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Munster Says Amazon Is 'Building The Future Of Retail By Rebuilding The Past'

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Munster Says Amazon Is 'Building The Future Of Retail By Rebuilding The Past'

With its impending purchase of Whole Foods Market, Inc. (NASDAQ: WFM), Amazon.com, Inc. (NASDAQ: AMZN) is poised to seize, from the start, a $15 billion share of a $500 billion grocery market.

And, of course, it’ll be better positioned for total retail domination.

Since its rise, the company has been labeled a retail killer primarily for its e-commerce segment.

However, its recent strategy — pervasion of the very brick-and-mortar space its online sales disrupted — betrays the true magnitude of the threat and the acumen of CEO Jeff Bezos.

The Future Of Retail

In May, Loup Ventures wrote that the future of retail lies in three distinct categories: online sales, automated brick-and-mortar and empathetic brick-and-mortar.

“The degree to which Amazon succeeds in each of these three categories is the degree to which they will be the dominant operating system of retail in the future, and they are well on their way,” Gene Munster, managing director of Loup Ventures, wrote in a Friday note. “And Amazon sees the synergies between these categories.”

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The company already rules online retail and has begun experimenting with its automated warehouse concept, Amazon Go. Now, with Whole Foods, it’s suited to penetrate the empathetic retail scene.

“Whole Foods is arguably one of the best grocery experiences built for scale, leveraging three uniquely human capabilities: creativity, community, and experience,” Munster wrote.

He foresees Amazon transforming the Whole Foods model with one-hour delivery services through Amazon Flex, as well as the integration of Amazon Go models in the grocer’s 456 nationwide locations. The former is expected to roll out in a year or so, while the latter may not take effect universally until 2021.

“Whole Foods’ physical assets (real estate, warehousing and distribution capabilities, etc.) will accelerate a retail flywheel for Amazon to expand their brand as the everything store, available everywhere consumers think to shop,” Munster said.

At time of publication, shares of Amazon were up 3.16 percent at $994.63.

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Latest Ratings for AMZN

DateFirmActionFromTo
Mar 2019KeyBancUpgradesSector WeightOverweight
Feb 2019Pivotal ResearchInitiates Coverage OnBuy
Feb 2019Raymond JamesMaintainsOutperformOutperform

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Posted-In: Gene Munster Jeff Bezos Loup VenturesAnalyst Color News M&A Analyst Ratings Movers Best of Benzinga

 

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PFSWCraig-HallumDowngrades0.0
EAMorgan StanleyMaintains88.0
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SPLKMorgan StanleyMaintains140.0
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