Market Conditions: Best July in Chicago Since 2005 as Sales Jump 17.2%
The July data is out from the Illinois Association of Realtors and July continued the hot streak in Chicago’s housing market.
In the city of Chicago, home sales (single-family and condominiums) in July 2021 totaled 3,273 homes sold, up 17.2 percent from July 2020 sales of 2,793 homes.
The median price of a home in Chicago in July 2021 was $345,000, up 5.3 percent compared to July 2020 when it was $327,500.
Here’s the July data since 1997 (thanks, once again, to G for the historic info):
- 1997: 1,694
- 1998: 2,139
- 1999: 2,186
- 2000: 2,013
- 2001: 2,410
- 2002: 2,661
- 2003: 3,105
- 2004: 3,429
- 2005: 3,487
- 2006: 3,088
- 2007: 2,819
- 2008: 2,200
- 2009: 2,040
- 2010: 1,631
- 2011: 1,666
- 2012: 2,088
- 2013: 2,902
- 2014: 2,725
- 2015: 3,082
- 2016: 2,780
- 2017: 2,698
- 2018: 2,803
- 2019: 2,708
- 2020: 2,793
- 2021: 3,273
Condo sales continue to drive the Chicago market, with 2241 of the 3273 sales coming from the condo market.
“In July, we saw attached home sales increase 28.4 percent, while single-family home sales decreased 1.4 percent. This is the first time we’ve seen a decrease in single-family home sales since the beginning of the COVID-19 pandemic,” said Nykea Pippion McGriff, president of the Chicago Association of REALTORS® and vice president of strategic growth at Coldwell Banker Realty.
“Homebuyers that were priced out of the single-family market earlier this year are being more conscientious of a home’s value and could be turning to attached homes to find the home of their dreams.”
Statewide inventory continues to drop, falling 30% to 31,425 from 44,864 last year.
In 2019, statewide inventory was at 59,600. It’s been slashed in half.
Number of days on the market continues to plunge, as well.
Statewide market times:
- 2016: 53 days
- 2017: 47 days
- 2018: 44 days
- 2019: 43 days
- 2020: 50 days
- 2021: 24 days
“While the tight inventory continued to help many sellers get more than their asking prices, it appears the number of potential buyers started to dry up as the summer selling season winds down,” says Sue Miller, President of Illinois REALTORS® and designated managing broker of Coldwell Banker Real Estate Group in McHenry.
In Chicago, inventory fell 9.8% year-over-year to 8730 from 9178 properties.
Days on the market in the city declined 19.4% to 29 from 36 in July 2020.
Mortgage rates continue to be favorable with the 30-year fixed rate mortgage averaging 2.87% in July, down from 2.97% in June 2021 and also lower than July 2020’s 3.02%.
But some real estate experts see the typical fall slowdown emerging.
“While prices continue to grow in both Illinois and Chicago, sales are forecast to decline over the next few months, a usual pattern for August, September and October,” said Geoffrey J.D. Hewings, emeritus director of the Regional Economics Applications Laboratory (REAL) at the University of Illinois.
“Sales levels will be below those recorded in 2020, but still above those for 2019.”
Is the market returning to its normal seasonal patterns after the home buying binge of the last 16 months?
Home sellers got top dollar for their homes in July [Illinois Association of Realtors, Press Release, by Stephanie Sievers, August 23, 2021]
The Chicago Plan Commission just approved this 50 single family home development from Lexington Homes in Norwood Park.
They will start at $700,000.
The city needs more of these developments to meet single family home demand.
https://urbanize.city/chicago/post/norwood-park-development-fifty-single-family-homes-lexington-square
“The city needs more of these developments to meet single family home demand. ”
——————————
Using the rule of thumb that one can afford a house worth 2.5 times gross annual income, these houses require gross family income of $280,000 annually. That’s a very small percentage of Chicago families.
No way do “these developments” meet Chicago’s needs.
Wake me up when “these developments” sell for $200,000 a unit.
More housing = good
“Using the rule of thumb that one can afford a house worth 2.5 times gross annual income”
That’s the rule of thumb from when you lived in B’town, and mortgage interest rates were close to double digits.
It’s at least 3, possibly close to 4, *assuming* you have 20%.
The underlying point still stands, but I think that the wake me up number is more like $300. Meaning that “what the city needs” is townhouse/rowhouse developments in “marginal” neighborhoods.
Anyway this:
https://www.redfin.com/IL/Chicago/2859-W-Congress-Pkwy-60612/unit-A/home/175168503
Is much more like what “Chicago needs” than $800k SFHs in Norwood.
Or this:
https://www.redfin.com/IL/Chicago/2665-W-Maypole-Ave-60612/home/147815758
But as more than a one-off infill.
“They will start at $700,000.
The city needs more of these developments to meet single family home demand.”
Huh? $700K in Norwood Park? Ok. Sure. Let’s see how that goes…. New SFH for $500 – $600 probably works there.
As far as what the city needs is more homes <$500.
Here's one that's been on the market there since May with one price cut now at $694M….
https://www.redfin.com/IL/Chicago/5916-N-Merrimac-Ave-60646/home/13511160
Bringing Naperville to the city!
$700k for Norwood park?
The 15 guest parking spots are going to be an issue. Cant see the Oldfolks homes and existing neighbors being keen on this as overflow is going into these areas. Would have been nice if they could use the HS as peak demand is staggered
Also, doesnt look like any garages, just parking pads (Hard to tell with the rendering)
“The city needs more of these developments to meet single family home demand.”
Make Chicago a White Chocolate UMC city
“https://www.redfin.com/IL/Chicago/2665-W-Maypole-Ave-60612/home/147815758”
Funny that they can squeeze the same “Lux” finishes into a $400k SFH and a $750k condo. (And yes I know land values…)
” https://www.redfin.com/IL/Chicago/5916-N-Merrimac-Ave-60646/home/13511160 ”
“completely rehabbed in 2017”
Last listing sez:
“rehabbed in 2016!”
What’s the problem with this house??
“yes I know land values…”
The Maypole one was a Land Bank sale–$1,000 mortgage is all it cost.
3-unit condo in the GZ, the first $750k condo *might* cover the purchase price + demo. Even if builders wanted to, they can’t build 3 $400k condos on $750k of dirt.
Wasnt commenting on land, rather that whats viewed as “Lux” can be had in a sub $400k SFH.
Shit throw $20k in appliance upgrades and you’d be comparable to the finishes on a $1MM condo
“$700k for Norwood park?”
Yep. Time to get into this century for all the bears.
Norwood Park is not “middle class” anymore and hasn’t been for a decade. All of NW Chicago is expensive now. Highly desirable part of the city.
No new construction on the north side is going to be $400,000 or below. Those days are gone. Heck, hard to find even on the south side now. New construction homes in Bronzeville and Woodlawn are starting at $600,000 to $650,000.
“Huh? $700K in Norwood Park? Ok. Sure. Let’s see how that goes…. New SFH for $500 – $600 probably works there.”
They will sell them within weeks. Even before building.
Builders are having no trouble selling $650,000 SFHs in Bronzeville. They sold out $550,000 new construction homes in Irving Park pre-pandemic and that was before the market got this hot.
Bears gotta do what they do: live in denial about what the reality is of Chicago’s housing market. It’s red hot. And there is NO inventory. And people want to live in the city- not the suburbs.
This is a rare new construction SFH development. Lots of demand for this.
“Meaning that “what the city needs” is townhouse/rowhouse developments in “marginal” neighborhoods.”
I didn’t say it didn’t.
It needs more single family home and townhouse developments everywhere. But the developers can’t get the land cheap enough to build them for $300k or $400k even in non-GreenZone neighborhoods.
Lots of open lots in Englewood. I hope some developers invest there.
Wake me up when “these developments” sell for $200,000 a unit.
Those days are gone. The city is expensive, johnc. A couple of years ago, you could still buy a bungalow on the south side for around $100,000 or $125,000. But with the housing market this hot, those have doubled now.
So, you can buy an old brick bungalow for about $200,000 in some locations johnc. But you’re not getting anything “new” at that price point.
By the way, this development on Goose Island also just got approved by the Chicago Plan Commission.
It rocks.
Will take 20 years to build it all out, apparently.
