Monday, June 19, 2017

The Amazon-Whole Foods Future

Amazon agreed to buy Whole Foods. I recently wrote how Whole Foods was getting beaten up by Trader Joe's. The problem was the casual or marginal organic consumer. Trader Joe's can beat Whole Foods up in that market by being a bit cheaper. Whole Foods (WF) itself is rolling out stores that are more stripped down and have a smaller footprint so that they can pluck the younger, poorer organic leaning consumer. Amazon's purchase of WF shows you how WF can become very competitive but also the dark, poorer future the progs predict will come.

Amazon has been testing no lines, no check out, pick up grocery stores for a while. This sounds futuristic and exotic but it's not. Kroger does something similar called "Clicklist". Shop online, pay online, the staff at the store attempts to fill the order (not perfect) and then you the consumer pick up your groceries at the store. This is an adaptation of the old failed online groceries idea, but the twist is you pick it up so the grocery chain does not have to have a delivery fleet. It is also anchored in their existing distribution network, so it is not all of the corporations' business.

Amazon now has a corporation with an existing store footprint, a brand name that people consider high status and an existing market strategy that makes money. It has problems, but that's where Amazon comes in. Amazon starts applying its online buy + pick up formula to WF, and now WF can move to smaller stores. WF can also pop up in odder locations that have warehousing space and move with the flow of their consumer base (keep white flight in mind).  WF has an Internet savvy consumer base so this type of shopping will work.

Suddenly the fixed costs of a store get cut, the staffing costs get cut and WF is leaner as a firm. WF then can compete better on price with Trader Joe's and their quality organic goods will not be so much more expensive than the organic labeled items in Kroger, Wegmans, Target, etc. It helps WF bottom line with costs and potentially expands their top line sales growth. It will make each location more efficient.

Why stop there though? This is about the future. Amazon and WF both see a poorer consumer here and now and that trend will continue. They must become cheaper. This idea helps but also points to the future for city living. I talk and write of the Clinton Archipelago. I also mention how these cities are massively feudal in their design. New towers of condos and apartments do not get made with mid-level pricing. They are for more wealthy folks to concentrate their living in NYC, San Fran, Miami, etc.

Amazon is also testing another program: drone deliveries. Extrapolate the ideas with these specific consumer brands. Amazon can use its online shopping for more warehouse style 'stores' that deliver by drone. Cities will start seeing drone copters deliver food to the towers so that the tower residents, the lords and ladies of the Clinton Archipelago, never have to risk traveling on the city streets among the riff-raff that are their political allies.

The Rio or Sao Paulo dystopia living will be exemplified by these towers that can use technology to avoid the consequences of bad progressive governance. Why stop there? These progressive elites, and even just wealthy soft right elites, will remove themselves from the public sphere. These Whites, Asians, Jews and occasional non-Asian minority will harden their feudal enclaves. Eventually they will leave their surroundings a wasteland filled with a violent and dumb underclass. They won't apply VR towers for those folks to clean up the streets or sequester problem populations.

Take this out further. Extend the technologically enhanced segregation. Enhance the decay and degradation of the masses. They'll create Elysium.


Tiny Duck said...

This guy owns you with this epic thread:

ConantheContrarian said...

The elite will have to have armed forces - land and air and water - to keep a boot in the face of the savage underclass. Someone has to tend the fields and husband the animals. Whether forced or voluntary, someone has to produce the elements to run the energy for these Elysium feudal cities. Someone has to manufacture the goods to deliver to Bregna. However, it will be a long time before the elite need only rely on robots and no longer have need most of humans. And a lot can happen in between time.

Doktor Jeep said...

Look at the signs: all that "MAGA" and "up the flyover country" in light of a potential for huge corrections in the dotcom dimension (aka: the coasts) or tech generally.

Could we see a day when the steel mills are back open for business, we have gone back to manufacturing and agriculture (the latter groaning under being outvoted by urban Eco-Naziism) yet the IT/HR/soft tech world in the cities goes on a decline?

I won't pop the champagne corks just yet (as it would be comeuppance best served cold) given inertia but possibly the reign of urbanus snarkanus douchbaggus Americanus might be on a downslope and the guys with the double mocha faggochinos (with sprinkles) and the 6 dollar avocado toast will be the ones on the unemployment lines.

Remember that article from some "woman in tech", roughly around the time Trump was voted in, trashing flyover country and talking up how great it is to live in big cosmopolitan (read: gay or something) cities? The trend for the last 21 years has been pretty much that: screw the real working class, but coddle the $80K per year starting salary "tech worker" (who thanks to HR departments getting long marched, are almost always lefties) while making him feel guilty too so he votes left.

The fun part will be watching the brain drain (I hope, anyway) when those guys who been playing it ambiguously gay just to get that job in the city just so they can have a damned job suddenly find that they do NOT have to live in the gun controlled snarking passive aggressive douchebag left coast. Maybe he can go finally go back to Nebraska or Indiana, not pay $2500 a month for one room (and therefore can take a pay cut) and live around real fellow Americans? Heck he might even (Gasp! Horrors! OMG I literally can't even!) settle down and start a family?

And the cities? The type of person who will hang on, living among trust fund kiddies in activist nests, or trying to relive the days of the "startup" while asking for support from fellow snarkers to help develop some useless electronic gadget or "app" capable of distracting the same morons, is apt to be the kind of person who will still want to maintain their pretentious gluten free vegan fair trade no-hippies-got-upset-during-production products, but will be lacking funds to do it. They'll apply (unironically) for EBT cards.

Alexandros HoMegas said...

"The Rio or Sao Paulo dystopia living will be exemplified by these towers that can use technology to avoid the consequences of bad progressive governance."

This is my toughts about the matter, the different classes don't have to intereact anymore with each other.

Anonymous said...

Something that needs to be discussed by the Dissident Right is how well the elites are united in their Globohomo vision, just look at McMullin and his French counter-part Micron, this is the elite appointed candidates to rule the West.

sykes.1 said...

How is the staffing level cut. You will have fewer check-out clerks, but that must be off-set by having other clerks roaming the aisles and filling out orders. It should be noted that consumers provide a tremendous amount of free labor collecting and transporting items, and all this labor will become paid clerks.

Also, a substantial amount of each purchase is spontaneous, unintended shopping spurred by product placement. You lose all of that, which must reduce total sales.

Retail grocery businesses are already very high tech and use a great deal of well-tested, high level psychology to promote purchasing. Amazon likely doesn't understand any of this.

I think this will be a failure.

Anonymous said...

The cockroaches always retreat to their cracks when the the light comes on. Old cockroaches, old cracks. Same story.