Not so Amazon-ing Groceries

So Amazon wants to play in the grocery market.

Amazon has successfully revolutionized many industries. We now take the retail sectors that Amazon has changed to be the new norms. So perhaps we should thank them and move on. While moving on one should be sure to observe the endeavors of Amazon as an investment portfolio. Some of the moves Amazon makes will be winner, large winners, while other will be horrific losers. You get where I am going.

Now that we are all on the same page, AmazonFresh screams AmazonMess.

Don’t get me wrong, the grocery business is a large industry. As the entrepreneurs say the sector is ripe for disruption. Though if you take a look around you will see that often times disruption is better left as an idea. The main items in a grocery store have a margin of somewhere around 1 percent. Yes Whole Food does well and deserving so, its Whole Foods. For those of you who do not understand basic business: Whole Foods operates in a niche (organic) and can charge a premium for their products.

By far the strongest argument against this move is the scale is just nonexistent. By focusing on a few items like Amazon has done in Seattle they just do not have the scale. If you can only deliver my egg rolls but not my General Tso’s chicken, I am not ordering. For any real scale to occur Amazon will have to offer everything and with everything comes horrible margins that barely support the fleet of vehicles to deliver their goods.

Many people have made the argument that the populous will fail to move away from the brick and mortar due to the sensations of shopping. The American obsession of touching what you buy is no more prevalent than in the grocery industry. Mom wants to pick the fruit she puts in her children’s mouth. Just like the kiddies want to go to the store to pick out goodies for the week. In the fast paced 21st century that Amazon has built its empire on last minute decision making(one-click shopping), not planning out the weeks grocery list to be delivered by a courier.

By simply stating that Amazon will outperform competitors because they always have many have rationalized the tech giants movement into the space.

Amazon has been known the yield an iron fist in the realm of eCommerce. They are now going up against the big and the baddest at their own game. They are literally going after the bread and butter of Walmart, Target, and the like. This billion dollar bet will be sure to be a tech tale for the books. Last time Amazon tried to step outside their realm and challenge a big player, Apple, they had good reason. They were promoting their entire brand and position in the cloud space. Their move was merely a means to an end. This was to promote the amazon music, movies, and ensure everyone was registered for one-click shopping.

Harris Teeter here on the East Coast is already geared up and ready to giver them a run for their money. I have personal experience with this service and by far am not impressed, nor am I impressed by the cars lining up to pick up groceries at their many location. Essentially HT lets you pay a fee and pick up your groceries without leaving your car. For those who are into channel checks, the number of motor vehicles in line is always zero. Harris Teeter has essentially used this as a way to compete with Whole Foods who is stealing their market share quickly. By offering an additional premium service Harris Teeter can ensure they keep repeat customers.

Amazon has a great business model not based on groceries. They do not need to enter the grocery business to ensure the success of their eCommerce business. So in layman’s terms I am not seeing the risk reward of entering this super competitive market when their are other ventures ripe for disrupting.

Posted on June 5, 2013 by Young Gun in Uncategorized Leave a comment

Apple of My Eye

Everyone remembers hearing “with Apple goes the market.”

Well any savy investor knows that correlations change. The game changes, no matter what business you are in. The smart investor, the good businessman knows what the next play is. The game has officially changed and Apple will make new correlations. It will likely have an inverse relationship to the market (refer to fly’s post a la noche: How Does the $SPY Perform in June?)

In a few days Apple will be launching its rebooted line of Macs and an updated interface.

Will it set itself up to change the game?

My anticipation is that Tim Cook is done “cooking” himself over the roaring flame. It is time he wowed us. This moment is the make or break for Apple and contrary to my normal beliefs, they shall impress. Tim’s job is on the line so for his sake he must impress.

The market and the consumer have been disappointed time again with the recent line of Apple products. Read any tech blog about the most recent iPhone or the retina display. Yeah they were cool but they did not make you say whoaaaaa. We are entering that phase. We are going to be wowed again.

If not Apple’s heyday is done. Tech is exponential. Apple will continue to push the limits or they will be pushed aside.

There is no need to run out tomorrow and buy the stock. Let us see how the announcement goes. If we are in awe then we will likely continued to be amazed as we come to the iPhone and iPad updates. If WWDC goes as planned by Mr. Cook and his staff, we will be impressed. If we are impressed the stock will continue to climb into the summer as we near the next update cycle.

You want verification? You want a footing to stand on? Look at Apple historically:

When Apple gets the hype momentum behind it, it runs. Apple will get its hype back or it will spend billions trying.

Posted on June 3, 2013 by Young Gun in Uncategorized Leave a comment

Vine That

The weekends are full of thoughts and ideas.

For example: whats next, whats big, and where should I put my money.

A while ago I mentioned this new and exciting thing called Vine. I went on to stress that this would flop, because the challenges of recording and making videos would overwhelm the user.

I completely underestimated the potential.

Vine has been the new thing. Who would have thought that those guys at Twitter could create a hot product again? Does this mean that Facebook is no longer hot? Does this mean that Google+ is barely in existence?

Facebook remains a constant. It is that court house in your local community, it has been and it will remain. They are the umbrella which all the new and hot social media companies will be kept dry under. People are still fearful of an exodus from Facebook — it won’t happen. It has become a staple of the technology life. Though they no longer have those crisp and refreshing attributes that make it the “thing” the kiddies discuss at recess, replacing it remains impossible. Facebook remains the icon of social interaction on the internet. Which means profiting from it remains the only logical solution.

