00:46:14.930 --> 00:46:20.030
They certainly enjoy it every year when Andy mentions them in their earnings calls.

00:46:22.090 --> 00:46:27.380
The art of measuring price is very difficult, and specifically grocery.

00:46:27.380 --> 00:46:31.199
Because, again, the 100 items the Wingo family buys are different than the 100

00:46:31.199 --> 00:46:36.160
items the Goldberg family buys are different than the 100 items most of our

00:46:36.160 --> 00:46:37.430
viewers are buying, right?

00:46:38.050 --> 00:46:41.750
And prices can be different in different parts of the country and through different

00:46:41.750 --> 00:46:43.600
fulfillment systems and all these things.

00:46:43.930 --> 00:46:48.690
So there's no perfect apples to apples, but there's a lot of third parties that

00:46:48.690 --> 00:46:51.250
do studies on a particular basket of groceries.

00:46:51.540 --> 00:46:55.510
And Walmart does, I'm sorry, Amazon does well at all of them.

00:46:56.050 --> 00:47:01.010
And they win a number of them, right? So they are for sure in the fight for,

00:47:01.510 --> 00:47:06.120
low prices. Of course, Walmart is always near the top of those lists.

00:47:06.290 --> 00:47:10.210
There are other grocers that have come to the U.S., Aldi, Lidl,

00:47:10.380 --> 00:47:16.219
that are also very excellent low-price operators. So there's a lot of competition for low price.

00:47:16.890 --> 00:47:20.570
I think one of the challenges and opportunities that Amazon uniquely has is

00:47:20.570 --> 00:47:22.080
they kind of have two brands.

00:47:22.500 --> 00:47:28.199
Amazon, I would argue, is an EDLP brand themselves, largely because of the marketplace.

00:47:28.199 --> 00:47:31.900
They've got 12 sellers all beating each other's brains out to get to the lowest

00:47:31.900 --> 00:47:34.820
price. and you get to see that fight in public and you get to see,

00:47:35.070 --> 00:47:37.060
see the lowest price on that buy box.

00:47:37.620 --> 00:47:41.570
I think most people are pretty confident. I'm never going to get wildly screwed on Amazon.

00:47:41.699 --> 00:47:44.580
Sometimes I'm going to get the lowest price, but I'm always going to get a pretty

00:47:44.580 --> 00:47:46.010
competitive, good price from

00:47:46.010 --> 00:47:51.560
Amazon. And so I would argue Amazon largely is in a strong EDLP brand.

00:47:52.690 --> 00:47:57.040
Whole Foods historically was not. Whole Foods is very overtly.

00:47:57.820 --> 00:48:02.699
Premium experience quality provider. Most people that aren't deep in the grocery

00:48:02.699 --> 00:48:06.910
space will totally underappreciate all the quality standards that Whole Foods

00:48:06.910 --> 00:48:09.310
has and all the vendors that they can make a fortune on

00:48:09.680 --> 00:48:13.980
that they refuse to sell because they don't meet the 300 health rules that Whole

00:48:13.980 --> 00:48:16.130
Foods has for every product in the store.

00:48:16.130 --> 00:48:21.590
So they're definitely a premium provider and they hate this,

00:48:21.730 --> 00:48:26.130
but they used to have a reputation for being an extremely expensive a premium provider.

00:48:26.130 --> 00:48:30.250
And so there are all these derogatory terms about whole paycheck and they've

00:48:30.280 --> 00:48:35.210
worked hard to reestablish themselves as a good value premium provider.

00:48:35.210 --> 00:48:38.130
And I think they mostly have been pretty successful with that.

00:48:38.130 --> 00:48:41.640
I think I hear a lot more narrative about them being overpriced,

00:48:42.300 --> 00:48:47.190
but they're not where you'd go if you wanted to stretch your dollar to the absolute farthest, right?

00:48:47.190 --> 00:48:51.390
I actually think they might be more competitive on those everyday essentials.

00:48:51.390 --> 00:48:54.920
And especially if you're focused on Whole Foods private brands on like-to-likes,

00:48:55.370 --> 00:48:59.330
they are definitely in the hunt-on price.

00:48:59.600 --> 00:49:06.410
But the problem is you can get a way better grade of beef there than you can at an Aldi.

00:49:06.410 --> 00:49:11.570
And so if you walk there and you suddenly see the best beef and decide you want

00:49:11.570 --> 00:49:14.350
to have the best beef for your family, you're going to end up spending more

00:49:14.350 --> 00:49:16.930
in a Whole Foods visit than you are in an Aldi visit.

00:49:16.930 --> 00:49:22.980
Not because Whole Foods is unfairly priced, but because they have more attractive, expensive stuff.

00:49:23.650 --> 00:49:31.180
And so, so I would say Whole Foods is never going to be the rock bottom competitor to Aldi.

00:49:31.620 --> 00:49:37.000
Amazon probably can be close to that, right? And so if Amazon can thread the

00:49:37.000 --> 00:49:41.850
needle with these grocery offerings, they can keep the premium cachet of Whole Foods as a.

00:49:42.699 --> 00:49:49.030
A good value for a premium product and they can position amazon as a really

00:49:49.030 --> 00:49:53.360
competitive everyday low price provider but i i think that's a hard it's a hard

00:49:53.360 --> 00:49:55.110
thing to do both of those under one roof,

00:49:55.739 --> 00:49:59.340
yeah one little sidebar since you bought a private label i thought was interesting

00:49:59.340 --> 00:50:03.640
was they did have one of the ladies that runs that and i thought she was excellent

00:50:04.020 --> 00:50:07.860
you know when she started they had this like massive portfolio of private brands

00:50:08.219 --> 00:50:12.640
this is like not amazon prime this is like within the grocery segment, the consumables.

