Can Transport Industry Keep Pace With Amazon’s Giant, Innovative Steps?

INSIGHTS ABOUT THE NEWS - Amazon.com’s retail popularity just keeps growing as the company searches for ways to make ordering online even easier. Amazon is no longer just books.

Harvard Business Review says “the Amazon-Whole Foods deal means every other retailer’s three-year plan is obsolete. Amazon’s greatest competitive advantage is not its e-commerce network; it is its innovation engine”

Amazon’s proposed $13.7bn deal to acquire Whole Foods is a retail game changer, states The Main Report Business Alert. Here are some things to think about:

This is about more than just supermarkets - this impacts all of retail. The Whole Foods deal is huge - the biggest we’ve seen in retail in quite some time but it is likely not the last for Amazon. The online giant could take on a really big company like Target if they want to challenge Walmart directly.

Omnichannel or seamless retail is here to stay. Retailers cannot survive solely through e-commerce or only through bricks and mortar – it must be a combination of both. This will be an enormous task for retailers to accomplish. Sadly, many will not make this transition. The stakes have been raised.

Grocery home delivery is still economically problematic. Getting groceries to consumers’ homes remains expensive and problematic. Without charging the consumers a reasonable premium, these businesses will struggle to make money. The economics of pick-up are much better, however, and Amazon just gained a very large and convenient network.

Supermarkets will be under great pressure to reinvent themselves. Margins will be under pressure and we will likely see more M&A activity as they figure out their next steps. The old standbys - better service, better fresh food, more foodservice options - will be mission critical as the centre store faces unprecedented pressures.

Disruptive models will be challenged. Meal providers need to find retail partners as a way to bring down customer acquisition costs, marketing spend and they will need to develop more convenient and cost effective supply chain alternatives.

Employing self-driving vehicles to move and organise items at Amazon hubs could let human employees focus on more important matters.The more than 460 Whole Foods stores in the US, Canada and the UK could be turned into distribution hubs. Amazon will acquire 400-plus prime locations.

In its favour, Amazon has long been taking steps so that it won’t need to rely on third parties such as UPS, FedEX, or the Postal Service for deliveries. A patent it has filed outlines the company's vision for vertical drone delivery hives which could be used in urban centres.

While Amazon is likely to throw its weight into establishing a big Australian footprint, it has made no mention of NZ. The economies of scale that favour its operations in Australia are unlikely to be easily realisable in our much smaller, more sparsely populated nation.

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