I hope they get the financing to start construction next year. Thousands of apartments.
https://urbanize.city/chicago/post/halsted-pointe-five-tower-goose-island-development
“That’s the rule of thumb from when you lived in B’town, and mortgage interest rates were close to double digits.
It’s at least 3, possibly close to 4, *assuming* you have 20%.”
—————————————–
Your 3 or 4 X income rule only works if the buyer can get a fixed rate 30 year mortgage, which takes a lot of financing options for starter homes off the table. Then there’s the fact that life happens: wife preggers, job loss, accident, etc. 3 or 4 X leaves no room to maneuver. Does give a fatter commission to the RE shills though.
And twenty percent of $700k is $140,000. How many people carry that much ready ?
“the developers can’t get the land cheap enough to build them for $300k or $400k even in non-GreenZone neighborhoods.”
So…the two places I linked do don’t exist??
“And twenty percent of $700k is $140,000.”
What the fuck?? First, we were both talking about median-income-type affordable, which we both agree ain’t $700k. Second, let’s look at some math on a $75k HHI (which is about right for median worker HHI in the city):
“affordable” = 30% of gross, but we want to be a little more careful, so we’ll go to 24%–$18k, or $1500/month. What does a $300k place, with 20% down, pencil out at? Yeah, right around $1500/month for PITI.
Third, yes, scraping together the $60k ain’t easy which is why I emphasized that aspect–if you have it, close to 4x works. And PITI under 25% of gross *is* affordable.
Here I am being compared to a bear by Sabrina, and a shill by the Original Bucktown Truther. TGIF!
“Will take 20 years to build it all out”
Where’d you see that? Onni has said “10-plus”, but I’ve not seen 20 anywhere.
“Huh? $700K in Norwood Park? Ok. Sure. Let’s see how that goes…. New SFH for $500 – $600 probably works there.”
Always look at the data. That development is on the edge of a census tract with a median household income of 87K. To the west of that there is one at 93K and further west one at 102K. Those are actually pretty high for Chicago.
As a point of comparison my neighborhood in East Village is at 91K with several SFHs that have sold around 1.5 MM.
I’m seeing more townhouses in the $550,000 – $650,000 range linger on the market. I have my eye on several and am hoping one comes down in price as we move into fall.
The suburbs still seem overpriced at this point. I was talking to a realtor who recommended holding off if I wanted to move to the suburbs. He said he’s had clients already wanting to move back to the city because their offices are moving to hybrid. I think I’m more of a city mouse than suburbanite anyway.
It’s such a frustrating market. I am feeling a little trapped at this point.
they were talking about that goose island development like 4 years ago… hilarious it just now got approved
“they were talking about that goose island development like 4 years ago… hilarious it just now got approved”
I think you’re thinking about another development Sonies. There are several on that side of the river including the old Tribune printing plant development which was expected to be several high rises and was proposed several years ago.
This Goose Island one is a recent one. They’ve moved fast and the approval has come quickly, actually.
That is a MASSIVE building on the corner. Area can handle the height but it’s going to set a new standard for the River. That’s why I’ve said they need to put water taxi stops at all of these new developments. More important than ever.
10 high rises got approved by the plan commission last week including the Goose Island development, several in the Loop, at least one in the West Loop.
Chicago is just red-hot right now.
“Huh? $700K in Norwood Park? Ok. Sure. Let’s see how that goes…. New SFH for $500 – $600 probably works there.”
Here’s some new construction in Oakland.
It’s a 4-bedroom townhouse. Not even a single family home.
$699,000.
https://www.redfin.com/IL/Chicago/3901-S-Lake-Park-Ave-60653/unit-B/home/175409923
sonies,
Regarding Goose Island development:
Onni bought the land in 2019, according to the Tribune. They didn’t reveal what they were going to do with the site until Feb 2020, just as COVID was hitting. But nothing formal was submitted.
Obviously, with the city being doomed (per the bears), their proposal was not submitted to the Plan Commission in 2020.
They formally unveiled it to the public, and Alderman, in April of this year.
Approval by August 2021.
I’d say that’s pretty swift. It was less than 6 months from the time they did their big presentation.
Obviously, getting funding in 2020 wasn’t going to happen which is why they waited until the economic uncertainty cleared up this year.
“Onni Group bought the Greyhound bus maintenance facility on Goose Island for $38 million just over a year ago, and the developer has yet to unveil specific designs or renderings to neighborhood groups or 27th Ward Ald. Walter Burnett.”
“It’s still in the early stages,” Wlodarczak said. “We’re still working with the community, the alderman and the city to determine what we can potentially develop on the site.”
https://www.chicagotribune.com/columns/ryan-ori/ct-biz-goose-island-2500-apartments-ryan-ori-20200211-maltoenyqrbhvpkedistrqnlle-story.html
“He said he’s had clients already wanting to move back to the city because their offices are moving to hybrid.”
There’s going to be a LOT of buyer’s remorse when all of them have to get on those Metra trains to come downtown 2 or 3 days a week.
But I know of some people who moved to the suburbs because they were simply priced out of the city. They wanted to buy in the $300,000 to $400,000 price range and didn’t want to be away from shops/restaurants etc.
They can get that in some of the downtowns in the suburbs, so why not move?
Apparently, I’m not the only one who thinks that Chicago Public Schools aren’t the issue for most home buyers anymore.
Things have changed because CPS has gotten much better over the last 2 decades.
From the Washington Post:
What happens when a school district improves and hardly anyone notices?
I ask because for the past couple of decades, Chicago Public Schools (CPS) has improved. A lot. And yet, that probably comes as news, even to many who pay attention to education.
Here are a few data points. From 2007 to 2019, high school graduation rates rose from 60 percent to 82 percent. In 2018, 63 percent of high school graduates enrolled immediately in two- or four-year colleges, compared with 50 percent in 2006 — and that rate held fairly steady last year in the face of covid-19. Achievement in reading and math has improved since the early 2000s, as measured by the National Assessment of Educational Progress.
On Illinois reading and math assessments, CPS third-graders score below the national average, but by eighth grade they are pretty much at the national average. In a 2020 analysis by Sean Reardon, professor of poverty and inequality in education at Stanford University, Chicago emerged as the only large district that can boast this kind of student growth, a huge turnaround for the district.
https://www.washingtonpost.com/opinions/2021/08/26/chicago-public-schools-dysfunction-success-data-media/
ah yeah you’re right I was confusing it with that thing on Chicago/Halsted and the river
“The suburbs still seem overpriced at this point. I was talking to a realtor who recommended holding off if I wanted to move to the suburbs. He said he’s had clients already wanting to move back to the city because their offices are moving to hybrid.”
So, suburban clients of this esteemed real estate professional, because their offices are moving towards hybrid instead of fully WFH, are inclined to pull their kids out of their schools, quit sports teams, and bid farewll to neighborhood friends, so that their part-time commute will be shorter. Hmm.
Not everyone has school age children, anonny. It’s also only a trickle of people wanting to move back for now. Those with kids may reconsider their option to move next summer after dealing with choosing between the ever-delayed, germ filled Metra or sitting in traffic in their cars.
sonies wasn’t entirely wrong, it just wasn’t specifically Onni 4.5 years ago:
https://www.chicagobusiness.com/article/20170126/CRED03/170129890/greyhound-putting-site-up-for-sale-on-chicago-s-goose-island
“JLL Managing Director Tom Kirschbraun declined to provide an asking price, but said Greyhound decided to put the site on the market after receiving unsolicited offers of more than $50 million from developers. ”
the sale price to Onni was $38m–but it’s possible that there was a kicker if they got X zoning by Y date.
“As a point of comparison my neighborhood in East Village is at 91K with several SFHs that have sold around 1.5 MM.”
I’m not sure this is good comparison. Norwood Park is more family 62% vs. 40% in Ukrainian Village and the median age is a decade older at 43.
Significantly more renters in UKV then Norwood as well. There’s significantly more delta in the median income of someone living in UKV than in Norwood Park i.e. more people living close to poverty and more people making mid 6 figures in UKV compared to Norwood.
I looked at the same website for Norwood Park as well. Would post but can’t do two links.
https://www.point2homes.com/US/Neighborhood/IL/Chicago/Ukrainian-Village-Demographics.html
“Not everyone has school age children, anonny.”
