In-store Echoes were clearly just the beginning of Whole Foods’ Amazon integration. Now that the massive online retailer owns your go-to chain for flax, kale and kombucha, it’s time to really roll it into Prime.
This week, Whole Foods alerted shoppers via an email spotted by Market Watch that it’s going to sunset both its reward program and digital coupons at the beginning of May. The company teased what’s to come by promising, “We’re Growing Something Good,” along with an Amazon logo. That “good,” however, will not including rolling over benefits into the new program.
Details of the future integration are still sparse at the moment, and we’ve reached out to Amazon for more information. For now, however, the site’s FAQ suggests we all, “Stay tuned for additional announcements for Amazon Prime members.”
Prime has, of course, become the great connective tissue in Amazoniverse in recent years. What started as an offer of free shipping has since grown to include all of the company’s multimedia offerings, along with other Bezos-owned businesses, including The Washington Post. Prime will get you six free months of Donald Trump’s least favorite newspaper. Well, one of them, at least.
Tying Whole Foods’ rewards and coupons into Prime should prove a perfect bit of synergy for the two parties. Sign up for free shipping and get a deal on bulk chia seeds. What’s not to like?
News Source = techcrunch.com
AWS adds more EC2 instance types with local NVMe storage
These new so-called C5d instances join the existing lineup of compute-optimized C5 instances the service already offered. AWS cites high-performance computing workloads, real-time analytics, multiplayer gaming and video encoding as potential use cases for its regular C5 machines and with the addition of this faster storage option, chances are users who switch will see even better performance.
Since the local storage is attached to the machine, it’ll also be terminated when the instance is stopped, so this isn’t meant for storing intermediate files, not long-term storage.
Both C5 and C5d instances share the same underlying platform, with 3.0 GHz Intel Xeon Platinum 8000 processors.
The new instances are now available in a number of AWS’s U.S. regions, as well as in the services Canada regions. Prices are, unsurprisingly a bit higher than for regular C5 machines, starting at $0.096 per hour for the most basic machine with 4 in AWS’s Oregon region, for example. Regular C5 machines start at $0.085 per hour.
It’s worth noting that the EC2 F1 instances, which offer access to FPGAs, also use NVMe storage. Those are highly specialized machines, though, while the C5 instances are interesting to a far wider audience of developers.
On top of the NVMe announcement, AWS today also noted that its EC2 Bare Metal Instances are now generally available. These machines provide direct access to all the features of the underlying hardware, making them ideal for running applications that simply can’t run on virtualized hardware and for running secured container clusters. These bare metal instances also offer support for NVMe storage.
News Source = techcrunch.com
Food delivery’s untapped opportunity
Investors may have already placed their orders in the consumer food delivery space, but there’s still a missing recipe for solving the over $250 billion business-to-business foodservice distribution problem that’s begging for venture firms to put more cooks in the kitchen.
Stock prices for Sysco and US Foods, the two largest food distributors, are up by over 20% since last summer when Amazon bought Whole Foods. But, these companies haven’t made any material changes to their business model to counteract the threat of Amazon. I know a thing or two about the food services industry and the need for a B2B marketplace in an industry ripe with all of our favorite buzz words: fragmentation, last mile logistics and a lack of pricing transparency.
The business-to-business food problem
Consumers have it good. Services such as Amazon and Instacart are pushing for our business and attention and thus making it great for the end users. By comparison, food and ingredient delivery for businesses is vastly underserved. The business of foodservice distribution hasn’t gotten nearly as much attention – or capital – as consumer delivery, and the industry is further behind when it comes to serving customers. Food-preparation facilities often face a number of difficulties getting the ingredients to cook the food we all enjoy.
Who are these food-preparation facilities? They range from your local restaurants, hotels, school and business cafeterias, catering companies, and many other facilities that supply to grocery markets, food trucks and so on. This market is gigantic. Ignoring all other facilities, just U.S. restaurants alone earn about $800 billion in annual sales. That’s based on research by the National Restaurant Association (the “other NRA”). Specific to foodservice distribution in the U.S., the estimated 2016 annual sales were a sizable $280 billion.
How it works today
Every one of these food-preparation facilities relies on a number of relationships with distributors (and sometimes, but rarely, directly from farms) to get their necessary ingredients. Some major national players including Sysco and US Foods mainly supply “dry goods.” For fresh meats, seafood and produce plus other artisanal goods, these facilities rely on a large number of local wholesale distributors. A few examples of wholesalers and distributors near where I live in the San Francisco Bay Area are ABS Seafood, Golden Gate Meat Company, Green Leaf, Hodo Soy and VegiWorks.
Keep in mind that the vast majority of these food-prep businesses don’t shop for ingredients the way you and I may shop for ingredients from our local supermarkets or farmer markets. There’s too little margin in food and doing so would be too costly, as well as highly inefficient (e.g., having to pay to send staff out “grocery shopping”). A few small operators do buy ingredients from wholesale chains such as Costco or Restaurant Depot. But in general, it’s way more efficient to place an order with a distributor and get the goods delivered directly to your food-prep facility.
