Tony Hoggett to spearhead Amazon’s aggressive physical stores push
With the recent arrival of Tesco veteran Tony Hoggett at Amazon, we’re about to see a much more aggressive physical store strategy from the e-commerce giant.
That’s the view of Brittain Ladd, a former Amazon exec who these days works as a supply chain consultant.
“I believe the Achilles Heel of Amazon's grocery strategy is their lack of a coherent physical store strategy,” he says in a LinkedIn post.
“Let me be clear. I love Amazon Fresh stores. I love Amazon Go stores. I love the fact that Amazon is utilising Just Walk Out technology in its full size supermarkets. I love the fact it has created a marketplace specific to the needs of grocery retailers and brands. All are brilliant moves and only Amazon could have pulled it off.”
At the same time, however, Ladd isn’t a fan of the following:
1. Amazon isn't utilising micro-fulfilment technology to the degree that it should.
2. Recent data suggests that sales at Whole Foods are improving.
“Hoggett may disagree with me, but I believe the time has come to change the name to Whole Foods+ and change the assortment to include branded CPG products. Customers can get the best organics plus buy the branded CPG products they love,” Ladd writes
3. Is Whole Foods strategic to Amazon?
“I can make the argument that Target should own and operate Whole Foods, and open Whole Foods inside Target stores. Should Amazon divest Whole Foods to Target? Should Amazon acquire Target? I'm not convinced Amazon has the best strategy for Whole Foods.”
4. Ladd believes Amazon is going to build electric powered autonomous cargo ships by 2025.
It must think big and reimagine the entire process for engaging with grocery customers, and fulfilling orders.
This means creating an integrated ecosystem of stores, stand alone MFCs, stores with MFCs inside, rapid grocery pickup, rapid grocery delivery, integrated meal and grocery planning and delivery, etc.
5. Amazon should not get into an arms race with Walmart, Kroger, or other retailers.
“I’ve stated before that fixed fortifications doomed the Maginot Line, and in many ways, stores are fixed fortifications that can be defeated by a better strategy and technology.”
“Amazon doesn't have to have the same number of stores to create the best customer experience. I continue to believe that it can sell more groceries than Kroger between 2027 and 2030, and sell more groceries than Walmart between 2030 and 2035.”
Ladd concludes: “The grocery industry is going through incredible changes.”
“However, there is always going to be a leader. I prefer not to use the term ‘winner’. Amazon is playing an infinite game where the goal isn’t to win, it’s to keep delighting customers. Competitors will come and go.”