But the vast majority do, right? Why would people without kids (and not planning on having them) buy a house in the suburbs (and these are people who had previously lived in the city, i.e., city people)? To pay more in taxes and have worse dining/entertainment/cultural options and be farther from work?
“It’s also only a trickle of people wanting to move back for now. Those with kids may reconsider their option to move next summer after dealing with choosing between the ever-delayed, germ filled Metra or sitting in traffic in their cars.”
So they’re moving to the Loop or RN or some other walk-to-the-office area?
I stayed in the GC this summer and commuted to the Loop for a week and a half – via Uber. I wasn’t going to take the el or a bus. Took the Metra up to the burbs once – it was about half full and everyone was wearing a mask.
“Why would people without kids (and not planning on having them) buy a house in the suburbs (and these are people who had previously lived in the city, i.e., city people)? To pay more in taxes and have worse dining/entertainment/cultural options and be farther from work?”
I am thinking of moving to the suburbs. A yard for the dogs would be nice. I’m priced out townhouses near-ish to downtown. I can still afford Skokie or Morton Grove, but am worried that property values will go down when people are forced to go back to the office. I am going to wait to see if one of the townhouses languishing on the market drops in price or wait until next spring and see if prices come down on the far north side or suburbs.
“Why would people without kids (and not planning on having them) buy a house in the suburbs (and these are people who had previously lived in the city, i.e., city people)? To pay more in taxes and have worse dining/entertainment/cultural options and be farther from work?”
They’re priced out anonny.
You can either get the $400,000- $500,000 in Portage Park not near any good transportation or entertainment options or they can buy a house near the train and restaurants in Naperville, Downers Grove, Wheaton, Arlington Heights, Flossmoor, Olympia Fields, Highland Park etc. etc.
“I wasn’t going to take the el or a bus. Took the Metra up to the burbs once – it was about half full and everyone was wearing a mask.”
Why not?
Bus is fine. Everyone mostly wearing masks on them. When the big COVID outbreak reaches Chicago in a few weeks, I would probably avoid them.
Same with Metra. More people will be riding Metra once everyone is back to the office. For now, it’s awesome riding it with a fraction of the riders.
“sonies wasn’t entirely wrong, it just wasn’t specifically Onni 4.5 years ago:”
No, sonies WAS wrong anon(tfo). He came on this site to “mock” the fact that this was proposed years ago and took this long to get done.
But he was 100% incorrect.
Who cares that they were thinking of putting the Greyhound site up for sale? That would be true of EVERY undeveloped site in the city near downtown. Heck, if I had a dollar for every article/discussion about how the Archdiocese is going to sell the Archbishops mansion for a pretty penny, I’d be rich.
Doesn’t mean that it’s a “proposal” that has been in the making for 20+ years and is only NOW getting done.
That’s what he was implying. The Chicago takes years to get something approved.
Wrong!
In fact, this deal went through very, very quickly. As I already said.
Less than 6 months from official proposal to approval by the Plan Commission. Hopefully they will start construction next year, as they hope to do.
It’s just sonies trying to rip on Chicago.
“ah yeah you’re right I was confusing it with that thing on Chicago/Halsted and the river”
Yeah- the Chicago Tribune site has NOT been approved or seriously floated even though that has been in the news for a number of years now.
When they finally do build something there, sonies, you can be on here ripping the time it took for them to approve it. Lol.
“But the vast majority do, right? Why would people without kids (and not planning on having them) buy a house in the suburbs (and these are people who had previously lived in the city, i.e., city people)? To pay more in taxes and have worse dining/entertainment/cultural options and be farther from work?”
anonny, here’s what you get in the city.
This is a $475,000 remodel in Jefferson Park.
https://www.redfin.com/IL/Chicago/5043-W-Ainslie-St-60630/unit-HOUSE/home/13495692%5D
Why not live in LaGrange Park or Berwyn?
“Doesn’t mean that it’s a “proposal” that has been in the making for 20+ years and is only NOW getting done.”
WTF? No one suggested 20 years except your strawman.
And the offers Greyhound “received” were premised on the rezoning of the land out of the PMD, as the Crain’s article suggested.
Onni got it done pretty quickly, but it was a process that was set in motion in 2017–which is part of where someone could get the idea that it took a long time.
“When they finally do build something there, sonies, you can be on here ripping the time it took for them to approve it.”
Not by your standard.
The recently scrapped plan for the north portion of the cite was proposed in 2017, and approved by the Plan Commission in 2018; and the south portion was also approved in 2018, and has been in limbo since Tribune’s real estate was sold:
https://urbanize.city/chicago/post/developer-scraps-plan-four-building-megaproject-river-west
Until Onni turns a shovel, these projects are in much the same position: approved, but not built.
“More people will be riding Metra once everyone is back to the office. For now, it’s awesome riding it with a fraction of the riders.”
Wait you don’t even live in Chicago yet constantly say to others they don’t know what they are talking about because they don’t live in Chicago?
The shill has hit a new low.
“Wait you don’t even live in Chicago yet constantly say to others they don’t know what they are talking about because they don’t live in Chicago?”
Why do you assume that I don’t live in Chicago just because I ride the Metra?
I love trains. I routinely take it to visit friends, especially to Oak Park, Hinsdale, Naperville. I also recommend taking it to the Botanical Gardens or out to Woodstock.
I’m excited that Amtrak is going to add direct service to Rockford. It has several great gardens and they’re really rehabbing the downtown with restaurants, hotels, apartments. It’s so much easier to take the train than to drive.
“But he was 100% incorrect.”
Pot meet kettle
“Why do you assume that I don’t live in Chicago just because I ride the Metra?”
Has almost nothing to do with whether you ride Metra or not. It’s everything else.
“Has almost nothing to do with whether you ride Metra or not. It’s everything else.”
Sure Jan.
Nowhere in this post does it mention that there remains an eviction moratorium until October 3rd. So there is no effective market right now.
This post tries to compare current data points with past while completely ignoring the elephant in the room that is massive government intervention in the housing market via these moratoriums.
“Nowhere in this post does it mention that there remains an eviction moratorium until October 3rd.”
It’s currently until September 18th in Illinois. The Federal Moratorium was struck down by the supreme court a week or two ago as Congress needs to legislate the issue given the CDC overstepped their authority in issuing the ban,
“This post tries to compare current data points with past while completely ignoring the elephant in the room that is massive government intervention in the housing market via these moratoriums.”
This is effecting the rental market much more than the buying market at this point.
Just posted my August update: https://www.chicagonow.com/getting-real/2021/09/chicago-real-estate-market-update-highest-august-sales-in-14-years/
Sales were up 8.7% from 2019, almost entirely driven by condo sales. Yeah, sales are returning to normal but we should have at least one more month with decent growth. Still record low inventories and super fast sales.
Thanks for the update Gary.
Still some pretty hot numbers. We’re getting to the period where it’s going to be hard to lap last year’s red hot numbers. Not a surprise. But based on a “regular” year, it’s still really hot.
Pending and contracts also indicate the strong market is continuing.
It’s nice to see the falling inventory in condos as downtown inventory gets absorbed. Lots of buyers are snapping up the “deals” in downtown condos.
It looks like the market is trying to return to “normal” yet some aspects of it just aren’t quite there yet. Might not happen until next year’s spring buying season.
Remember when Sabrina said Amazon Whole Foods acquisition was a “failure” and that Amazon Go also failed. That I was wrong on saying Amazon’s purchase of Whole Foods will be a success once they iron out the kinks in their “just walk out” technology. Once, this is ironed out that they will dominate the space.
Well here comes the pilots per CNBC. “Amazon is launching its cashierless technology at two Whole Foods stores that are scheduled to open next year.”
Some key issues for the grocery industry today (i) health and safety with Covid, (ii) inflation. This solves both will maintaining and potentially expanding margins. By the end of the decade they will dominate this space.
Also remember they purchased PillPack in the middle of 2018. Wait until that’s fully scaled and integrated into Whole Foods.
https://www.cnbc.com/2021/09/08/amazon-brings-its-cashierless-tech-to-two-whole-foods-stores.html
“Remember when Sabrina said Amazon Whole Foods acquisition was a “failure” and that Amazon Go also failed.”
