Amazon 4-Star: Books, ereaders, and a whole lot more

[fjtorres]

Originally Posted by rcentros

If you say so. I think it's telling that one of the high growth sectors in business is for dollar stores and pay-day loans. Catering to the high-end may have a short shelf life.

Yes. And what's wrong with that?
Again: I said ramp-up.
Short term.

The whole point is that building a chain of B&M stores is expensive and at this point in time, risky. So you *start* in high-probability locations targeting those affluent enough to buy your products.
That is for today.
Tomorrow they'll do what makes sense then.
In the meantime they are using modern technology and modern processes to move product.
Instead of dated old-school approaches.

When WalMart started, there were no dollar stores by the hundred and no global-reach online "supermall" named Amazon.com or eBay. And their logistics system was the best in the world.
At that time, aiming low in small towns made perfect sense. Big urban areas were saturated with malls both big and small.
But that market is well-served today (by Walmart and Amazon, among many) plus consumer behavior has changed. A contrarian approach of going where the discretionary spending is makes plenty of sense. Instead of taking Walmart on directly, they are going where "they ain't" . Wee Willie Keeler would be proud of them.

Look where Amazon is dropping their stores in NYC: Hudson Yards, Soho...
Those are hardly places were dollar store merchandise is a big draw. Or Walmart. And the only payday loans you'll find in demand there are billed as "advance against sales".

If you're going into Soho, you're aiming at a fairly affluent consumer.

https://www.point2homes.com/US/Neigh...ographics.html

Are these the demographics of a dollarstore customer?

Average Household Income $141,313
Median Household Income $75,412
Percent Increase/Decrease in Income Since 2000 56%
Percent Increase/Decrease in Income Since 2010 7%
Average Household Net Worth $1,108,237
Median Home Sale Price $2,381,250
Sales Tax Rate 8.875%
Average Household Total Expenditure $90,673

We can run the same drill for pretty much every AmazonBooks and Amazon Go location and come up with comparable numbers.

They're cherry picking.
Now.
Later?
We'll see what they're doing in five years.
No law says they have to do today what they'll do tomorrow.

[rcentros]

Originally Posted by fjtorres

In the meantime they are using modern technology and modern processes to move product.

What makes you think Walmart and Kroger (and others) aren't upgrading their technology as well? Walmart.com is building (or has built) huge distribution centers (just like Amazon) in several locations. That's so they can compete with Amazon on Amazon's "home turf." Meanwhile Amazon's move into B&M puts them in Walmart's wheelhouse. And Walmart is pretty good at B&M.

[fjtorres]

Originally Posted by rcentros

What makes you think Walmart and Kroger (and others) aren't upgrading their technology as well? Walmart.com is building (or has built) huge distribution centers (just like Amazon) in several locations. That's so they can compete with Amazon on Amazon's "home turf." Meanwhile Amazon's move into B&M puts them in Walmart's wheelhouse. And Walmart is pretty good at B&M.

But Amazon isn't playing in WalMart's territory.
They are purposefully avoiding it.
Walmart doesn't own all B&M nor do they compete with everybody and everything. Neither does Amazon.

Walmart doesn't even compete much with Whole Paycheck.
The retail world isn't one vast lumpen proletariat. It is a collection of markets, each segmented by income, expectations, and location.

Walmart has their "wheelhouse", Amazon has theirs. So does Zara, and Target, and Best Buy, and Home depot. Some overlap, some don't. Some are low margin (books!) and some are high margin (luxury goods).

Amazon got their start in books but they have long since moved past that.It's a legacy business at this point. A drop in the bucket but a drop nonetheless. Its a steady, low-maintenance, mostly flat revenue stream. As long as it's low maintenance, they'll keep at it: low maintenance justifies low margin.

B&M is anything but low maintenance so it doesn't make sense to go after the low end today unless you already have a giant presence. Amazon's presence is low so going higher end makes more sense.

Note that Walmart for years has been trying to move upscale with little success so they've resorted to buying niche players. That is expensive market share they're buying.

If Amazon wanted to, they could go out and buy out any of several established chains. A trillion buck market cap goes a long way. But that too is expensive market share. They're in no rush after buying the modest Whole Foods chain so it makes more sense to grow slowly and, ahem, organically.

Let Walmart make their rush catchup moves. Amazon is still growing faster. Plus, again, retail is but a part of the Amazon Consortium. Their big money comes from AWS and soon, Lab126. That is why the stock keeps rolling merrily along. Bookshops and gift shops are doodling on the margins. Side bets.

When Walmart and co get into the tech business, say building robots, that's when they'll
be encroaching on Amazon turf. Untik then, they're still playing last century retail games while Amazon keeps playing the ecosystem game with Prime and Alexa.

[DuckieTigger]

Originally Posted by fjtorres

B&M is anything but low maintenance so it doesn't make sense to go after the low end today unless you already have a giant presence. Amazon's presence is low so going higher end makes more sense.

That depends on what Amazon is doing with the higher end market. Or rather what brand new technology they are developing behind the scenes. High maintenance turns into low maintenance in a real hurry when you automate it correctly. Once the algorithms are revealed, no competitor will be able to compete on a level playing field due to missing data. A 4-Star Walmart would be a dream come true to add a small footprint Walmart and only add the best sellers, best rated items. Except Walmart doesn't work like that as they depend on having brand name items next to generic items.

What can Amazon develop and conveniently test drive in Whole Foods, for example? An automatically stay stocked pantry with all your personal essentials on a budget (not necessarily cheap, but as in fixed cost per month). Now then shopping you could simply pick up a steak and whatever else you need for it is already at home.

[rcentros]

Originally Posted by fjtorres

Note that Walmart for years has been trying to move upscale with little success so they've resorted to buying niche players. That is expensive market share they're buying.

There may be some big changes coming soon from Walmart. According to my younger brother (who is a programmer, not for Walmart) there are all kinds of programming jobs involving Walmart. Supposedly they're getting rid of cashiers and will have only self-check out. I don't how soon (or whether it's just a rumor) but, apparently, Walmart (or their contractors) are looking for a lot of programmers right now.

[fjtorres]

More 4Stars coming, to other upscale areas:

https://www.cnet.com/news/amazon-to-...o-denver-area/

Amazon said it'll open its second 4-star location on Thursday, placing it in the Park Meadows mall in Lone Tree, Colorado, just south of Denver.

Amazon 4-star stores only include products that are rated 4 stars and above, are top sellers, or are new and trending on Amazon's website. The online retailer in September opened its first 4-star in Manhattan and has already announced plans for a location in Berkeley, California.

Same mix of books, gadgets, and gifts.

As for the Mall location:

median income for a household in the city was $96,308, and the median income for a family was $109,003. Males had a median income of $90,690 versus $43,125 for females. The per capita income for the city was $46,287. About 1.2% of families and 1.4% of the population were below the poverty line, including 1.5% of those under age 18 and 3.7% of those age 65 or over.

In 2014, the population of Lone Tree, Colorado was 12,779 people. Lone Tree is part of one of the fastest growing areas in Colorado, being in Douglas County and South Metro Denver.

https://en.m.wikipedia.org/wiki/Lone_Tree,_Colorado

More at the sources.

The Berkeley store:

https://www.amazon.com/b/ref=s9_acss...et-vig-news-20