Online Groceries seems the dumbest idea ever, imho
Transporting groceries from huge "fulfillment centers" raises all kinds of issues:
1. The quality of the produce. Unlike assembled products, quality varies from item to item. When you shop for lettuce, avocados, etc., some are bad and some are good. Will some 20 something working in a huge facility care about quality?
2. Transportation cost-seems expensive, and will either add to cost to consumer, or reduce profit for Amazon.
3. Other attempts at online delivery of groceries by other big companies have commonly been flops. Will Amazon be different?
Can someone explain why online groceries is a good idea?
Groceries = desperation for growth
The limits of ecommerce are here. You can see other top online retailers not growing. Apple and Staples are flat or down. Walmart has opportunity to bite into the online pie, but Amazon is now fully plateaued. Amazon's growth in Europe is already flat, and now it's going to be flat in North America too.
I estimate AMZN at $22B revenue Q4 and only a $1B increase from last year. They'll be luck to get that with a very tough season. Walmart will have decent growth because they are coming up from a lower number.
Amazon's growth estimates and profit estimates and analyst price targets are severely skewed from reality. Having estimates of keeping up 22% growth every year for 5 more years is so rediculous I can't believe anyone actually put that down in writing.
You forget the extra $700M they get in growth in the e-books business without increasing anything, just a new counting method due to a change in the business. Yhat's an automatic increase of 3%+ without increasing a thing and then counting it as growth.