They are complete failures. AmazonGo has basically shut down. Amazon is launching Amazon Fresh but I expect that to fail as well.
Whole Foods still has horrible margins just like, gasp, Kroger and the other supermarkets.
Whole Foods didn’t drive people into becoming Amazon Prime members as they thought. Also didn’t increase delivery.
Watch what Amazon “highlights” in its quarterly earnings. It’s never Whole Foods, Amazon Go, Amazon Fresh, or the bookstores.
Because Amazon is a failure at brick and mortar. Ha ha.
Ironic.
Also, as AmazonGo proves, no one cares about cashierless technology.
It’s just meaningless.
People go to Whole Foods to talk to people. To look at the food. To chat with the cashier. Others who don’t, order for delivery.
“Whole Foods still has horrible margins just like, gasp, Kroger and the other supermarkets”
You know how you improve those margins. Implementing the cashierless technology. Not only are you able to reduce labor costs but you can better maximize the square footage of the store by adding new/more products or shrinking the size.
A new product could be adding those pharmacies.
“Also didn’t increase delivery.”
Yet. its very early innings.
“AmazonGo has basically shut down”
They are open in the loop.
“Amazon is launching Amazon Fresh but I expect that to fail as well.”
LOL. Ok. Also, it Launched already.
“Because Amazon is a failure at brick and mortar.”
Betting against America are we?
” It’s never Whole Foods, Amazon Go, Amazon Fresh, or the bookstores.”
From their six page Q2 2021 earnings announcement highlights:
“For the first time, Amazon brought Just Walk Out technology to a full-sized grocery store, offering customers in Bellevue, Washington the option to skip the checkout line or use traditional checkout. Amazon Fresh now has 15 stores in the U.S. and five in the UK.”
Further, their physical store sales grew 11% YoY but i guess that’s “failure”.
https://s2.q4cdn.com/299287126/files/doc_financials/2021/q2/AMZN-Q2-2021-Earnings-Release.pdf
“no one cares about cashierless technology.”
LOL! Explain why Apple and Google want to turn your phone into your wallet? Explain Apple lobbying state legislatures to amend rules to make this happen quicker.
“It’s just meaningless.”
You are just clueless then. If you are a non-tech boomer I get why you think its meaningless.
“People go to Whole Foods to talk to people. To look at the food. To chat with the cashier. Others who don’t, order for delivery.”
This ain’t the 90’s. People “talk” and meet each other by typing on their phones. You think Bumble’s and Match Group’s market cap is $11.5Bn and $41Bn respectively because people want to talk to each other at the grocery store in person?
The Food Holes I have been in recently suck ass. Product mix is worse, whole experience is worse, bordering on a delivery warehouse–and haven’t been one who has been heavy prepared-food user.
Anyone have a good alternative grocery (even single location!) that’s a middle-high, full-line (don’t care about prepared food) store north of Roosevelt and east of Harlem? Find the Mariano’s I’ve been in (haven’t been to all of them) underwhelming.
“their physical store sales grew 11% YoY”
After being down 13% last year, so 3% below 2Q19. Which, as you note by implication, includes sales at new stores.
They’re going to push certain last mile delivery back to consumers, so I’m at worst neutral on the prospects, but that’s an odd number to pick.
Will be interesting when we see the Fresh stores start popping up in the city, and in new developments.
“LOL! Explain why Apple and Google want to turn your phone into your wallet? Explain Apple lobbying state legislatures to amend rules to make this happen quicker.”
Um…this isn’t the same thing.
I can use my phone to buy my Starbucks right now. The cashier is still standing there.
AmazonGo’s failure proved that no one cares about the “toys” of retail. They care about the product. AmazonGo’s product was awful.
Consumers will go to Whole Foods for its products, not because they can put some items in a bag and walk out without stopping.
“Not only are you able to reduce labor costs but you can better maximize the square footage of the store by adding new/more products or shrinking the size.”
Nah. As AmazonGo stores showed, and all of the stores with “self-serve” kiosks show too, you still need someone standing there. You still need people to stock the shelves and help the customers.
It’s not going to reduce costs enough.
If you’re buying Amazon’s stock because of their push into supermarkets, then I don’t know what to say. The company has never been a success at brick and mortar. They aren’t going to start doing so now.
“Um…this isn’t the same thing.
I can use my phone to buy my Starbucks right now. The cashier is still standing there.”
Different customer experience, time investment and profit margins. People want (or think) the experience of a hand made drink.
“ Nah. As AmazonGo stores showed, and all of the stores with “self-serve” kiosks show too, you still need someone standing there. You still need people to stock the shelves and help the customers.”
1 Vs 4. People said the same thing about their DC’s
“ If you’re buying Amazon’s stock because of their push into supermarkets, then I don’t know what to say. The company has never been a success at brick and mortar. They aren’t going to start doing so now.”
This isn’t just a supermarket play. It’s a longer term play into retail automation.
“This isn’t just a supermarket play. It’s a longer term play into retail automation.”
Again. If you’re buying Amazon’s stock because of its leadership in “retail automation” in brick and mortar stores, there’s not much more to say.
They have failed in everything they’ve ever done in brick and mortar.
And that’s fine.
It “won” in delivery. Has transformed online shopping.
But even they know there’s only so much you can sell online which is why they are going to attempt to open department stores next.
And I’ll just put it out there: they will fail.
But meanwhile, they will push the current department stores to get better. So it’s all good.
“It “won” in delivery. Has transformed online shopping.”
Because they optimized logistics and supply chain channels more efficiently through technology….
“Again. If you’re buying Amazon’s stock because of its leadership in “retail automation” in brick and mortar stores, there’s not much more to say.”
Again, you buy Amazon stock because of their leadership and ability to disrupt industries that have recurring revenue sources with low customer acquisition costs that haven’t innovative in decades by disrupting the logistics and supply chains of said industry through technology.
Hello industry that has $66 Billion of sales per MONTH in the US.
“Again, you buy Amazon stock because of their leadership and ability to disrupt industries that have recurring revenue sources with low customer acquisition costs that haven’t innovative in decades by disrupting the logistics and supply chains of said industry through technology.”
Please, pray tell, what industries have they disrupted?
They crushed the booksellers. They took out Circuit City but Best Buy has gone on to greatness.
Who, or what, else?
Nothing. Nobody. Nada.
And it was all like 20 years ago now.
I think it’s hilarious that you brought up PillPack, which they bought nearly 4 years ago now. They are somehow still going to get around to “integrating” it? Lol. Pulease.
Remember when they started making mid-century modern furniture and selling it online and everyone said they would crush West Elm?
Lol.
Remember when they had Amazon Marketplace and Etsy was doomed?
Lol.
And on and on.
They are very good as a marketplace and have created an entirely new distribution system. They have AWS which rocks.
They put pressure on others in retail to be better. Hooray!
But as a brick and mortar retailer they are a failure.
“Please, pray tell, what industries have they disrupted?”
I think you’re underestimating (or overlooking) the impact that Amazon has already had, and will continue to have. The impact is not always obvious, and it goes far beyond Amazon itself entering a particular segment of some industry with the goal of being a direct player in that industry. The question should be, what industry has Amazon NOT disrupted? I’ll be curious to see what you, or anyone, posts. Good luck.
“Please, pray tell, what industries have they disrupted?”
This is a joke right? Enterprise IP (AWS) and Retail (private label brands)…..
It has started over the past couple years to take on some large grocers like WalMart (delivery) and Kroger (who recently launched their own online marketplace not to mention Pharamacy).
Go look how much Walgreens, CVS, and Rite-Aid stock dropped the day Amazon made a small $1 billion acquisition of PillPack in 2018.
1 in every 153 American workers is employed by Amazon…..
“They took out Circuit City but Best Buy has gone on to greatness.”
Huh? Circuit City filed due to the financial crises. Amazon doesn’t compete with Best Buy.
“I think it’s hilarious that you brought up PillPack, which they bought nearly 4 years ago now.”
Are you even paying attention? Do you even understand Amazon and its strategy? You think they were going to integrate and scale a $1Bn acquisition in 3 years? This is a long game i.e. 10 – 15 years before they dominate. Not to mention how highly regulated the industry is….