Death is near the opponents suggest. They are wrong like those that suggests the sun will not keep shining. Think about Facebook as an investment for the user. Not an investment as putting your money here or there to garner a return, rather as building a business. You invest time and money to build a business; you build products, acquire customers, update your product and then acquire more customers. The time you invest in your business is similar to the time invested into your online profile, ask the bloggers, keeping up that persona year after year is a full time job, a rather large investment. Those that build businesses, personas, or any analogous example you brilliant mind can think of are unlikely to vanish due to the work required to bring about its existence. Facebook shall remain.

Snapchat is hot, vine is hotter. This will change in a few months. Remember when everyone was on Farmville and you had to have that cow? What about when grandma was on Words With Friends? Yes the hot items will come and go, more importantly the constants will remain constant. Apple will continue to be the BMW of cell phones and Facebook will continue to be the platform that everyone builds upon. To solidify that statement just ask any developer if signing in with Facebook is a required aspect in their app or webpage, they will answer with an unequivocal yes. Ask anyone who likes technology if they aren’t looking forward to the WWDC to see what Apple has up its sleeve.

I can admit I was wrong about Vine. More importantly we can all take this as a learning experience, whats hot can be a nice ride for a while. You can make some pennies to feed the meter. The better investment for long term rewards is the titan of the industry, the one that will leave a lasting impression long after everything else has come and gone. The giant of industry will put a Bentley in front of that meter.

Posted on June 2, 2013 by Young Gun in Uncategorized Leave a comment

Time To Get Serious About Gambling

This morning as one of many Google Adsense publishers I received a email suggesting the future of online gambling has revolutionized. The image below is what that email contained.

The above snippet suggests that there are many more winners to the gambling game than many initially thought. Without a doubt gambling has been and will continue to be a multi-billion dollar industry. After the newsletter from Google this morning, this shows that not only a few small companies are jumping on board the gambling train, but even some of the bigger tech giants are interested in boosting revenues through the gambling market.

With AdSense already an established business model for Google, expanding it to categories once thought questionable is a great move. In the countries where online gambling is completely legal, Google does not have any moral dilemmas about making money off of the current (and legal) online gambling infrastructure. Six months ago I wrote a piece about Facebook and its potential as a online gambling super star. Though in regards to Facebook the overwhelming issue remains that it may be against the values of the online giant and values its reputation more than revenues. Though as we see with all these large tech companies, if one enters the market others are sure to follow.

In regards to those small gaming companies that have been the talk of the news lately due to gambling, specifically Glu Mobile and Zynga, their stories have just been validated by the above email from Google. When a big player like Google gets serious about online gambling, even going as far to completely revamp their policy on the matter, it lends a large amount of validity to other companies in the space (or in this case companies looking to enter the space). Glu Mobile and Zynga have many other issues and challenges above and beyond online gambling, so let us see how they “play their hand” and perhaps they can make big inroads in this market.

Without a doubt Google has validated the potential of those in the online gambling arena or attempting to enter. Not only that, perhaps Google can boost revenues with future gambling partnerships. The hype around Glu Mobile and Zynga may have not been the joke we all initially thought.

Posted on March 21, 2013 by Young Gun in Uncategorized Leave a comment

Marissa Meyer Signals a Bigger Issue at Yahoo!

Since I was too busy working from home, I was unable to comment on the recent shenanigans at Yahoo. Whatever Marissa Meyers is smoking, I want some, perhaps a few crates. Where does one get the idea that forcing people to get out of their creative home environment into a hellish brick and mortar they call Yahoo’s office will fix any of hoo’s problems?

Yahoo wants to be a global technology company; they even wrote it (a big step for a company that can barely develop anything). Now I do not know how much research they did on their competition, obviously none. That space is not only crowded but cut throat. The gimmicks and schemes Yahoo has used in years past will not suffice.

To understand where Marissa Meyer is coming from you have to understand the environment. Marissa has workers producing about $350,000 in revenue. Compare this to their new choose of competition (since they are moving to be a technology company), Google, with almost $1,000,000 per worker in revenue.

What is my dear Marissa trying to accomplish here? Well obviously she thinks that her workers lack productivity. She also believes that drawing all the employees under one roof will boast creativity. Ever heard of Google Campus? Neither of these are bad ideas. The issues stem from what this move implies about the overall culture at Yahoo.

Yahoo can try all they want to emulate Google, they will fail miserably at it. Companies, particularly in the tech space have to make their own lane. In other words, they have to be individuals. Technology moves so fast that copying a competitors approach, products, atmosphere correlates to being years behind.

More importantly, Yahoo employees lack productivity and creativity. That is essentially what Marissa is telling us. She is suggesting that her employees do not make her enough money and need to be under a watchful eye. This says everything you ever wanted to know about Yahoo. These facts blatantly state that the wrong people work at Yahoo. When the wrong people work for you, fissures in the company run deep.

Have you ever heard of employees of Yahoos newfound rival Google needing a slap on the wrist for not being productive or creative enough? No you have not. Have you ever watched a fight between a trained combatant with the latest technological weaponry and an elderly woman? It is quite entertaining, so grab the popcorn and join me for this entertaining programming.

Essentially Yahoo and Marissa Meyer have put a band aid on a wound that needs immediate medical attention. By attempting to solve the problem without having a deep understanding of the actual issues at hand Marissa has just prolonged the unavoidable, Yahoos death (or Marissa’s termination).

Posted on March 2, 2013 by Young Gun in Uncategorized 2 Comments

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