 Alright, welcome back everyone, hopefully you got a chance to talk to your other classmates and introduce yourself. And so please take this time now to enter in in the chat what you think the two or three impacts will be to the grocery market, the industry, to Whole Foods, to Amazon, to its competitors. And so keep it short, think like tweeting, don't write a big essay, but something short and then we'll talk about those. But in the meanwhile, Sergio wanted to give a quick update on the course. Yes. So I just wanted to clarify a couple of questions that we have received from the student group. So guys, just remember that this is an instructor based course, so this means that every single week we will release a new material, so even though the course has launched last week, so this Wednesday, July 21st, we're releasing the first week. Every single week will consist of two lessons, we'll have also the practice programs, we'll have the assignments, and as Chris mentioned, we'll have additional material for very high students. So every single week we'll have a new set of material. So now it's time to start discussing the case. So what do you think? Sergio, I'm going to put you on the spot, what do you think the impact is going to be? Amazon has a giant, $136 billion bought, a $15, $16 billion grocery store. So I think that with my correction, I screwed up, they don't have 99 stores, they have about 460 give or take, so they're a little bigger footprint than what I said. So I think that it will be a moderating impact on big players, like as a small market, but I think some of the small grocery firms will be most affected by these acquisitions, I think most of them, or some of them will get out of the business. I also see some impact on the Whole Foods employees, because we see that for example this new pilot, Amazon Go, that Amazon is implemented with piloting in Seattle, so when they don't have any checkouts employee, right? Have you been to it? No, not really. I've never met anyone who's been to it yet. So if you're on the call and you've been to Amazon Go, chat and let us know where it's like. It's the one where, it's like that old, it was an IBM commercial where a guy's in the store, he's putting stuff into his coat, and then he walks outside the door and the guy, the cop comes out from his hands and says, you don't get a physical receipt. Okay. But there's a video, there's a video on YouTube about this store. I'm always very skeptical, because I think it's like a software working in PowerPoint, just because they have a YouTube video of it, doesn't really work. I'm really curious. So it's in Seattle, and so it's live now. It's a smaller store, it's like a 7-Eleven size. Exactly, that's correct. With a limited skew of brand? Yeah, I think so. Probably because it's a low-value one. Yeah, in this case, they combine the videos and also the sensors. Because there's no basket, right? In this case, you can just grab the product, and at the end, you will have to pay for that. You'll get the receipt on your phone. So if you go in there without a phone? No, you need a phone. You need a phone. Because in the phone, you'll have the app, the app. No, okay. Yeah, I'm curious. The phone's awesome because they're always doing wacky stuff. And so we'll see what works. But I've never met anyone who's done it. Has anyone, chatting in, has anyone on the call or on the event done it? Been there? No? No? You've been to it? Norway, so we have some of it. Oh, in Norway, they have it. Well, who works in Norway, it's kind of, if you make it in Norway. And did it work? Was it the same concept? Same concept. You don't need actually your phone. They have something that you can grab there. Really? But no one steals anything in Norway, right? So there's no theft. But it's an interesting thing. But I think your point though, Sergio, is that Amazon and Whole Foods have very different employee skills. I don't think. Have you ever shopped at a Whole Foods? I did. Do they have automatic cashiers? No, I don't. They don't. Nothing's on me. So their whole approach is friendly, they're knowledgeable, they're all hipsters, right? They know their organic stuff. And if you look, if you do some quick math, the revenue per employee at Whole Foods is about $180,000 per year. At Amazon, it's about $400,000. So you look at the value of what a person brings and you look at the automation that Amazon's known for. My guess, if you're $15 per hour employee at Whole Foods are looking for another job. They're going to automate that because they can't sustain a labor force that's generating that little revenue. So the question is, did they acquire them to get into traditional brick and mortar grocery store? And my guess is we both say no. The real acquisition, I view it as a real estate acquisition because now what Amazon can do, they've been pushing more and more to have, you know, same, next day delivery was an innovation eight years ago. And now it's the same day, and now it's within two hours. And so as they're getting closer and closer and closer to them, though, you've got to be closer and closer to your customer. You can't make up the distance, right? You do a lot of work in last mile delivery, but you've got to be close. And so what they bought essentially is this footprint close to their types of partners or their types of customers rather in the high end urban environments that are dense. They're not out in the rural areas of Tennessee. And if you're in a dense area, if you've taken, if you took SC0X, you know what happens with the density. Remember approximation squared of NA? So