In this file:
· Amazon's house-brand products become a target for regulators
By selling more of its own products, Amazon is becoming a competitor to the outside manufacturers it hosts on its platform — and that's worrying regulators around the world…
· What’s next for Amazon and grocery?
· ‘You can thank Amazon Go’: The Amazon age is transforming the grocery store
· Kennedy: Amazon Go stores unlikely to kill convenience stores
· Exclusive: Amazon eyes closed Sears stores for Whole Foods expansion
· Court orders Amazon to end Wi-Fi button purchases in Germany
· Jeff Bezos Divorce Draws Shrugs From Amazon Investors, But Intrigue Swirls Around Ownership Stake
Amazon's house-brand products become a target for regulators
David McCabe, Axios
Jan 10, 2019
By selling more of its own products, Amazon is becoming a competitor to the outside manufacturers it hosts on its platform — and that's worrying regulators around the world.
Why it matters: Governments have rarely tried to rein in Amazon's ambitions, allowing it to avoid most of the recent scrutiny directed at other large tech platforms. But the increased focus on Amazon's house-brand offerings suggests it may now be Amazon's turn.
Driving the news: Amazon built a robust business as a participant in its own marketplace when it saw growth stall in stateside e-commerce, which is why holiday shoppers might have seen Amazon-owned brands like Happy Belly for food or Solimo for household goods when they browsed the site last year.
· It created more private-label products, from its AmazonBasics line to brands for fashion and furniture, that are in-house versions of things others sell on the site.
· It struck deals with outside manufacturers to sell their products exclusively.
Critics say Amazon uses its sales data to find fruitful areas where it can produce generic versions of already-popular products.
· Then, its critics argue, Amazon favors its own brands when customers search for a certain item.
· They admit that brick-and-mortar businesses have done the same thing for decades, but argue that Amazon's dominance over online retail makes it more of a problem when the company moves so aggressively into house brands.
By the numbers: Amazon currently has 135 private-label brands, and it has deals to sell another 332 brands exclusively around the world, according to a database maintained by TJI Research.
The big picture: Regulators in major overseas markets for Amazon have already taken aim at its efforts.
· E-commerce rules going into effect next month in India appear to forbid a marketplace like Amazon — or Walmart-owned Flipkart — from selling products it has a stake in and to ban exclusivity deals. Analysts have questioned whether there may be a way around the prohibition.
· European competition commissioner Margrethe Vestager launched a preliminary look at Amazon's practice of using its data to build its private-label business last year, although a spokesperson said in an email that the EU has not yet begun a formal probe.
· Germany's antitrust regulator is probing how Amazon treats third-party merchants who use its marketplace. It says its investigation differs from the EU inquiry, but that the two "proceedings supplement one another."
In Washington, Democratic Sen. Elizabeth Warren...
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What’s next for Amazon and grocery?
by Ashley Nickle, Produce Retailer
Jan 10, 2019
Retailers and brands should start preparing for Amazon grocery to finally hit its stride, according to data and insights firm Edge by Ascential.
The company reported 2018 grocery sales for the retailer at about $3 billion, up 45% from the previous year. The growth rate was down significantly from the 60% mark for 2016-17. Still, the growth has been huge. However, most of the grocery sales come from items like coffee, cold beverages, snacks and cereals — not meat and produce.
Even so, Amazon is still eyeballing those perimeter category opportunities.
“Amazon has no intention of giving up on fresh food,” Edge by Ascential wrote in a recent publication on its short-term, mid-term and long-term predictions for the company. “They just need to change their strategy. We predict that Amazon is finally going to discontinue the sub-par Pantry service — or at least merge it into another program like Prime Now or Fresh — and go all-in on brick and mortar grocery sales.”
Relevance in fresh food is so coveted by Amazon, of course, because of the trip frequency associated with those categories.
“The acquisition of Whole Foods has taken a couple years to sort of materialize in terms of how they will leverage that asset to drive fresh and grocery delivery, but that’s really starting to emerge now,” said Danny Silverman, chief marketing officer of Edge by Ascential. “And as they’ve announced expanding Whole Foods and creating more formats, there’s also been some news on the number of Amazon Go locations that they want to add — that also creates the potential for more hubs that are farther out or extended to reach more of the population.”
Synergy possibilities ...
Picking up pickup ...
How retailers should respond ...
‘You can thank Amazon Go’: The Amazon age is transforming the grocery store
by Hilary Milnes, Digiday
January 10, 2019
For grocery retailers competing in the Amazon age, it’s a game of follow the leader.
