Amazon soup in the basket
Amazon.com ( (AMZN) – Get the Amazon.com, Inc. report) Stocks have risen 3,500% over the past 10 years. The payoff does not lie in online shopping carts, but in experimentation.
The Seattle-based company on Tuesday introduced Dash Cart, an actual shopping cart filled with sensors and software. It promises to do for groceries what smartphones have done for e-commerce.
Dash Cart is the genius of Amazon.com in a nutshell: making customers happy.
You might think that a business that beats the pants off of traditional brick and mortar retailers would avoid costly forays into unfamiliar markets. What about real-world shopping carts? It does not mean anything. Small businesses would just stick with what works. Tap the big bets online.
It reminds me of something Scott Galloway, a professor at NYU Business School, wrote in 2017. He argued that CEO Jeff Bezos created a playing field. so inclined in favor of his business that others really don’t stand a chance.
“Bezos’ ability to paint an extraordinary vision (that is, “the biggest store on earth”) and making consistent progress against that vision is rewarded with the cheapest capital in the history of the company, ”explains Galloway. “And not expensive. Capital. Is. Awesome.”
The bigger story is what all that cheap capital goes for.
Bezos, in a 2017 letter to shareholders, said Amazon.com’s goal is “to patiently experiment, accept failures, plant seeds, protect saplings, and double down when you see customer delight.”
Now imagine, if you will, walk into a real grocery store and grab a cart. As you casually stroll the lighted aisles, you toss vegetables, canned beans, and meat into the basket. You pick up a magazine. Throw that out too. At the register.
However, instead of standing in line, you just go out. While you shop, your vegetables, your groceries and even the People magazine has been debited from your Amazon account. You’re ready.
Would that make you happy, would it make you smile?
That’s the Dash Cart promise. Like your Amazon.com account, it’s a digital shopping cart and cashier, all in one high-tech package. Sensors scan and take pictures of the items placed in the basket. A touch screen displays the cost. It even calculates discounts for coupons, if you have any.
The carts will arrive at the Amazon grocery store in Woodland Hills, Calif., Later this year, according to a report To the edge. This store is different from the 26 Amazon Go convenience stores that have popped up across the country. It’s bigger and doesn’t have hundreds of ceiling-mounted cameras to track items pulled from store shelves.
Amazon Go is a chain of 26 partially automated convenience stores. After logging into an Amazon.com account, the 15,000 square foot locations allow customers to grab snacks like sandwiches, soda, and prepared foods and then go out. The items automatically appear on the Buyers’ Amazon.com site.
What Amazon is doing with Go, and now Dash Cart, is experimentation in the physical world, with huge implications. The business is already gaining in e-commerce.
The company claimed 36.5% of e-commerce in the United States in 2018, according to eMarketer, a digital analytics company. The researcher believes that Amazon.com captured 37.7% of the $ 587 billion market in 2019.
Winning over brick and mortar buyers would be a much bigger deal. This market, at $ 5.47 trillion in 2019, is almost 10 times the size. It is also ready to be disturbed by convenience and better user experiences. A cool shopping cart might do the trick.
Amazon.com is a controversial business. Bezos makes no apologies for ruthlessly using all the advantages to win and start new businesses. Its managers experiment relentlessly. They double up when something is working. Having almost unlimited access to cheap capital provides this luxury.
However, the real genius of the business is to make customers happy.