But that’s where the problems lie. These distributors are completely fragmented, and the quality of fresh ingredients varies meaningfully from one distributor to the next. Prices fluctuate constantly, typically on a weekly basis. What’s worse is delivery timeliness, or rather the lack thereof. These distributors each employs their own delivery staff and refrigerated trucks. There is a limited number of 6 am deliveries they can make for a given delivery fleet.
As a food business operator, you may be ordering quality ingredients at the right price, but if the delivery doesn’t show up on time, you’re outta luck. You won’t be able to prepare the food in time, all the while paying for staff who are sitting around and waiting for ingredients to arrive.
As a result, you keep getting seemingly random offline pitches with promotions and price breaks from these distributors. But there’s no way to ensure timely delivery. Everybody makes verbal promises and it’s all based on who you know. Things may work for a week or two until you get “deprioritized” by one of the distributors and you have to start the process of finding the next one.
You intentionally rotate among the different distributors, just to keep them “on their toes.”
The opportunity for a food distribution platform
What’s missing is a platform that hosts a catalog of products from these distributors, with updatable availability, pricing and inventory. On it, food businesses could browse for products and place orders. Fulfillment can be done by the distributors at the beginning, but ultimately that operation may need to be done by the platform to maintain consistent quality of service. Reliable fulfillment may end up being the biggest differentiator for such a platform.
I’m aware of startups that have tried to become the dominant B2B platform for food service distribution. But it takes meaningful resources to get to critical mass and these startups tend to flame out before reaching that point. It’s not necessarily their fault for not being effective.
This industry has low margins, is slow to adopt new technologies and has many incumbent players. But the opportunity to design and execute on this platform is significant, with clear ROI as a reward and a built-in moat once it reaches critical mass.
Food-prep businesses are hungry for a better solution. And as any food entrepreneur knows, hungry customers are the best kind.
News Source = techcrunch.com
Amazon Prime members now get 10% off sale items at Whole Foods, plus other weekly discounts
Amazon announced today it will begin offering exclusive discounts to Prime members who shop at Whole Foods — a move that’s been expected since Amazon acquired the grocer last year for $13.7 billion, and more recently shut down Whole Foods’ rewards program and digital coupons. Prime members, starting today, will be able to take 10 percent off Whole Foods’ hundreds of sale items, as well as receive other “weekly deep discounts” on best sellers, Amazon says.
The savings are rolling out initially to the Whole Foods stores in Florida, but will expand to all U.S. Whole Foods Market and Whole Foods Market 365 stores this summer.
Whole Foods currently has over 470 stores in the U.S., Canada and U.K. combined, but the majority – 463 – are in the U.S.
Amazon has made fairly quick work of leveraging its investment in the brick-and-mortar grocery chain. Almost immediately following the acquisition, it began slashing prices in Whole Foods’ stores. And it already offered special coupons to Prime members to help them save more at times — like when it discounted Thanksgiving turkeys, for example.
Today’s news is now formalizing those prior efforts with a standard rewards program where Prime members can expect to take 10 percent off sale items on a consistent basis, in addition to other weekly discounts on select items. These will be labeled in store with yellow “10% off” sale signs, and “Prime Member Deal” signs, respectively.
For example, this week (5/16-5/22), Prime members at supported stores will receive the following savings:
- Sustainably sourced, wild-caught halibut steaks: $9.99/lb., save $10/lb.
- Organic strawberries: 1 lb. for $2.99, save $2
- Cold-brew coffee at Allegro coffee bars: 50 percent off 16 oz.
- KIND granola: 11 oz. bag 2/$6
- 365 Everyday Value sparkling water: 12-pack case buy one, get one free
- Magic Mushroom Powder: 50 percent off
It’s common for grocery stores to offer weekly savings, but in Whole Foods’ case, customers won’t have to sign up for a loyalty card or clip coupons from a circular — they have to join Amazon Prime to enjoy these savings. That could be a lure for Prime members who already shop Whole Foods, but could push price-conscious shoppers further away from the chain, given its existing reputation for high prices.
To take advantage of the new program, Prime members will need the Whole Foods mobile app, where they sign in with their Amazon account and then scan the app’s “Prime Code” barcode at checkout to apply the appropriate discounts. Alternately, they can opt in to use their phone number at checkout, if preferred.
Amazon has also set up a dedicated site for more information about the discount program (amazon.com/primesavings).
These in-store savings are not the only way Amazon has been tying Whole Foods to its larger business.
The companies also launched two-hour delivery from Whole Foods via Amazon’s Prime Now service in 10 cities across the U.S., with more to come this year, Amazon says. Plus, Amazon Prime members get 5 percent back on Whole Foods purchases with the Amazon Prime Rewards Visa Card, the companies announced earlier this year.
And the stores themselves are serving as the brick-and-mortar presence for Amazon’s online store, with things like Amazon Lockers, support for returns, and the ability to shop Amazon hardware, like Echo speakers and Fire TV.
“This new Prime benefit at Whole Foods Market is a perfect pairing of healthy and delicious food at even more affordable prices,” said Cem Sibay, vice president, Amazon Prime, in a statement about the discount program’s launch. “Our vision is that every day Prime makes your life better, easier and more fun, and shopping at Whole Foods Market with exclusive deals and savings is all of this and more.”
News Source = techcrunch.com
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