What Amazon buying Whole Foods could mean for small businesses
It’s taken down bookstores and shopping malls, but it’s hungry for more. Amazon’s latest conquest? Supermarkets. How will this seismic shift in the grocery industry affect independent and regional grocers?
The online retail giant announced Friday that it is purchasing Whole Foods for $13.4 billion. Amazon’s entry into the $800 billion grocery business could mean a total transformation of the industry.
In hot water
Whole Foods, under fire from investors due to low stock prices, has been taking strides to liberate itself from a leadership team CEO John Mackey irreverently referred to as “greedy bastards.”
In the last month, the upscale grocery chain has replaced several board members and implemented plans to cut costs and improve operations.
Under Amazon’s ownership, Whole Foods has a shot not only at recovery, but at industry dominance.
Whole Foods is known for its organic, fresh foods (and high prices). Amazon, known for its technological expertise and convenience is already killing it in the grocery biz. Snapping up Whole Foods will make both companies stronger–Amazon gets that whole locally grown vibe, Whole Foods gets that money and tech power.
Not to mention this deal expands Amazon’s brick-and-mortar presence.
Amazon’s grocery delivery service has been limited by its scarce number of physical stores–it currently has only a few AmazonFresh locations in Seattle.
Access to freshness
With Whole Foods, Amazon will own more than 460 stores in the U.S., Canada and Britain, bringing them within 90 minutes of as many people as possible. This enables a new era of fresh grocery shopping, where shoppers everywhere can order ahead and pick up at a nearby store, or have their fresh groceries delivered to them within the hour.
Shipping fresh groceries to the home has been proven successful by companies like Blue Apron and HelloFresh.
Amazon has the resources and experience to do what these meal-kit delivery services do on a much larger scale, much more efficiently. Can they pull it off? The general consensus seems to be yes: after Amazon announced the deal, their shares soared while competing retailers like Target, Walmart and Costco experienced substantial drops.
Why it could be bad news
Independent grocers already have to compete with large chains like Walmart, Target and Costco, and recent mergers like Albertsons-Safeway and Ahold-Delhaize joined more than 4000 grocery stores, giving these small stores even more giants to battle. With the Amazon-Whole Foods monster, these traditional grocers now join the many brick-and-mortar retailers who have been struggling to compete with Amazon for years.
Another potential threat is Instacart, the grocery delivery startup that Whole Foods currently owns a small percentage of.
According to an insider, Instacart intends to buy back the small percentage Whole Foods owns, making the startup a target for acquisition, possibly from Walmart, Target or Costco. This could lead to more consolidation within the grocery industry, pushing smaller names out and increasing barrier to entry.
Why it could be good news
With 52 million Americans currently grocery shopping online, other grocery chains will likely up their digital transformation efforts in order to compete. Who will they turn to for help? How about Amazon’s top digital rival?
Back in 2013, Google made a move against Amazon with Google Shopping Express, partnering with several grocers including Costco, Target, and none other than Whole Foods.
With Amazon ownership, it’s likely Whole Foods will remove itself from Google deliveries. This will leave Google in search of more foods store partnerships, spelling opportunity for smaller grocers with little online presence.
Should Whole Foods transfer its delivery services, Google may turn to smaller grocery stores to make up for that lost inventory.
With Amazon commanding all the mega grocery chains, Google could snag the niche market of local businesses.
When it comes to fresh produce, these little guys often do it best, and when it comes to digital, well, Google knows a thing or two.
While the exact future of the grocery industry remains uncertain, one thing is for sure: eventually, long checkout lines with overflowing carts will be as obsolete as horse-drawn carriages.
Chasing Clubhouse success? How the audio chat room trend affects products
(BUSINESS NEWS) It is inevitable that when a new successful trend comes along, other companies will try to make lightning strike twice. Will the audio chat room catch on?
Businesses are always about the hot new thing. People are the always looking for the easiest dollar with the least amount of effort these days. It tends to lead to products that are shoddy and horribly maintained with the least amount of flexibility in pleasing their customers. However, you also have to look at the customer base for this as well. You follow where the money is because that’s where its being spent. It’s like a merry-go-round, constantly chasing the next thing. And the latest of these is the audio chat room.
During the pandemic the entire world saw an eruption of social audio investments. Silicon Valley has gone crazy with this new endeavor. On the 18th of April this year, Clubhouse said it closed on some new funding, which was valued at $4 billion for a live audio app. This thing is still in beta without a single penny of revenue!