00:50:13.050 --> 00:50:17.600
And they've consolidated that into five. So they've got 365,

00:50:17.600 --> 00:50:19.440
which is the one they inherited from Whole Foods.

00:50:19.690 --> 00:50:22.900
They've got Whole Foods Market, Whole Foods Market Kitchens,

00:50:23.239 --> 00:50:26.969
which maybe they could consolidate that one. I guess one's prepared meals and one isn't.

00:50:27.520 --> 00:50:32.810
Amazon Grocery and Amazon Saver. And so they've kind of compressed those into

00:50:32.810 --> 00:50:34.850
their lanes and are working on that.

00:50:35.840 --> 00:50:42.330
They, most of the, most of that Amazon grocery and Amazon Saver is this $5 under type stuff.

00:50:43.310 --> 00:50:47.440
Let's see. Then they also have a little accelerator fund where they try to get

00:50:47.440 --> 00:50:51.500
more entrepreneurs into the stores and, and basically fund them to bring in,

00:50:51.990 --> 00:50:55.250
interesting new things that fit the new taste profiles that are going on.

00:50:55.270 --> 00:50:56.370
I thought that was kind of interesting.

00:50:56.950 --> 00:51:00.410
I think one of the fun things about grocery, and I think Whole Foods in particular is good at this.

00:51:00.960 --> 00:51:04.690
In so many categories, I talk a lot in parallel about a Shein,

00:51:04.890 --> 00:51:07.840
right? And they kind of broke the traditional model.

00:51:08.070 --> 00:51:11.780
Instead of convincing the whole world what to wear and then making that,

00:51:12.210 --> 00:51:16.010
they just listen to what people want to wear on TikTok and they make it super quick.

00:51:16.370 --> 00:51:22.450
So instead of creating demand for a product, they detect the demand and fulfill

00:51:22.450 --> 00:51:23.760
the demand really quickly.

00:51:24.010 --> 00:51:27.530
And in most categories, that's almost impossible to do because we all have these

00:51:27.830 --> 00:51:29.630
super long supply chains.

00:51:30.410 --> 00:51:35.070
But one category where you kind of can do it is in consumables.

00:51:35.500 --> 00:51:39.050
Like you have to make the milk within 21 days of drinking the milk,

00:51:39.160 --> 00:51:45.220
right? So there's not an 18 month supply chain for milk and the supply chain

00:51:45.220 --> 00:51:49.120
varies for different foods with like different level of processing and all these things.

00:51:49.490 --> 00:51:53.530
But there's the food chain, the supply chains for food is a lot faster and more

00:51:53.530 --> 00:51:56.770
agile in most cases than many other product categories.

00:51:57.030 --> 00:52:02.020
And the raw ingredients to make recipes are always available.

00:52:02.210 --> 00:52:07.750
So one thing Whole Foods can do is they can detect all these new trends in food

00:52:07.750 --> 00:52:09.180
and how people are eating.

00:52:09.830 --> 00:52:12.970
The biggest one right now, this one's not going to seem like a micro trend,

00:52:12.970 --> 00:52:17.210
but like largely because of the GLP ones and everyone's health consciousness,

00:52:17.570 --> 00:52:20.900
creatine and protein are huge trends right now.

00:52:21.320 --> 00:52:26.300
Whole Foods has always sold great proteins and creatine, but you can bet those

00:52:26.300 --> 00:52:28.710
products are moving to the front of the store right now, right?

00:52:28.710 --> 00:52:33.610
Like you can bet the merchandising strategies and the digital shelves are all

00:52:34.050 --> 00:52:37.980
prominently featuring these on-trend food items, right?

00:52:37.980 --> 00:52:42.490
And so I would say every grocer tries to do this. Whole Foods is a particularly

00:52:42.490 --> 00:52:47.940
good practitioner of recognizing these niche trend, food trends early.

00:52:48.360 --> 00:52:51.810
And one of the things that's a legacy of Whole Foods, even before Amazon captured

00:52:51.810 --> 00:52:57.590
them, is Whole Foods, although they were a national chain, didn't try to respond to national trends.

00:52:57.910 --> 00:53:01.940
They empowered every store manager to respond to the local trends.

00:53:01.940 --> 00:53:06.560
And the food trends in Seattle are very different than the food trends in Austin.

00:53:07.020 --> 00:53:11.820
And so I feel like a lot of that legacy still exists in there.

00:53:11.940 --> 00:53:17.680
It's been scaled and centralized a little bit more today, but I think they're

00:53:17.680 --> 00:53:21.080
pretty good at the trend watching and the trend responding.

00:53:21.640 --> 00:53:26.250
Hey, everybody. It is Scot again. Thanks for listening to part one of our two-part

00:53:26.590 --> 00:53:29.670
deep dive into grocery through an Amazon list.

00:53:30.340 --> 00:53:34.380
As a reminder, this now concludes part one. Coming soon in part two,

00:53:34.380 --> 00:53:40.870
we will cover the rest of the conversation where we go over how does Prime impact Amazon Grocery?

00:53:41.960 --> 00:53:46.750
Drones, what more do you need to say? Amazon versus ChatGVT.

00:53:47.390 --> 00:53:54.650
And which AI agent is going to own your life context and why does that matter for going forward?

00:53:55.710 --> 00:53:59.000
We hope you enjoyed part one. Part two is on the way shortly. Stay tuned.

00:53:59.740 --> 00:54:04.120
You've been listening to The Jason and Scot Show. For all the latest news and

00:54:04.120 --> 00:54:11.160
trends on e-commerce and shopper marketing, subscribe to us in iTunes or visit jasonandscot.com.