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Source: Amazon Go

Amazon’s Second Act

Philip Dhingra
Dec 12, 2017 · 6 min read

Analysts are still scratching their head over Amazon’s $13.7 billion purchase of Whole Foods, and yet if we read Jeff Bezos own words and apply a little bit of banality to futurism, the plan is obvious.

Amazon has saturated the business of bringing products to people. The next step will be in bringing people to products

There is a whole world of consumption where people voluntarily get into cars, brave traffic, navigate complex stores, and deal with apathetic workers, just to get something they want, right now. In Colombia, there is a courier app that delivers bodega-like food items in minutes. Prime Now and Instacart offer same-day delivery, but that’s not fast enough when you’re hungry right now. Maybe Amazon will bottle up what’s happening in Colombia, or maybe they won’t. But if you’re hedging your bets, and assume you can’t win the delivery game, what’s the next best thing? Bring people to products.

The endgame for Amazon is to have Whole Foods-selection with Trader Joe’s-prices in a shopping experience as seamless as Prime and delivered to you at rickshaw speeds

Whole Foods’s growth was plateauing when Amazon acquired them. And yet, a walk into a Whole Foods isn’t a vision of a plateauing marketplace, but instead one of consumer vanguard. These are the shoppers Bezos wants. Whole Foods shoppers are some of the most profitable. And yet, Whole Foods is still bogged down by 20th-century logistics and shopping experiences. Why aren’t self-driving trucks delivering groceries to Whole Foods? Why aren’t the products on the shelves relocating themselves in real-time with AI-informed analytics? Why does anybody spend any time in a checkout line? While technology was supposed to disrupt shopping with e-commerce, offline shopping remains the same as it was 100 years ago. The goal for Amazon is to turn more of the world into Whole Foods shoppers.

Where is the Whole Foods of Pharmacies? Where is the Whole Foods of Consumer Electronics? Best Buy isn’t it. CVS isn’t it.

Other Predictions

Amazon may lose the arms race against fake reviews

Could people “cut the cord” between Prime streaming and Prime delivery?

Not all grocers are idiots

Whole Foods was a competitor to Prime before Amazon scooped them up

Creating a Grocery API or Amazon Grocery Services is a second-tier concern

People don’t understand what Amazon is. It’s not a vertically-integrated company, nor is it a horizontally-integrated one. It’s not one thing. It’s more of a chaotic conglomerate. Some of the departments have synergies, some don’t. To Bezos, corporate structure is only important inasmuch as it drives growth, growth, growth. If it were 1900, he would try to grow the company through railroads and mail-order catalogs. He’s agnostic. It just so happens that tech is the ultimate tool for growth, and so in that regard, Amazon is a tech company. Bezos didn’t have to create a tech company. But if you want to scale the way Amazon does, you have to become one. This is why Amazon will continue to tap the same opportunities for growth it always had. It’s not that Amazon is lazy and can’t think of old ideas, it’s that those areas (instant gratification, frictionless processes, and addictive user experiences) are uniquely exploitable with tech in 2018 as they were in 1998.

Philip Dhingra

Written by

Co-founder of Titan Seal, a Blockchain startup. Author of Dear Hannah, a cautionary tale about self-improvement.