June 26, 2017


Amazon Robots Poised to Revamp How Whole Foods Runs Warehouses (Spencer Soper and Alex Sherman, 6/26/17, Bloomberg)

In negotiations, Amazon spent a lot of time analyzing Whole Foods' distribution technology, pointing to a possible way in which the company sees the most immediate opportunities to reduce costs, said a person familiar with the matter who asked not to be identified because the issue was private. Amazon, through a spokesman, declined to comment, as did Whole Foods.

Experts say the most immediate changes would likely be in warehouses that customers never see. That suggests the jobs that could be affected the earliest would be in the warehouses, where products from suppliers await transport to store shelves, said Gary Hawkins, CEO of the Center for Advancing Retail and Technology, a Los Angeles nonprofit that helps retailers and brands innovate. As Amazon looks to automate distribution, cashiers will be safe-- for now.

"The easiest place for Amazon to bring its expertise to bear is in the warehouses, because that's where Amazon really excels," Hawkins said. "If they can reduce costs, they can show that on the store shelves and move Whole Foods away from the Whole Paycheck image."

Amazon sees automation as a key strategic advantage in its overall grocery strategy, according to company documents reviewed by Bloomberg before the Whole Foods acquisition was announced.

Whole Foods has 11 distribution centers specializing in perishable foods that serve its stores. It also has seafood processing plants, kitchens and bakeries that supply prepared food to each location. Those are the places where Amazon could initially focus, according to experts.

Amazon has its own network of warehouses around the country with an abundant assortment of goods, and there are thousands of robots in those facilities. As Amazon's business has grown, its warehouses have become more specialized. Most inventory is in its largest warehouses within driving distance of big cities, but as it tries to deliver products faster, the company is utilizing smaller delivery hubs in cities packed with the kind of products people want quickly, like a phone charger or a toothbrush you forgot to pack on a trip. 

I'd been wanting one of vacuum stainless steel water bottles, but $40 for the Hydro Flask 32oz seemed pricey.  There's a sale right now on the comparable Portable Human version for $25.  Ordered it Saturday morning and received it Sunday morning with Prime member shipping.  

It's not possible to overstate deflation.

Posted by at June 26, 2017 1:10 PM