The list of other companies who have pursued new audio suites (either through purchase or creation) include:
This whole new audio fad is still in its infancy. These social media and tech giants are all jumping headlong into it with who knows how much forethought. A number of them have their own issues to deal with, but they’ve put things aside to try and grab these audio chat room coattails that are running by. It’s a mix of feelings about the situation honestly. They are trying to survive and keep their customers.
If a competitor creates this new capability and they stay stagnant then they lose customers. If they do this however without dealing with their current issues then they could also lose people. It’s an interesting catch 22 for people out there. Which group do you fall in? Are you antsy for a new toy or are you waiting for one of these lovely sites to fix a problem? It’s another day in capitalism.
This web platform for cannabis is blowing up online distribution
(BUSINESS NEWS) Dutchie, a website platform for cannabis companies, just octupled in value. Here’s what that means for the online growth of cannabis distribution.
The cannabis industry has, for the most part, blossomed in the past few years, managing to hit only a few major snags along the way. One of those snags is the issue of payment processing, an issue compounded by predominantly cash-only transactions. Dutchie, a Bend, Oregon company, has helped mitigate that issue—and it just raised a ton of money.
Technically, Dutchie is a jack-of-all-trades service that creates and hosts websites for dispensaries, tracks product, processes orders, keeps stock of revenue, and so much more. While it was valued at around $200 million as recently as summer of 2020, a round of series C funding currently puts the company at around $1.7 billion—approximately 8 times its worth a mere 8 months ago.
There are a few reasons behind Dutchie’s newfound momentum. For starters, the pandemic made cannabis products a lot more accessible—and desirable—in states in which the sale of cannabis is legal. The ensuing surge of customers and demand certainly didn’t hurt the platform, especially given that Dutchie is largely responsible for keeping things on track during some of the more chaotic months for dispensaries.
Several states in which the sale of cannabis was illegal also voted to legalize recreational use, giving Dutchie even more stomping ground than they had prior to the lockdown.
Dutchie also recently took on 2 separate companies and their associated employees, effectively doubling their current staff. The companies are Greenbits—a resource planning group—and Leaflogix, which is a point-of-sale platform. With these two additions to their compendium, Dutchie can operate as even more of an all-in-one suite, which absolutely contributes to its value as a company.
Ross Lipson, who is Dutchie’s co-founder and current CEO, is fairly dismissive of investment opportunities for the public at the moment, saying he instead prefers to stay “focused with what’s on our plate” for the time being. However, he also appears open to the possibility of going public via an acquisition company.
“We look at how this decision brings value to the dispensary and the customer,” says Lipson. “If it brings value, we’d embark on that decision.”
For now, Dutchie remains the ipso facto king of cannabis distribution and sales—and they don’t show any plans to slow down any time soon.
Ford adopts flexible working from home schedule for over 30k employees
(BUSINESS NEWS) Ford Motor Co. is allowing employees to continue working from home even after the pandemic winds down. Is this the beginning of a trend for auto companies?
The pandemic has greatly transformed our lives. For the most part, learning is being conducted online. At one point, interacting with others was pretty much non-existent. Working in the office shifted significantly to working remotely, and it seems like working from home might not go away anytime soon.
As things slowly get back to a new “normal”, will things change again? Well, one thing is sure. Working from home will be a permanent thing for some people as more companies opt to continue letting people work remotely.
And, the most recent company on the list to do this is Ford Motor Co. Even after the pandemic winds down, Ford will allow more than 30,000 employees already working from home to continue doing so.
Last week, the automaker giant announced its “flexible hybrid model” schedule to its staff. The new schedule is set to start in the summer, and employees can choose to work remotely and come into the office for tasks that require face-to-face collaborations, such as meetings and group projects.
How much time an employee spends in the office will depend on their responsibilities, and flexible remote hours will need to be approved by an employee’s manager.
“The nature of work drives whether or not you can adopt this model. There are certain jobs that are place-dependent — you need to be in the physical space to do the job,” David Dubensky, chairman and chief executive of Ford Land, told the Washington Post. “Having the flexibility to choose how you work is pretty powerful. … It’s up to the employee to have dialogue and discussion with their people leader to determine what works best.”
Ford’s decision to implement a remote-office work model has to do in part with an employee survey conducted in June 2020. Results from the survey showed that 95% of employees wanted a hybrid schedule. Some employees even reported feeling more productive when working from home.
Ford is the first auto company to allow employees to work from home indefinitely, but it might not be the only one. According to the Post, Toyota and General Motors are looking at flexible options of their own.
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