as you have a denser area, then your cost for delivering goes way down. There's a reason why you have home delivery in urban areas. And this is a footprint that's going right to that. So my sense is this is an acquisition for real estate. And they can use this as a jump point for last mile for grocery. Sure, that makes sense. But also for other goods, they use them as distribution centers for getting a closer footprint to the customers. The other impact, one that might happen is Whole Foods tends to have very small suppliers. If you go in there, they have some big brand names, right? You'll see a General Mills, but not that much. Yeah, you generally have a little niche. And so the thing is, is Amazon going to stay with those niche suppliers that could totally transform Whole Foods in the grocery market. But what are some of the comments coming in? Anything from the groups? Okay, so we have some from the students. So Ilya Rokun from one of the record rooms, so they say that Amazon, the first impact to Amazon to develop these expertise and to grow up then these niche on a global scale. So that's the first impact. The second one is Whole Foods will capitalize on the supply network Amazon has. And the third one is obtaining a bigger market share as many people with along the tops like Jewel Osco and Costco. Where's Jewel Osco? I don't know that one. I haven't heard of that one. Is that US based? Do you know it? West. Is it West? Central and West. I agree with some of it. I know the thing is the people who go to Costco are not necessarily the same people who go to Whole Foods. It depends. Maybe they go and it's a different size of their market basket, but they tend to go to a Costco for you guys outside the US. What would be the equivalence in Europe? Would it be a nut of Tesco? It's the big wholesale grocery store, Sam's, a warehouse club where you go and buy essentially a pallet worth of stuff, big box stuff. Whole Foods, that niche is where you buy, you know, your turnip from Brazil and your pears from Chile and all that. They're very niche organic. So I don't know what the overlap is there for that. It might pull people from some competitors like Crater Jail, but I don't know. I don't know. Okay. So how about I comment from Frane Lu? In this case, the first impact, they think that will be a leveraged, the logistics infrastructure and gain more market share. You think Whole Foods will gain more market share? Whole Foods and Amazon together. So did anyone, did I mention what the market share was? Did I mention it on the start? I did. So it's 2%. So Whole Foods and Amazon combined. It's 1.2%. So they've got a ways to go. They've got increased by 10X for that to go. So it'll be interesting to see how far they can grow that, and if that's what they really want to go for. Okay. The second impact, roughly shopping with the Alexi and EcoDevice. That's great. So I want you to know the devices they have there in your home, and they swear they're not listening to you all the time. Essentially, you can talk to it's voice activated, it does a bunch of different tasks. It's similar to what Google Home, Apple Siri, and they've introduced one now, but the market leader and creator of this market is really Amazon. And I know you can actually order things now, to have delivered. And it's really, do you have an Echo? No, I don't have it. But you have one, right? I have one. And so we order our dog food from it, because I live in an urban area and I don't want to carry 30 pounds of dog food in. So I just say, Alexa, order dog food, and it asks for my code, which I won't tell you. And then it says that it's there in three days. It's awesome. The question is, will that happen for grocery? I was reading something recently about the big mobility problem that people have, especially in urban areas, who are left, they kind of solve individual things, except if you're going grocery shopping. Grocery shopping eats so much of your time and you're carrying 10, 20, 30 pounds of stuff with you, it's a little harder. So in urban areas, this niche of last delivery of grocery could make a lot of sense. And if you make to something where you can just order from the home, that could be a big one. I bet they will tie that. I could see that happening very quickly on Echo, and that will drive something else out. There's a company called Instacart, and their niche is that they will deliver food from Whole Foods to you. Have you ever used Instacart, Tim? So you can say, I want, what would you buy at Whole Foods, like some artisanal pickles or something, something obscure. So you have this delivered, and they will deliver it in an hour or two, it's very quick, and it's like $5.00. So essentially, they're already on the rocks to get market share. I can see them just from the place there, maybe having them just reply to the Echo. Okay. So that's what you were talking about with the go. You know, that sounds really cool, and we'll see if it actually happens. I think it's a couple of little ways away. So a couple of others from Thomas mentioned the Amazon takeover of Whole Foods may force out the smaller local and regional grocery chains. That's what you said. Yeah. Okay. There's still a pretty small, I don't know, I grew up when A&P was dominant. Does anyone remember? Do you remember A&P? No. Yeah. Does anyone remember A&P? No. Oh, come on. You don't remember? Atlantic Pacific A&P? They were the dominant. Actually, the store that invented the grocery store, does anyone know? They're still around, but you probably never know. I remember. I remember. Pigley Wigley was the first