After years of pushing for e-commerce overhauls — bringing inventory online, figuring out how to deliver grocery orders to customers and re-routing fulfillment processes — grocery chains’ stores are again at the focus of competitive strategies and new technologies. Tools like scan-and-go and cashierless checkout, real-time customer data collection, digital shelves and automated inventory fulfillment and merchandising are in early experimentation modes for grocery retailers including Kroger, Fairway and Safeway.
The big motivator? Amazon.
“These retailers have swung so far in the direction of e-commerce, thinking the future was online. And now here’s Amazon with a brick-and-mortar strategy,” said Sylvain Perrier, CEO of grocery e-commerce platform Mercatus. “So now the pendulum’s swung back to looking at the in-store experience and what that needs to be today. Technology in stores and store updates can make or break a business now.”
First, Amazon shook the industry into thinking the future was online-only. Then, it bought Whole Foods and began opening its cashierless Amazon Go stores, turning to the same turf that retailers had been simply maintaining, rather than innovating, in the name of building and growing e-commerce.
In response, grocery stores with much bigger store networks are adopting new in-store technologies to compete.
“The death of offline grocery was greatly exaggerated,” said Andy Ellwood, the co-founder and president of grocery comparison service Basket. “The hybrid of online and offline requires offline. And as much as can be put into the logistics of the last mile, it still requires that physical presence.”
It’s not that online business is shrinking or going away — Kroger nearly doubled its online revenue from $5 billion to $9 billion last year. But grocery doesn’t as easily translate to an e-commerce-only experience, like books or CDs. So it’s becoming more evident that grocery’s winning strategy is to become as relevant and as effortless for customers to shop, which involves an equally up to date in-store experience as online. Now, with online strategies in place and stores getting digital makeovers, these retailers are all competing for customer loyalty, where Amazon also happens to excel, with a loyalty program of more than 100 million through Prime.
“You can thank Amazon Go. Grocery stores are finding today, they need to be a brand. The most important thing you can do to protect yourself from Amazon and from competitors is to get loyalty from your customers. You can’t bribe them with discounts or win them over with proximity,” said Will Hogben, CEO of FutureProof Retail, a technology company that equips retailers with cashierless checkout tools.
To keep stores from stagnating, retailers are...
Kennedy: Amazon Go stores unlikely to kill convenience stores
Marlene Kennedy, Opinion, The Daily Gazette (NY)
January 10, 2019
Cue the ominous theme song from “Jaws” (duun-dun … duun-dun … duun-dun duun-dun …) as another industry looks over its shoulder to see whether Amazon is gaining.
This time, retail observers say it’s the convenience store sector on which the online behemoth – with brick-and-mortar designs – has a bead.
They cite a Bloomberg report last fall that Amazon Go plans 3,000 cashier-less food stores by 2021, and the analyst note last week that suggested gas stations would give Amazon additional locations for Go stores or customer pickup “lockers,” while providing a reliable new revenue stream in gasoline.
Replicating the quick-food and fuel sales central to convenience stores would take a giant shark-sized bite out the sector, they say.
An industry spokesman, though, is more sanguine.
“The movement of Amazon and all the other entrants into convenience … shows the value of convenience [stores],” said Jeff Lenard, vice president of strategic industry initiatives for NACS, founded as the National Association of Convenience Stores.
“Brick-and-mortar is still faster than the Internet to quench a thirst or feed a hunger.”
The trade group, based in suburban Washington, D.C., counts some 155,000 convenience stores nationwide. Together, they sell more than three-quarters of the fuel purchased in the country.
For 2018, both fuel gallons sold and in-store sales increased, according to NACS, making 85 percent of convenience store operators surveyed optimistic about 2019 first-quarter revenue – the highest showing in five years. Food led the strong in-store growth last year.
Lenard said the “cool technology” from Amazon – the new Go stores rely on a smartphone app to check you in, tally your purchases and let you leave at will, later charging your Amazon account for what you bought – has everyone’s attention.
But he said Go stores are different from convenience stores because they have limited daily hours, some are closed on weekends, and they don’t sell fuel or tobacco and other restricted products.
To Lenard, they’re more akin to a quick-service restaurant, a view shared by other Amazon-watchers.
Indeed, RBC Capital Markets, in a research report this earlier week, pronounced Go more of a threat to urban “quick eateries” than to suburban convenience stores, according to a story in Supermarket News...
Exclusive: Amazon eyes closed Sears stores for Whole Foods expansion
Krystal Hu, Yahoo Finance
January 10, 2019
While some traditional retailers are having a hard time keeping their doors open, Amazon-owned Whole Foods has been gearing up to rapidly expand into more regions.