Go look at what Square and other FinTech’s i.e. Crypto companies are trying to do to disrupt one of the most highly regulated industries in the country. It doesn’t happen overnight.
CNBC article from November 2020….
“Pharmacy stocks fell sharply on Tuesday after Amazon launched its new Pharmacy offering, which includes online ordering and delivery for prescription drugs”
“Amazon has been building its pharmacy offerings for several years, including acquiring PillPack in 2018.”
“Investment firm Evercore ISI said in a note to clients that the drug store stocks will continue to struggle until investors can get a better sense of how successful Amazon Pharmacy will be.”
https://www.cnbc.com/2020/11/17/walgreens-drops-11percent-to-lead-drug-store-stocks-lower-after-amazon-launches-pharmacy-business.html
“Go look how much Walgreens, CVS, and Rite-Aid stock dropped the day Amazon made a small $1 billion acquisition of PillPack in 2018.”
Because Wall Street traders are people like you WP who are clueless and buy into the “myth” of the mighty Amazon when it is no such thing?
Etsy shares dropped when they announced Amazon Marketplace too. Lol. It has since CLOSED it down. Meanwhile, Etsy has gone on to make its shareholders richer than Amazon’s.
Same with West Elm. If I only had a dollar every time they were asked if Amazon was going to put them out of business.
Lol.
I think, finally, most sane people have figured out that online retail is great, and growing, but it is still only 20% of all retail. Brick and mortar is still king.
And Amazon sucks at it.
But that’s okay. Like I said. It has plenty of other things it’s doing right.
Amazon reminds me of Alphabet about 10 years ago. Everyone thought they were going to crush competitors too. Remember Google Finance? Remember the Google social media page (I can’t even remember what it was called now…)
Remember Nest and how it was going to make all this money from it? Not so much.
Many of its initiatives bit the dust.
Still the best in search and advertising. And now has YouTube, which lost money for them for years but has finally found its way.
All I’m saying is that if you’re buying Amazon for its brick and mortar prowess, you’re barking up the wrong tree. They are losers in that area. They’ve failed at everything.
“I think you’re underestimating (or overlooking) the impact that Amazon has already had, and will continue to have.”
I’ve said they have forced other retailers to take actions they otherwise might not have taken.
But that is one industry. And hooray! Some retailers didn’t even have e-commerce until 5 or 6 years ago (hard to believe.)
But otherwise?
They aren’t putting anyone out of business like they did in the early years. That is over. Why does everyone think they are still capable of doing it?
Product still matters. Quick or technology is secondary. This is why AmazonGo failed. The food actually stunk. Who cares if you don’t have to stop to pay the cashier?
“Same with West Elm. If I only had a dollar every time they were asked if Amazon was going to put them out of business.“
Said no one ever
“ They aren’t putting anyone out of business like they did in the early years. That is over. Why does everyone think they are still capable of doing it?”
Maybe because they’re competing with companies with deep pocketbooks?
You’ll never acknowledge it but independent bookstores that actually provide a service are raking it right now (1st hand knowledge – not your wave your hand BS) That’s what the retail market place is going to look like. If you want to go back to the days of Walden, Borders, etc – 80% of staff wern’t knowledgeable and why pay 50% more for the same product.?
“ Product still matters. Quick or technology is secondary.”
LOL. Why am I going to pay a 75% premium for a Weber Grill grate when I can buy a replacement grate (90% chance it was manufactured in the same Chinese plant as Weber) for 75% less?
“Said no one ever”
Only on every single conference call for years. But okay JohnnyU. You keep being you.
“ Only on every single conference call for years. But okay JohnnyU. You keep being you.”
Second box of wine tonight?
Let me know where I can find these West Elm conference calls. Maybe WS?
“They aren’t putting anyone out of business like they did in the early years.”
I don’t think that most people equate “disrupt” (even self-styled “disrupters”) with “put out of business.” Again, pick an industry that you feel has not been disrupted by Amazon (i.e., a significant impact on how things operate in that industry, with respect to companies, employees, investors, vendors, supply chains, customers, landlords, developers, etc.).
“Etsy has gone on to make its shareholders richer than Amazon’s.” “Same with West Elm. If I only had a dollar every time they were asked if Amazon was going to put them out of business.”
The individual(s) saying Amazon would put West Elm or Etsy out of business doesn’t understand the differences between Etsy and West Elm compared to Amazon. You can throw WayFair into this mix as well.
“Some retailers didn’t even have e-commerce until 5 or 6 years ago (hard to believe.)”
Because of Amazon’s success and increased market share these entities finally realized they needed to focus and invest in technology or go the way of the dinosaur.
Most of them likely use AWS as well. Ironic.
“Who cares if you don’t have to stop to pay the cashier?”
I do. When self-checkout initially popped up at grocery stores (around 7 years ago?) I avoided them as I couldn’t comprehend having to scan and bag my own groceries.
Over the past 4 to 5 years I exclusively use the self check-out and every store unless I have $200+ in the shopping cart.
I also avoid the fresh meat and cheese section as I can’t stand waiting 10 minutes for the carver to be done with the one or two people in front of me. I would much rather order this through an app and pick it up at a certain time to be more efficient and spend less time in the actual store.
Grocery stores need to figure that one out already.
“Maybe because they’re competing with companies with deep pocketbooks?”
Who also have access to cheap, long-term financing in the capital markets thanks to the Fed.
“Only on every single conference call for years.”
So, AMZN launched Rivet and Stone & Beam in 4q17:
https://www.architecturaldigest.com/story/amazon-launches-rivet-and-stone-and-beam-two-new-furniture-and-home-decor-brands
Quarterly analyst calls for W-S, call it 3 this year so far, makes 16 calls since launch.
Sounds like Sabrina might have as much as $40. WOW!
“So, AMZN launched Rivet and Stone & Beam in 4q17:”
Yep. It’s gone nowhere and done nothing.
So much for it being a “threat” to West Elm.
Pulease.
It’s laughable now. All of it.
Amazon is fine, when it stays in its lane. And that lane is being an online marketplace. Sells quantity. Not quality. Nothing wrong with that.
“I also avoid the fresh meat and cheese section as I can’t stand waiting 10 minutes for the carver to be done with the one or two people in front of me.”
How sad WP. Food is meant to be enjoyed. Same with shopping.
But you and Jeff Bezos are kindred spirits on this. He, too, thought “fast” would win. But he was wrong.
Why do you think everyone is STILL going to local farmers markets?
Lol.
Those that make food shopping an experience will still win. Or in any retail, for that matter.
People want to connect with other humans. GenZ is all about going to the mall and into the shops. Thank goodness the youngest generation actually gets it. They’re going to save us all.
“The individual(s) saying Amazon would put West Elm or Etsy out of business doesn’t understand the differences between Etsy and West Elm compared to Amazon. You can throw WayFair into this mix as well.”
Huh?
Amazon launched Amazon Homemade which was a DIRECT challenger to Etsy.
It failed.
“Let me know where I can find these West Elm conference calls. Maybe WS?”
Boy, stupid is as stupid does.
Williams-Sonoma owns the brand. Again, they were asked on every conference call for several years after Amazon “announced” it would start its own furniture lines. Analysts also panicked and asked other furniture makers like RH and Ethan Allan if they thought they’d be put out of business.
Lol.
It’s laughable now, but such is the “myth” of Amazon (and yes, it IS a myth) that just because they enter into a new area/product that they will dominate. They haven’t dominated anything in a decade. Every new area they’ve entered into in retail has failed.
They have enough money they can keep throwing stuff up onto the wall and see what sticks.
But they spent YEARS and quite a lot of money perfecting the technology for AmazonGo without anyone actually asking “do we need this?” or asking if the underlying products (the sandwiches and chips they sold) were any good.
Technology, alone, is never enough.
But Jassy is in charge now. He may view things differently than Bezos and right the ship.
“ Williams-Sonoma owns the brand. Again, they were asked on every conference call for several years after Amazon “announced” it would start its own furniture lines. Analysts also panicked and asked other furniture makers like RH and Ethan Allan if they thought they’d be put out of business.”
Glad you figured this out after 2 posters pointed it out, must have sobered up enough to grasp the concept
Have a drink on me!
