Is Amazon Quietly Winning The Convenience War? | Fast Five Shorts

Chad, I said you're getting the Amazon questions today.

I wasn't joking.

On a scale of 1 to 10, where does Amazon's 30 minute delivery expansion rank in terms of retail's overall impact?

Yeah, I'm going to give it a solid.

Seven.

Seven.

You say six or seven.

I've literally,.

I almost did it.

No, no, no, no.

We're not doing that.

We'll say seven.

All right.

Okay, okay.

So here's why it's not higher or lower, right?

So it, you know, it's, it's not a 9 or a 10 because it doesn't itself solve a big enough problem.

I mean, consumers aren't sitting around desperately needing toothpaste in 30 minutes instead of two hours, right?

And like the way that markets have gone in urban delivery like this is a little more evolutionary, not revolutionary in its own right.

But that's also why it's not a three, right?

Because it serves to expand the competitive moat that Amazon has or inversely could help start to dry up others.

Right?

So if you think about it, every city that they add is kind of another nail in the coffin for traditional retail's biggest advantage.

Right around immediacy.

Now you need batteries now, like maybe you went to Target or Walgreens or a C store, right?

It can be Amazon before you finish your beverage.

Right?

And to me, the impact isn't the 30 minutes.

It's psychologically what Amazon is doing to refine what quote, normal feels like.

And to me, that's the real game here, right?

Like they've been standardizing, you know, from free shipping to 2 day prime the same day.

Like 30 minutes is the next like psychological line they're trying to blur or erase.

You know, not everything needs to be delivered in 30 minutes.

They just need consumers to believe that Amazon is the fastest, most reliable option by default.

Right?

And once that perception locks in and purchase intent automatically can shift to them before others are considered.

And that's the behavior they're trying to rewire.

And you know, hint, hint, foreshadowing here.

I mean, like, it should make other retailer CEOs start asking themselves and their teams like, am I losing the immediacy war?

Okay, interesting.

So there's a, there's a lot to unpack with this headline, which is why I put it first.

I'm a little surprised to only hear a seven.

And there's also a long game aspect to this.

I want to come back, but I want to get Kelly's thoughts.

Kelly, do you agree with Chad here?

Are you in the 7 range?

You think it's more?

Do you think it's less?

Like what's your take?

I would probably have a similar narrative to Chad.

Okay.

Knowing that that 30 minute window, it is so narrow and specific, I'm curious to see what the cost they're going to attribute to it.

Like how much is 30 minutes worth to someone versus 2 hours to really see if the economics end up working out for them for this delivery option.

Okay, so let me ask you this then Chad, back to you.

So, so if I said to you what is the impact of, on retail of this announcement say five to 10 years from now versus today, does that change your answer or you still think it's a seven?

I mean I, I suppose by you asking that question.

Right.

It's a matter of, by how much is immediate delivery going to take hold in terms of consumers expectations.

Right.

And I mean I, I kind of alluded to that.

Right.

And that you know, we've, we've been coming, I mean like it at when free shipping first came out, that was an anomaly.

Right.

Like when, when you could get everything through Amazon in two day, you know, now we get ticked off if we can't get something same day.

So there's no doubt that with, with capabilities.

Right.

Becomes an elevated consumer expectation.

And are we just going to want everything to be able to be delivered in 30 minutes or an hour?

You know, pick your time frame?

Yes, perhaps.

But that's also why I said it's kind of evolutionary.

Right.

And that, you know, I do think that this is more of a glide path toward something that will become more commonplace over time versus man.

This signals to me a major step change in the way that we're going to be operating now.

So I guess inherent in what you're saying is I agree with you that that expectations will continue to shift and we'll look back at the moves that were made by retailers to secure that infrastructure as having been material.

To me just right now point in time, as I saw this, it felt like, okay, I mean it makes sense that they're doing this now and by the way, others are as well.

Yeah, right, right, right.

Which we're going to talk about too, because that's a very important part of the story.

You know, it's funny, like when I first started, when I first asked you a question, I was probably like, yeah, I'm a seven too.

But actually hearing you talk, I think you've, you've subtly hit on something that I think we need to call out, which makes me actually kind of push my Valuation of this up a little bit, which is Amazon potentially is playing the long game here and they're doing it to starve out the local regional grocers to then pick up that space, buy them on the cheap, and then become the regional grocer across the country again.

Or to become the national grocery in a lot of ways.

And the reason I say that because this plays in with the philosophy they've been.

They've been espousing, which is the electronics with your milk.

That electronics with your milk philosophy.

They're just cherry picking right now.

And they know, and we all know that the universal truth of speed works like, you know, people are gravitating towards this.

It seems like more and more people are gravitating towards it every day.

In fact, I just did it with Walmart, who we're gonna talk about next.

Just the other day, to get a kid's birthday present, I need a birthday present like that day.

And like, I just did it.

Now.

Does it work for the pull the.

Sorry, does it work for the full grocery pantry load?

No, it doesn't.

Of course it doesn't.

Like you're not gonna substitute this for that.

But you know who doesn't care about that is Amazon.

Because Amazon can play the long game here and meanwhile they'll cherry pick the volume out of the traditional grocery stores and it just continues to go down.

And so they starve them out in the long run.

That's what I'm thinking.

Kelly, I saw you.

You kind of, you kind of gave me the.

Oh, I had, you know, what were you thinking there?

What's going through your head?

Yeah, that just got me kind of excited as well, of like coming at it from a different angle.

And I think back to their play into Whole Foods.

The more that they can get ahead of that short term grocery demand.

And you said, you know, starve out other grocers.

Is there an eventual path for them to do more physical retail acquisition and actually take over some of those doors and run those as distribution hubs?

That would be very transformative not to use the word transform again.

No, no, no, hey, no, transform is an important word.

It just shows you how often it's getting used.

Y.

So it does still come down to local inventory selection ability to have how wide a birth that you can do on that.

Right.

And so, I don't know, maybe things will surprise me in five years in terms of like having these, you know, smaller depot, like local delivery elements where they can handle large amount of inventory as well as the logistics of it kind of at the same time, but that's really, really hard to do.

So it still feels.

It still feels discreet in terms of what you can actually serve in those kind of windows, right?

100%.

100%.

And the other part of this, too, Chad, which you just got me thinking about, too, which hadn't entered my thought process at all, is we haven't talked about the AI layer on this in terms of how AI transforms the way we shop for groceries.

And what is the advent of this infrastructure or how does this infrastructure play out in that realm in the long run, too?

So, man, there's a lot of meat on this bone, for sure.