grocery store. But then A&P was the first one who made their own in-store, not in-store, but private label brands. A&P was massive, and they went under. So who knows what's going to happen here, but a lot of those regional guys are out in the boonies. They're out in the rural areas, but also I guess there's a lot in the urban areas too. Cool. The stands. That could be interesting. We could see. Okay. So Thomas is mentioning that Amazon will use the whole goods as both a warehouse for local deliveries and as a pickup point for those who want to do that. Yeah. So it'll be really interesting. In week, when do I talk about warehouse? Week 8? Week 8. So we've all been to stores, and when I was growing up, the back room was massive in the store. And over the last 15, 20, 30 years, it's gotten smaller and smaller and smaller because retailers realize they won't have stuff on the shelves, and they kept less than the back. And so if you talk to any grocery retailer, the back room, if you've ever been in the back, try to go to the back room of a grocery store next time you're in a grocery store. It's a mess, and it's really small. And so the question is, can that turn into a DC? And so you talk about Omni Channel and all this where the stores also become the forward deployment point or fulfillment center, it's a challenge. It's not a trivial thing. I know Walmart struggled with this. A lot of grocery stores have struggled with this. They're better suited for pickup at the store rather than delivery from. So it'll be interesting. It might change things the way there's laid out because if you've been to Whole Foods, it's very airy and there's a lot of open space. So I don't know. The back room will be. But I agree that they're going to try to use some of those fulfillment centers and also read, in addition to their stores, they also have their own inbound supply chain. And so they have larger DCs that are refrigerated. And so that's something that I see Amazon taking advantage of right away, because they can run a DC better than anyone. Having this network of refrigerated or temperature controlled DCs across the country, they could do their fresh prime daily delivery from there. That's pretty attractive. Again, it's a real estate play more than a band of Whole Foods, because Whole Foods generally means a higher price, higher margin. It doesn't necessarily mean value. Okay. Thank you, Chris. So another one is Amazon becomes Uber of the grocery delivery space. So that's one thing back. What? You see? I guess so. What does that mean? It means Uber of the, you guys, you guys cracked me up. So I get a pro set, all the, I've got the idea, this is the Uber for whatever. And so what does that mean? That means crowdsourcing or separate non-employees are providing the service. So I don't know if that's going to happen. I know different stores have played with using Uber, for example, Walmart for their home delivery pilots out of Denver, am I doing this right? They use Uber, yeah, out of Denver. And so they've tried using Uber for that for the delivery, and it actually, the pilot, as far as I've heard, it's going very well. And they're using it more for package and small deliveries. But when you say the Uber of, that usually means something. So that means that you're using assets that you don't own, and you have some centralized coordinating activity. I don't see that here personally. But anyway. Okay, sorry, I wasn't really in design. We need more location for YouTube cashless store. Yeah, sure, that's what they go. Yeah, so the question is, are they going to keep all the stores open? And are they going to change the mix? Will they, for grocery? I don't know what the, have you guys ordered anything groceries off Amazon? Fresh, yeah, so it'll be interesting if they flesh out their line or do they start changing the selection? I don't know. Like I said, it's a small market share. Okay, so we have another comment. So Instacart now would have bigger opportunities in lunch, lunching at City's Nation 1, and not just the Whole Foods location. Amazon is like a big shark exploring a lagoon like Whole Foods. Exploring a lagoon is awesome. They're a big shark. Amazon has been called a big shark before, but different reasons. The Instacart are like small fishes in a lagoon. Now they have bigger opportunities to explore and grow because of these activations. So are the Whole Foods like a remora, right? Aren't those the cleaning fish that stay on top of the shark? That'll be interesting, I don't know. So Instacart again, does deliveries, and I think they go from other stores, not just Whole Foods. But the question is, does Amazon need that, or are they going to incorporate that? I don't know, for the last mile, I believe Amazon Fresh is using its own vehicles, aren't they? Yeah, they would use their own fleet, so maybe they'll replace that. Them being located in very urban dense areas will certainly help Amazon do last mile. But anyway, I think we're almost out of time, but what's interesting is all the concepts you'll learn in this course will help you think more about this, especially some of the transportation decisions. Because the most expensive leg of transportation is the last mile. Always, the last mile, first mile. And so what they're doing here is they're getting a step in to closer last mile delivery. So it'll be interesting to see how it plays out. And we'll see if they truly become the uber of grocery. We'll see how that goes. Okay, thank you, thank you for being here. Thank you so much for being here. And thank you guys and see you next time. All right, bye.