Grocery chain Whole Foods is eyeing sites that were previously home to Sears, Kmart and other struggling retailers, sources told Yahoo Finance.
Last month, for instance, Whole Foods managers visited a site in Utah that used to host a Kmart store. The store shut down in mid-2017 among its parent company’s financial woes and has been vacant ever since.
Whole Foods now has more than 470 stores around the country, still a far cry from its competitors in the grocery space, including Walmart and Kroger. Eighteen months after Amazon’s acquisition, Whole Foods now has the money to open new locations in areas that were once out of reach, including states like Wyoming and Montana.
Sears, on the other hand, hasn’t been profitable since 2010. Over the past three years, it has closed 123 Sears stores and 205 Kmart stores. While Whole Foods concentrates locations around coastal cities and affluent neighborhoods, Sears’s national footprint spreads across the country and covers a broad demographic, which can help Whole Foods scale up fast at a relatively lower cost.
“There are lots of vacant retail space that they can take advantage of, and that gives them access to reasonable retail locations, but I also think they want to secure good real estate deals by filling voids, and getting good rental levels from landlords,” Neil Saunders, managing director of retail at GlobalData, told Yahoo Finance.
Landlords are also increasingly interested in signing grocery and food retailers because they can help drive foot traffic to a strip mall, according to Saunders.
Whole Foods didn’t respond to request for comments, but Jim Sud, executive vice president of growth and business development at the grocery chain, echoed the strategy of using existing stores at a retail real estate event in Dallas on Tuesday...
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Court orders Amazon to end Wi-Fi button purchases in Germany
The Associated Press
via Trib Live - Jan. 10, 2019
BERLIN — A German court has ordered Amazon to stop taking orders from customers using wireless-enabled buttons because they breach e-commerce rules.
The Munich regional court ruled Thursday that Amazon’s Dash buttons fail to provide customers with necessary information, such as the price of the product they are purchasing.
Amazon allows customers to set up the buttons to buy specific household products and food with a single press.
But the court found that Amazon reserves the right to change aspects of the order, such as price, delivery cost and even product brand.
The case was brought by a German consumer protection group...
Jeff Bezos Divorce Draws Shrugs From Amazon Investors, But Intrigue Swirls Around Ownership Stake
by Dade Hayes, Deadling | Hollywood
January 10, 2019
After Jeff and MacKenzie Bezos announced their plans to divorce after 25 years of marriage, Amazon investors have reacted with a shrug, with the company’s stock price essentially flat in mid-day trading today.
Even so, the news puts the fortune of the world’s richest man and the ownership structure of an era-defining, global powerhouse in a state of flux.
The Bezoses tweeted Wednesday that after “a long period of loving exploration and trial separation, we have decided to divorce and continue our shared lives as friends.” (See their full statement below.) They have yet to file any official paperwork with the courts, confirming expectations that they will seek to handle the matter privately so as to avoid attracting unwanted attention to the company.
President Donald Trump, who has frequently attacked Bezos and Amazon while in office, was asked by reporters about the divorce today. “Well, I wish him luck. I wish him luck,” Trump said. “It’s going to be a beauty.”
The announcement comes amid numerous reports by outlets including People, the New York Post and Entertainment Tonight that Jeff Bezos is dating Lauren Sanchez. The wife of Patrick Whitesell, executive chairman of WME-IMG holding company Endeavor, Sanchez is a former anchor of Good Day L.A. on KTLA Channel 5.
It is unclear how much of an Amazon corporate matter the split could become, especially for a company that recently became the world’s most valuable as measured by stock price. Previous divorces involving high-net-worth figures have ended up having a material impact, including those of Elaine Wynn and casino magnate Steve Wynn, and former Los Angeles Dodgers owner Frank McCourt and his ex-wife, Jamie. And of course Hollywood is rife with tales of studio moguls and top-tier stars brought low by marriage breakups, though all of the above occupied a much lower financial bracket than that of Amazon’s first couple.
The net worth of Jeff Bezos has been estimated at $137 billion. Washington state, where the couple plans to divorce, has so-called “50-50” divorce laws, meaning couples generally divide their assets evenly. Should MacKenzie Bezos wind up with half of the total fortune, she would instantly become the world’s richest woman.
Most of the $137 billion derives from Jeff Bezos’ 16% ownership stake in Amazon. He drafted the company’s original business plan on a laptop while driving cross-country in the early 1990s to Seattle with MacKenzie Bezos at the wheel. The couple originally met as colleagues at New York hedge fund D.E. Shaw. She also worked at Amazon in its early days before focusing on raising their four children, who are all now in their teens, and then writing two novels...
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