“Glad you figured this out after 2 posters pointed it out, must have sobered up enough to grasp the concept”
Yep- I think I’m the only one on this site who even knew that West Elm was owned by Williams-Sonoma.
Glad you’re understanding what is going on now JohnnyU.
Again: Amazon was NEVER going to take out West Elm. That anyone thinks they would is laughable. Also, West Elm was already heavily into e-commerce when Amazon announced Rivet and its other furniture lines. It has done more than 50% online for years. Thanks to the pandemic, however, Williams-Sonoma total online has jumped to 65% of total revenue. But then, Williams-Sonoma has really grown their marketplace business in the last 2 years.
Yeah- there are plenty of other “competitors” to Amazon even on the marketplace side. Plenty of business for everyone. Even if Williams-Sonoma grows its marketplace to $1 billion, that’s a sliver of Amazon’s business. But it shows, if you offer exclusives, you can take market share away from Amazon. Even if you’re not providing free delivery. Gasp.
Hey- remember when Amazon launched its luxury online marketplace?
I wonder how that’s going. Hm.
Doubtful Farfetch is too worried about it.
Because Amazon ran book stores off in <4 years?
Cheers!
“Because Amazon ran book stores off in <4 years?"
Huh???
That was 20+ years ago.
It's laughable that you're on here STILL arguing that Amazon is taking out competitors. It hasn't done anything of the sort in the last 10 years.
But I'm done trying to educate you all about big business. But maybe you should pick up a Wall Street Journal every once in a while.
“- I think I’m the only one on this site who even knew that West Elm was owned by Williams-Sonoma.”
GTFO! Troll.
“It’s laughable that you’re on here STILL arguing that Amazon is taking out competitors.”
Per usual you have an absolutism binary take. The relevant metric is market share i.e. growth not Amazon failed because the competition isn’t bankrupted.
What a bizarre take.
“The relevant metric is market share i.e. growth not Amazon failed because the competition isn’t bankrupted.”
Huh?
Amazon is literally LOSING market share in some of these businesses. It’s so bad in some areas, they just shut down their supposed “dominating” business, such as with Amazon Handmade.
Take PillPack. Haven’t done shit with it in 3 years. Would anyone be surprised if it just quietly went away?
Nope.
It’s a “myth” that Amazon is going to take out any business at this point. Or even take market share. At least in the United States.
“GTFO! Troll.”
Ya all had to go look it up because you had no clue. Tried to act like I didn’t know that they’re owned by Williams-Sonoma when I have, literally, listened to their conference calls for 5+ years.
Lol.
You all are so clueless. Stay in your lane, which clearly ISN’T anything business related as this discussion about Amazon and West Elm makes clear.
“Take PillPack. Haven’t done shit with it in 3 years. Would anyone be surprised if it just quietly went away?”
I literally posted a CNBC article on Amazon’s Pillpack initiatives from November. They are doing alot with it. It’s an acquisition that will take 10 – 15 years to scale. We are on year 5.
They literally just launched their pharmacy business given all of the regulatory approvals they needed from States and the Feds along with negotiations with the insurance companies.
https://www.cnbc.com/2020/11/17/walgreens-drops-11percent-to-lead-drug-store-stocks-lower-after-amazon-launches-pharmacy-business.html
“It’s an acquisition that will take 10 – 15 years to scale.”
Like Rivet?
Amazon Handmade?
Amazon Luxury? (has it died already?)
AmazonGo?
365 stores (they shut those within a year or two)
And on and on and on.
I use PillPack and hope they don’t go out of business. It’s very convenient and now I always know if I forget to take my medication.
““It’s an acquisition that will take 10 – 15 years to scale.”
Like Rivet?
Amazon Handmade?
Amazon Luxury? (has it died already?)
AmazonGo?
365 stores (they shut those within a year or two)”
Rivet was an acquisition?
Amazon Handmade was an acquisition?
Amazon Luxury was an acquisition?
AmazonGo was an acquisition?
365 stores was part of an acquisition, is in an area that you repeatedly tell us AMZN sucks at, and is functionally being replaced by Amazon Fresh stores, anyway. So it’s completely different.
Interesting look at census data:
https://twitter.com/petesaunders3/status/1437764591879172104
Overall Chicago grew by 1.9% between 2010-2020. But the split between the growing lakefront (9.5%) and the rest of the city (-3.3%) is pretty wide.
“Overall Chicago grew by 1.9% between 2010-2020. But the split between the growing lakefront (9.5%) and the rest of the city (-3.3%) is pretty wide.”
Downtown came roaring back after the Great Recession. Literally something like 50,000 new jobs created downtown. Needed to make new housing, which they did. How many new apartments were built near the lakefront and downtown? 20,000+
Millennials want to be in the city. They are moving to Chicago for their careers and living near the lakefront.
People have been leaving the outer neighborhoods for years so this isn’t surprising that the census confirmed it. All you have to do is look at school attendance and school closures.
“People have been leaving the outer neighborhoods for years so this isn’t surprising that the census confirmed it. All you have to do is look at school attendance and school closures.”
You’re saying the silent part out loud
I found this interesting:
Logan Square (22), West Town (24) and the Lower West Side/Pilsen (31) grew more slowly, adding just 1.3% (190k to 193k). There’s been lots of development there but growth is impacted by the number of singles/couples moving in and replacing families.
“There’s been lots of development there but growth is impacted by the number of singles/couples moving in and replacing families.”
there is also the number of families replacing 3-4 (or 8) families, when multiunit replaced by SFH.
And replacing 18 1-beds with 6 3-beds may seem equal, but usually isn’t–even if it’s “families” replacing singles/couples.
“All you have to do is look at school attendance and school closures.”
“You’re saying the silent part out loud”
Won’t be able to see it from school closures for a few years now.
Of course, were I on the Board, I would assign no attendance area to the schools I want to close–school gets the base budgeting amount that pays for principal, etc., but zero SBB, so no teachers at the school. It’s “open”, but zero attendance.
“Won’t be able to see it from school closures for a few years now.”
Huh?
All Rahm did was close schools. All of that is reflected in the census.
The census just doesn’t support the bears view that the city is doomed. It clearly is not. Is it gentrifying near the lakefront? Yes. Which is why the city is trying to get investment out in the neighborhoods.
The hot housing market should help though. And more employers are opening in the neighborhoods, including Discover’s big customer service call center and Amazon distribution facilities. As well as manufacturing at the Ford plant on the south side. More jobs need to come in and more investment in infrastructure in the neighborhoods though.
Another well-known radio host has died of COVID.
https://www.theguardian.com/us-news/2021/sep/14/bob-enyart-radio-host-dies-covid-19-boycott-vaccine-colorado
I think HH can stop arguing now that it’s all a hoax because no one “famous” has died of it.
“Huh?”
ok, that was a little opaque, but someone seems to have gotten it:
CPS can’t close any more schools for several years, per state law. We won’t be able to use that metric to judge depopulation for several years going forward.
Are you SURE you live in Chicago?
“manufacturing at the Ford plant on the south side”
Bad example in 2021.
Are you sure you live here?
“Bad example in 2021.”
Huh?
Ford expanded its plants in Chicago over the last several years including opening another new plant a year ago.
Temporary shutdowns due to a shortage of semiconductors isn’t stopping the story of what Ford is doing on the South Side. It’s a big success story and these are great jobs. They will come back.
This is why the Feds have been paying out the more generous federal unemployment. It expired last week but hopefully these workers were getting it up until the time period when it expired.
“CPS can’t close any more schools for several years, per state law. We won’t be able to use that metric to judge depopulation for several years going forward.”
They were just talking about closing 3 more schools in North Lawndale in order to build a stem school there. But that is just replacing those that aren’t at capacity with something newer that the community wants.
The census is all you need to use to understand what’s going on with the population.
“They were just talking about…”
First, that got killed.
Second, even if it were still percolating, it would be dead now until there is an elected board.
Third, it was the community that killed it.
Are you sure you live here?
So the newest Amazon Fresh store in the metro is using the ‘Go” cashierless tech:
https://www.chicagobusiness.com/retail/amazon-fresh-grocery-store-opens-westmont
Maybe someone can visit and report back.
“Maybe someone can visit and report back.”
It’s dumb and a complete waste of time. They still have cashiers! Because no one will care.
