When Amazon sneezes, the rest of the retail world catches a cold.

 

 

The fresh food people

That’s what happened when the online giant tipped 3% of its market cap (or a lazy US$15 billion) into Whole Foods – an organic grocer with over 400 stores across the United States. As a result of this move, shares in Walmart, Target and traditional grocery chain, Kroger, were absolutely clobbered by investors.

Why? Because this marks the first large-scale move to bricks-and-mortar by the business that spent 20 years smashing that very model. You can bet that Australian retailers - with comparatively little clout compared to American chains - are more nervous than they ever were…

And you can put Coles and Woollies in that mix as well.

 

 

But wait… there’s more!

One of the biggest challenges faced by traditional retailers is shoppers who inspect a product in store before buying it online at a cheaper price. The emergence of Amazon as a discount retailer was a major driver of this behaviour, but surprise, surprise, the company has suddenly found a way to protect itself from the very problem it created.

‘Physical Store Online Shopping Control’ is the latest patent awarded to Amazon. The tech is designed to prevent shoppers from doing price comparisons when shopping in, say (for the sake of a totally random example), a Whole Foods store.

The fact that Amazon did this with a straight face further demonstrates CEO Jeff Bezos’ ruthless desire to control all in front of him. The fact that other stores who want to use this technology will have to pay Amazon for the privilege is the icing on the cake.

 

 

Finally…

Everyone relax (well, not really). The looming onslaught of Amazon in Australia might be further off than expected. Gerry Harvey has been particularly vocal this week, suggesting that it can take quite a while to source, approve and build the kind of depots that Amazon will require to meet its promise of same-day-delivery.

"If that happens within three years, that's very quick," he told Fairfax Media.

The article goes on to suggest that the existing infrastructure owned by MetCash could be useful to gain a quick foothold in the Australian market. However, even that established logistics network might not be big enough to execute Amazon’s plans.

“For their model to work they would need 50 warehouses in Australia,” he adds.