Amazon is buying more than groceries with Whole Foods — it’s also getting more than 400 stores to use as delivery hubs

Prime real estate for Jeff Bezos.

Amazon’s $ 14 billion deal for Whole Foods gives it more than just groceries. It also gets it crucial real estate it needs to accelerate its delivery operations.

Amazon took a big leap into the grocery industry when it announced its intention to buy Whole Foods for $ 14 billion.

But the deal gives Jeff Bezos something else he craves: More than 400 brick-and-mortar stores that could also serve as same-day delivery hubs, especially in urban centers.

In its ongoing quest to put packages on customer steps as quickly as possible, Amazon has rolled out one-hour delivery in dozens of cities through its Prime Now service.

But there’s a very big obstacle to making the economics work for that business: Finding, and paying for, enough warehouse real estate to cover as many areas of a city as possible to increase delivery efficiency.

This deal could help long-term in this way, even if it’s just to store and supplement the fresh grocery component of Prime Now, which has a relatively small selection today.

Let’s be clear: The main reason to do this deal is because Amazon has been struggling to crack the $ 800 billion grocery market in the U.S. for going on a decade. Whether Whole Foods becomes the backbone of the AmazonFresh grocery delivery service remains to be seen.

The real estate, however, is nice icing on the cake.


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Amazon CEO Jeff Bezos Needs Your Ideas For a New Philanthropic Endeavor

 

Serial entrepreneur Jeff Bezos needs your help. He recently took to Twitter to post a message about a predicament he’s currently facing; he is crowdsourcing for a new philanthropic idea.

“I’m thinking I want much of my philanthropic activity to be helping people in the here and now — short term — at the intersection of urgent need and lasting impact,” Bezos wrote in the tweet. It seems like the Amazon CEO was inspired by the philanthropic work done at Mary’s Place in Seattle.

Bezos admitted that much of his time is currently occupied by long-term innovation, as can be seen in his work with Blue Origin. His private space company is currently working on improving its rocket technology as it builds the New Glenn, it’s biggest one yet. The plan, Bezos revealed previously, is to colonize the Solar System, which is obviously a long-term endeavor.

Bezos also has projects that bring long-term ambition into the here and now. One example of this is how Amazon is redefining the retail experience with its unmanned stores. It’s a product of how Amazon has been using artificial intelligence (AI), an advanced and quickly developing technology, to influence business in the present.

As for Bezos’ new philanthropic idea, one can say that whatever positive changes it could make in the here and now could give people a shot at a better future. And hey, you can even get involved and pitch in an idea or two.

The post Amazon CEO Jeff Bezos Needs Your Ideas For a New Philanthropic Endeavor appeared first on Futurism.

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Big sales on the Amazon Echo, Samsung Chromebook, and more of the week’s best tech deals

Remember when everyone was panicking for last-minute Mother’s Day gifts back in May? Well, it’s time to do that all over again for Father’s Day — which, in case you forgot, is tomorrow, June 18th. It’s probably too late to order something that’ll arrive in time, but maybe you can try wrapping a photo of the gift? Or a receipt with a tracking number?

Our favorite deals this week include discounts on two smart speakers: $ 40 off Amazon Echo and $ 20 off Google Home. After all, when it comes to speakers, it’s price above all, right?

Deals ending soon

  • Amazon devices deals: You have until 11:59PM ET tonight (Saturday) to take advantage of Amazon’s Father’s Day promotions on their best devices (no restrictions apply). Highlights include $ 40…

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Amazon used to be worth about half of Whole Foods

Now look at it.

Amazon’s acquisition of Whole Foods is its biggest buy yet. It’s also a deal that would never have been possible when Amazon went public 20 years ago. At the time, Amazon was worth $ 505 million, whereas high-end supermarket Whole Foods was valued at $ 824 million, according to data from FactSet.

The two companies’ market capitalization remained somewhat comparable through Amazon’s first decade as a public company. Then, in 2009, Amazon’s value began to take off as the online retailer gobbled up market share from traditional brick and mortar retailers. These days, Whole Foods, with a market cap of $ 13.4 billion, looks like a bargain compared to Amazon, worth $ 475 billion.

Already today, Amazon’s market cap has increased $ 15 billion — it closed yesterday at $ 460 billion and is currently $ 475 billion — meaning it’s already paid for the $ 13.7 billion acquisition of Whole Foods.


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The future of food: Some thoughts on Amazon buying Whole Foods


Amazon said it would pay $ 42 per share, or $ 13.7 billion, to purchase Austin-based high-end grocery chain Whole Foods. This is the kind of deal where you see it, experience a moment of surprise and then move straight to nodding your head thinking, of course.

Amazon is no stranger to food, nor is it a stranger to brick-and-mortar retail. It has dipped its toe in the brick and mortar world with bookstores in Seattle and New York. It has played around with fresh food and groceries with a host of buying options on its site and through services like Amazon Fresh. In the last year, it has tried out a grocery store stocked with cameras and AI instead of employees. It has also experimented with letting people order food online and pick it up at participating grocers.

Meanwhile, it made the Dash wand that lets people scan their food and verbally re-order products virtually free to Prime members the same week it announced a deal to buy a grocery chain with 465 stores nationwide.

Yes, Amazon wants in on food and the kitchen. This has been evident for a while.