This is the last you will hear about it because they will drop it within a year and then not admit that it failed to catch on.
Most stores can’t even convince people to use self checkout.
Although, on a busy Sunday at Trader Joe’s, being able to load up the cart and just walk out might be kind of nice.
“Most stores can’t even convince people to use self checkout.”
What is “most stores”?
There’s always a line for self checkout at Costco and Target and Home Depot. Usually one in Marianos (will rarely go in, bc they are so poorly run right now). Yes, Jewel rarely has a queue for self-checkout, but the typical Jewel shopper is not the first wave of potential Amazon Fresh shoppers, anyway.
“It’s dumb and a complete waste of time. They still have cashiers! Because no one will care.”
Again wrong. It’s about adoption and the customer base getting used to it. Plenty of people will be curious but don’t want to be intimidated if they don’t know what to do or aren’t yet comfortable with the idea.
You can still deposit a check at a Bank but they will show you how to use your phone to take a picture of it so you don’t have to go to the branch the next time.
Plenty of people will adopt quickly and plenty of people will adopt over time. This is a 10+ year plan. It will be successful.
Why? They are reducing friction in the experience for the customer. Think 10 – 15 years ago when you ran into the store to buy 3 or 4 items for dinner on your way home from work you may have had to wait 20 minutes in the checkout line as the 3 people in front of you each had $200 of groceries. Then came self checkout. Now half the cashier lanes are always closed in the grocery store regardless of what time you go.
Oh and now there is a labor shortage which will continue. Automation will solve this issue. We will adapt and Amazon will continue to work out the kinks over the next few years and will begin to dominate the space.
They will be able to keep costs low for customers while improving margins and create cross-selling opportunities because of this technology. This will help them better control costs of Inventory management, labor, real estate, and delivery.
“This is the last you will hear about it because they will drop it within a year and then not admit that it failed to catch on.”
They spent all this money to close down the stores within one year……
“Most stores can’t even convince people to use self checkout.”
Labor shortages can…..
“Although, on a busy Sunday at Trader Joe’s, being able to load up the cart and just walk out might be kind of nice”
And there you have finally admitted it. You will adopt over time and never go back.
“Again wrong. It’s about adoption and the customer base getting used to it. Plenty of people will be curious but don’t want to be intimidated if they don’t know what to do or aren’t yet comfortable with the idea.”
But AmazonGo has been around for years and NO ONE CARES. The technology isn’t the point. The MERCHANDISE is.
Which is why I said, if Trader Joe’s had it, sure I’d use it. Because they have kick ass merchandise.
Amazon 365? Not so much.
But Amazon has to justify the money it spent developing this technology for AmazonGo. So here it is being put into Amazon Fresh.
Their focus is all wrong. In some areas, consumers love better convenience, but in others, like food, quality and brands actually matter.
This is what they got all wrong with AmazonGo. The sandwiches and other items they carried were crap compared to the Sweetgreen or Panda Express nearby. They were doomed to fail.
The AmazonGo in Ogilvie still hasn’t reopened. But the Panda Express has.
“What is “most stores”?”
Go in Whole Foods. Look around at self-checkout.
Maybe it is supermarkets? Trader Joe’s doesn’t even want to go there because it knows the customers hate it.
When people buy food, they like to talk to people. They like to interact. Costco is a literal “warehouse” so I’m not surprised people are fine using it there.
“Oh and now there is a labor shortage which will continue. Automation will solve this issue. We will adapt and Amazon will continue to work out the kinks over the next few years and will begin to dominate the space.”
But it’s not. Because the store will still have cashiers. And they still need people to stock the shelves and butcher the meat and make the flower arrangement. And now supermarkets are “experiences” so someone needs to operate the cafe, the wine bar and the sushi bar.
Automation will make some of their work more efficient, but you still need humans.
“The technology isn’t the point. The MERCHANDISE is.”
(i) stop comparing Amazon Go to Amazon Fresh. No one does their weekly grocery shopping at BP or 7/11. (ii) The technology and the merchandise are equally important. Without the technology its just another grocery store. Without the merchandise it’s a pop-up marketing concept.
“But Amazon has to justify the money it spent developing this technology for AmazonGo. So here it is being put into Amazon Fresh.”
Stop comparing the two. Again, look at where they are locating the concepts. Ones in the suburbs the other is in the loop. Completely different customer base.
Also, read the suntimes article. The technology will pay for itself through licensing, advertising, expense control, etc.
“Their focus is all wrong.”
$1.7Tn market cap…. but Sabrina knows best….
“The sandwiches and other items they carried were crap compared to the Sweetgreen or Panda Express nearby.”
Sweetgreen is like $15 and Panda is unhealthy and crap. Also, Amazon-Go is targeting people that don’t have time to wait in line at Sweetgreen and Panda. People that go to Amazon Go have 5 minutes or less to grab something and go not stand in line for overpriced lettuce
“The AmazonGo in Ogilvie still hasn’t reopened. But the Panda Express has.”
Probably because Panda Express doesn’t have Panda Prime or Panda AWS or Panda Whole Foods…. they sell orange chicken to live and if they don’t they starve.
AmazonGo can wait until foot traffic actually returns without the fear of going belly up.
“But it’s not. Because the store will still have cashiers. And they still need people to stock the shelves and butcher the meat and make the flower arrangement.”
They will not have dedicated cashiers. The “cashier” will wear multiple hats within the store. Instead of hiring separate people to butcher the meat, cashier, make a flower arrangement, and stock shelves the “cashier” will also be your greeter, flower arranger, and meat carver.
The person stocking the shelves will also help make deliveries and fulfill online orders for curbside pickup.
“Go in Whole Foods. Look around at self-checkout.”
You’ve started going again? Which ones have you been in?
“And now supermarkets are “experiences” so someone needs to operate the cafe, the wine bar and the sushi bar.”
Where’s the TJs with these things? I’d like to visit!
Not all grocers are like that, there can be more than one type of grocery store, and this may work in the “low service” stores.
” the “cashier” will also be your greeter, flower arranger, and meat carver”
I hate that model. I sure hope it doesn’t get to *that*.
But it’s always been inefficient at a grocery store to have enough single-purpose cashiers–maybe a couple, but everyone else should be a stocker or in one of the departments, and trained to be a cashier. Same thing would still be true–but hopefully it’s not one person as greeter, and florist, and butcher, and sushi chef–that’s a recipe for having half of everything being done wrong.
“Maybe it is supermarkets? Trader Joe’s doesn’t even want to go there because it knows the customers hate it.
When people buy food, they like to talk to people. They like to interact. Costco is a literal “warehouse” so I’m not surprised people are fine using it there.”
Why would you want to expose yourself to more Covid risk?
This is simply Sabrina not liking something (self checkout), and then ergo nobody likes it. Since her online persona is a good proxy for real life she cant find anyone that wants to talk to her. Therefore she forces the poor cashier to lister to her pontificate the most asinine bullshit.
The majority of TJ shoppers huff their own farts
“Same thing would still be true–but hopefully it’s not one person as greeter, and florist, and butcher, and sushi chef–that’s a recipe for having half of everything being done wrong.”
Whats the difference anymore?
Sushi chef? – They’re following step by step manual
Butcher? – Best case you could call them a meat cutter, but butchers, nah.
“The majority of TJ shoppers huff their own farts”
I was just in one yesterday, doing a little huffing and some shopping. I was there mainly to replenish our supply of “Everything But the Bagel”, a new TJ-brand product of almonds and cashews coated with everything bagel substance. I purchased all of the packages of it left on the shelf. Really great.
“I was just in one yesterday”
How was the conversation with the cashier?
Did the bagger have clue one on how to put the nuts in a bag?
Did you have time to enjoy the cafe, wine bar and sushi bar?
“ I purchased all of the packages of it left on the shelf. Really great.”
I can only imagine the level of stink-eye when you made such a gauche move.
Did you ask the cashier if everything was cruelty free, ensure that the trees wern’t harmed while being shook and ask to see photos of the workers and who they voted for?
Because in addition to the huffing, that would be a true TJ experience
“This is what they got all wrong with AmazonGo. The sandwiches and other items they carried were crap compared to the Sweetgreen or Panda Express nearby.“
https://imgflip.com/i/5t4mxv
Sweet Jesus, it’s low grade dog food
“I can only imagine the level of stink-eye when you made such a gauche move.”
