00:00Ed, why the change in strategy?
00:02Yeah, closing and shuttering what was already a diminishing...
00:05footprint, right?
00:05There are only 14 Go stores.
00:07We have one of them or had one of them here in SF and...
00:1058 Amazon Fresh stores.
00:11And as you point out, that real estate gets converted to Whole Foods.
00:15This is not Amazon saying that they are done with grocery.
00:18Far from it.
00:18It was interesting when those headlines...
00:20hit, clearly there's an algo reaction, right?
00:22And Amazon paired some of its gain.
00:24It's now back up to a...
00:25But Walmart took a leg lower because the commitment from Amazon...
00:30is very much to grocery in the context of sub-same-day, right?
00:34They've been...
00:35focused very much on the online offering and doing those hourly deliveries and slots.
00:40Foot traffic's been falling away on these early locations.
00:43I don't know if you guys have ever been into an...
00:45Amazon Go, but it's the human-less facility where links your primary...
00:50account, you just kind of pick up the items and leave and it detects it and charges.
00:53But they found scaling...
00:55that tech very difficult.
00:56So that's the rebalancing of what was already a small footprint.
01:00Do away to those physical stores.
01:02Commit more to Whole Foods by opening new branches and then double...
01:05down on getting groceries delivered through online mechanisms as quickly as possible.
01:09Yeah.
01:10I had never been...
01:10I mean, there's only 14 stores.
01:12It's not unheard of that people...
01:15people have never been to one.
01:15I haven't.
01:16Although, Dani, oddly...
01:17Yeah, I went in London.
01:18...has been to one.
01:19I...
01:20I do that kind of shopping at ShopRite, but I guess Whole Foods is...
01:25just as well.
01:26Where are you seeing this...
01:27where are you seeing reaction across markets at...
01:30what are you hearing?
01:31Yeah.
01:31You know, again, I always like load up the tickets.
01:34When the news hits, Amazon...
01:35did something a bit squidgy, could be algo-related, but the Walmart move is kind of interesting.
01:40There's never been this, like, looking over the shoulder...
01:45from big box retail that Amazon is going to sort of dominate the physical store world.
01:50The opposite, like, Walmart wants to take a greater share of the online battle, you know...
01:55it has its own subscription offering.
01:56It is committed to rapid delivery, as is Target, as another...
02:00example, and, you know, bringing Walmart now down 1.2%, but in that moment that the...
02:05Amazon posts its blogs and we've sent the headline to the terminal, that was the biggest move that I saw.
02:10One thing on Amazon though, right?
02:11Like, the vast majority of operating income is AWS and...
02:15cloud computing, and this is the thing that's hard to understand with the many tentacle beast that is...
02:20Amazon.
02:21Isn't there a degree though, Ed Lowe, and we're about to get into the earnings season with all these Mag 7s...
02:25that all of these are just diversification for Amazon, it's not a company that's...
02:30dependent on one thing, and isn't that just such a benefit right now when we're all worried about...
02:35this beast of circular financing coming from the likes of NVIDIA and OpenAI.
02:40Well, AWS cloud computing is the majority of our operating income, but Amazon.com...
02:45and its many branches is still the great driver of revenue, and within Amazon...
02:50Amazon's earnings there are always surprises to the upside, advertising and the integration...
02:55of more advertising within the e-commerce part of the business...
03:00there's been a great boost for it, showing Target right now being down 4%, I think that...
03:05that was a name that was pretty much under pressure anyway before those headlines hit.
03:09But Amazon is also...
03:10sort of continuing to think about the whole suite of consumer in your face...
03:15stuff, video, healthcare, and basically bundling it up in an ecosystem...
03:20it's called Amazon Prime, just like Apple tries to have an ecosystem of devices and software...
03:25that's it.
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