But the real question is why. I’ve been working on stories about food and the web for more than five years. There are huge opportunities that technology can offer that go well beyond selling people a basic necessity. Two that come readily to mind are improving the food supply chain and improving people’s health by directing them to well-prepared healthier foods. Both of these fall in line with Whole Foods’ mission.

People have to eat. And when considering food, there are five different areas where tech firms have opportunities. The first step is inventory, which includes knowing what people have and fulfillment when it’s gone. The second is recipe generation, which means taking what people have on hand and helping them figure out what to do with it. Third is preparation, an area where the big appliance companies and a few startups like Anova (which was acquired by Electrolux), Drop and June are offering products.

The fourth area is consumption, where we don’t actually need a lot of tech intervention, although startups like Blue Apron and Juicero are thinking about ways to influence what we consume, and thus change what we eat and how it’s supplied. Finally, for some people there is tracking, the act of logging what we eat for fitness and health purposes. MyFitnessPal (UnderArmor) and Fitbit are some of the startups trying to take data from this segment and use it to influence recipe generation and what is stocked in the kitchen.

With tools like Amazon Alexa tied to kitchen appliances or Amazon Dash Replenishment services, Amazon is going to have a good idea of what people are eating, preparing and buying. Because the goal for Amazon is to ensure that commerce remains as frictionless as possible, control of food fulfillment means Amazon gets a direct play in inventory and recipe generation. At the moment it has less of a role in food prep, consumption and tracking, although it has links to these thanks to Skills on the Amazon Echo.

So in the not-too-distant future, it’s possible that if you buy a pre-prepared meal from Whole Foods, you might be able to scan a barcode on top and have Alexa tell your GE oven how to optimally heat it. That same data might also go straight to your food tracking app of choice. Or, a camera that Amazon has trained to understand what a zucchini looks like so you can automatically check out at the grocery store might also find it’s way into an Echo Look kept in the kitchen. Then when you pull out that zucchini you might get recipe options. (Plus Amazon can send any necessary options to you using Prime Now, its same-day delivery service.)

For Amazon, this acquisition offers it a foothold in fresh food. It also offers Amazon insights into what people buy. While Google is focused on getting search data and cataloging the world’s information, Amazon is focused on getting people to make a purchase. If you’re in the market to sell people stuff, data on their actual buying trends is going to be far better for making recommendations than knowing what they are talking about and searching.

Stacey on IoT | Internet of Things news and analysis

How Amazon Will Take Over the Grocery Industry

Amazon announced on Friday that it will acquire Whole Foods Market for $ 13.7 billion, a move that will give the tech giant a network of 456 physical stores. But even beyond giving Amazon an established real-world presence, it’s not hard to see how the move will help the company further its goals of taking over the grocery industry.

Distribution

Firstly: distribution. As Slate’s Daniel Gross points out, Amazon just purchased a large network of distribution nodes in prime, upper-income locations. Amazon could obviously use its newly acquired Whole Foods locations as physical outlets for users to pick up or drop off orders made through its web platform, even for products that stretch beyond groceries. That’s a good theory, but — despite the headline of that article — it’s probably not Amazon’s “endgame.” While it’s hard to say anything for sure at this point, I’d venture that Amazon’s ultimate goal is much, much larger than that.

Technology

Take into account Amazon Go, the company’s utopian vision for a grocery store of the future — walk in, pick up the items that you need, and simply walk out without needing to stand in line. With this in mind, it’s easy to see that Amazon just purchased a network of physical infrastructure to apply its Amazon Go technology. It doesn’t have to build brick-and-mortar stores, it can simply apply its system to the existing outlets — many of which are placed, as previously mentioned, in excellent retail locations.

But to see where Amazon could take this, we have to look at Amazon Web Services. The massive cloud-computing platform is the company’s most profitable business, as they collect billions in revenue by way of licensing the cloud technology to other companies and organizations — among them Netflix, Reddit, Dropbox and Pinterest. With this business model in context, it’s not too much of a stretch to see where Amazon could be going with its Whole Foods purchase.

A Recipe for Market Domination

All the company has to do is outfit the newly acquired Whole Foods locations with its Amazon Go technology. This — along with Amazon’s ability to bring down prices aggressively — could revitalize the organic grocery store chain, which has been flailing in the wake of losing a huge swath of its customer base. From here, after proving the concept, all the company has to do is wait as consumers gain an expectation of what the future of retail shopping should look like.

After that, Amazon can just license its patented technology to just about everyone, like it does with AWS — particularly local grocery chains and retail stores which lack the resources to outfit their stores with similar tech. And it’s not just groceries: applied on a larger scale, similar technology could be used across the entire retail industry. That may be a lofty and startlingly ambitious goal, but it’s still within the realm of reality — and it seems all the more likely with the Whole Foods acquisition taken into account. Of course, this is just a theory, so we’ll have to wait and see if Amazon actually takes that step toward retail — and perhaps world — domination.

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Look what happened to grocery stocks after Amazon announced it’s buying Whole Foods

Their stock isn’t looking so fresh.

Amazon’s acquisition of Whole Foods is great for Whole Foods and bad for every other supermarket. The $ 13.7 billion deal — Amazon’s biggest buy yet — has sent Whole Foods’ stock up $ 9 or 28 percent today, compared with yesterday’s closing price.

For contrast, Costco’s stock is down $ 10 or nearly 6 percent. Stock prices are also down for Kroger, Walmart, Target and SuperValu.


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