The nuts are like $3 something a package. I’m tempted to repackage them as my own brand and get WF to sell it for about $6.
“How was the conversation with the cashier?”
I will say that the cashier looked at me a little funny. Although in her defense, she was about college age, and she seemed to be having some charming banter with the late 20-something rock climber-looking guy in front of me. I imagine “dad-looking guy buying 10 packages of nuts” was a bit of a customer downgrade for her.
Our TJs is always super busy, but they seem to have more cash registers than would be typical for a store its size, and there’s a cashier working at each of them if there’s any sort of lines. Our conventional store and neighborhood WF could learn something in that regard.
“Sweet Jesus, it’s low grade dog food”
Feed a dog nothing but Panda Express, it will have a short life.
Sooper popular for some reason, tho.
The Go stores are (1) beta tests for the technology including at the Fresh stores, and (2) not meant to be more than an upgrade on the standard lobby market, but without Lotto.
There’s one in The Franklin (ATT/USG complex)–there’s also a Hannah’s Bretzel and a Sopraffina (among other things). If I had time, and wanted a sandwich or salad, would I go to one of those instead of Go? 14 times out of 10. But is Go 100x better than getting stuck behind someone checking 100 Daily 4 tickets to get a diet coke and a bag of nuts? yup.
“The Go stores are (1) beta tests for the technology including at the Fresh stores, and (2) not meant to be more than an upgrade on the standard lobby market, but without Lotto.”
“Thousands” of stores sure is a BIG beta test.
Give me a break.
AmazonGo was supposed to be this huge new retail chain. But they forgot that 7Eleven already exists and that speed isn’t what makes people decide what kind of food to buy for lunch.
FAILS all around.
But it’s okay, because Bezos has moved on and he was the driver behind the obsession with the technology, apparently.
“Sweet Jesus, it’s low grade dog food”
I know you’re retired and live in Indiana JohnnyU, where maybe they don’t have Sweetgreen or Panda Express, but Panda Express is one of the most successful restaurant chains in the United States over the last 15 years. It doesn’t matter if you have never been to one, or don’t eat it. In Ogilvie, there were always lines for it at lunch time.
“Where’s the TJs with these things? I’d like to visit!”
Not TJs, as you know. Although they do give out holiday samples of their new products and that’s always fun.
They rotate their people throughout the store. No specialization.
Mariano’s, Whole Foods, Dom’s Kitchen and FoxTrot are ALL experiences and are performing well.
“You’ve started going again? Which ones have you been in?”
Started?
I’ve never stopped going to the supermarket. I’ve been going the entire pandemic. And yep, even during the height of the pandemic, more people were in line for the cashier than self-check out.
Of course, no one wanted to touch the screen on the self checkouts for the first 6 months of the pandemic so that might have had something to do with it.
“They will not have dedicated cashiers. The “cashier” will wear multiple hats within the store.”
This is incorrect in Whole Foods. I have direct knowledge of someone who worked in the meat department, and only the meat department, for 3 years.
“(i) stop comparing Amazon Go to Amazon Fresh. No one does their weekly grocery shopping at BP or 7/11.”
You’re right WP. It’s so dumb because AmazonGo didn’t care about the merchandise. But will Amazon Fresh? I haven’t been in one yet but it’s going to be hard to compete against Mariano’s, TJ’s and Whole Foods out there in Westmont. Or anywhere for that matter. Have to have something real special. But what?
Amazon Fresh has absolutely NO brand identity. What’s the merchandise that would make me want to go there over the Jewel down the street that I’ve been loyal to for the last 10 years? Prices? Product?
Amazon doesn’t care. It never has.
That’s why it fails as a brick and mortar retailer.
“$1.7Tn market cap…. but Sabrina knows best….”
Lol.
As if simply being a large company means anything. Ask IBM how that has worked out for them over the years. Or GE.
And, once again, the men on this board don’t seem to understand retail, branding or what it takes to “make it” in brick and mortar. The Panda Express had been closed in Ogilvie until just recently. Closed over 16 months. It will only reopen once that lunch crowd is back, so it must be back.
AmazonGo was supposed to serve the exact same customer. The fact that it hasn’t reopened really says it all. I’m sure it will NEVER reopen. I don’t know what happened to the others in the loop. I’m assuming AmazonGo is over nationwide now.
A gimmick simply isn’t good enough. Once you walk out with your groceries once or twice it doesn’t really matter. The merchandise is what matters. If it is good, and can compete, then people will come back.
But given what they did with AmazonGo, and also how they treat Whole Foods, I’m assuming Amazon Fresh will last about 3 years, tops.
“Sweetgreen is like $15 and Panda is unhealthy and crap. Also, Amazon-Go is targeting people that don’t have time to wait in line at Sweetgreen and Panda.”
Correct. But they assumed the food didn’t matter.
It DOES! And it DID!
The food is the most important thing. The actual product. On my lunch hour, I want something good. I don’t want some lame sandwich. There are a TON of great options now. AmazonGo wasn’t even in the same game. Again, a gimmick where you walk out quickly is just that, a gimmick. It gets old quick.
Some of the AmazonGos in Chicago closed before the pandemic even hit.
They simply got it all wrong.
“ I know you’re retired and live in Indiana JohnnyU, where maybe they don’t have Sweetgreen or Panda Express, but Panda Express is one of the most successful restaurant chains in the United States over the last 15 years. It doesn’t matter if you have never been to one, or don’t eat it. In Ogilvie, there were always lines for it at lunch time.”
Which you know still doesn’t change the fact it’s low grade dog food.
Maybe the flavors are enhanced after downing a couple of boxes of wine?
“it’s going to be hard to compete against … Whole Foods”
“That’s why [Amazon] fails as a brick and mortar retailer.”
Huh??
“The food is the most important thing. The actual product. On my lunch hour, I want something good. I don’t want some lame sandwich. There are a TON of great options now. AmazonGo wasn’t even in the same game. Again, a gimmick where you walk out quickly is just that, a gimmick. It gets old quick.”
LOL at the person that like Panda express and wants something good
“This is the last you will hear about it because they will drop it within a year and then not admit that it failed to catch on.”
Interesting that Walmart is rolling it out with their Walmart+
These 2 retail giants must not know what Sabrina knows
“LOL at the person that like Panda express and wants something good”
The lines at Ogilvie and the thousands of restaurants tells you otherwise.
Panda products are sold in supermarkets. And, actually, the wok items are pretty healthy.
If you just get the wok with the vegetables as your base, it’s likely better for you than most else you can get for lunch downtown.
“These 2 retail giants must not know what Sabrina knows”
I’m sure they can hire a handful fewer people if even 20% adopt it. Yawn.
Walmart is also using autonomous trucks to go from the warehouse to the store, apparently. Don’t need a driver for those short hauls (it’s only 7 miles.)
But none of this is going to make me go to that store. It will help them with their margins (maybe) as developing the technology doesn’t come for free.
Brick and mortar is about the experience. That’s where Amazon, and actually Walmart, both fail.
“Huh??”
The Amazon Fresh is competing against their own stores: the Whole Foods. Duh.
They tried those 365 stores a few years ago. Had 5 of those. They failed but I don’t blame Amazon as those launched before Amazon bought them. But they just reconfigured it into Amazon Fresh. So now I WILL blame them.
Amazon has never succeeded as a brick and mortar retailer. Why does anyone think it will be different this time?
“The lines at Ogilvie and the thousands of restaurants tells you otherwise.”
There are lines at Subway and 10’s of thousands of restaurants as well, what does that tell you?
“If you just get the wok with the vegetables as your base, it’s likely better for you than most else you can get for lunch downtown.”
Not a very high bar
Or you know you can bring lunch or is that too prole?
“But none of this is going to make me go to that store. It will help them with their margins (maybe) as developing the technology doesn’t come for free.”
Reducing labor is cost additive?
“Brick and mortar is about the experience. That’s where Amazon, and actually Walmart, both fail.”
You go to Panda Express, Jewel and Eataly LOL.
I do agree that Walmart is a complete and utter fail as an experience (Outside of the ones near the HQ).