It’s admittedly surprising, on a day when Amazon.com, Inc. (NASDAQ:AMZN), JPMorgan Chase & Co. (NYSE:JPM) and Berkshire Hathaway Inc. (NYSE:BRK.A, NYSE:BRK.A) shocked the world by announcing the formation of a new healthcare company, that any of these three organizations bothered mentioning something other than that big news. It’s not only game-changing, but raises a million questions.
On the one hand, in light of the fact that the “other” news confirms a worry I’ve voiced to current and would-be owners of AMZN stock for a while now, investors may be better served by focusing on the headline that’s largely been overlooked.
The headline? Amazon.com is sending a so-called “Treasure Truck” to select Whole Foods Market stores — sort of a pop-up shop on wheels.
The worry for AMZN stock holders?
Now that Amazon has a decidedly consumer-oriented retail presence, it doesn’t know what to do with it. While it’s worried about drawing people to Whole Foods stores, it’s ignoring the fact that too many of the shelves in those stores are empty.
Don’t read too much criticism into this commentary. Plenty of other companies would try nothing creative at all, yet expect different results.
On the other hand, even if you’re a die-hard fan and follower of Amazon.com, at least acknowledge there’s a fine line between being creatively whimsical and just looking a little desperate. The latest move from Amazon feels, to me, more like the latter.
Simply put, Amazon’s Treasure Trucks — packed with some of the recently hottest selling items at its website — will be parked in front of some Whole Foods Market stores today, doling out pre-ordered items and passing out Whole Foods coupons. The featured item is a six-quart programmable pressure cooker.
OK, there are worse ideas. There are better ideas too, however, that would create a business-driving buzz.
Perhaps more than anything though, the press release read more like an advertisement than a press release (because it was more of an advertisement than a press release). It was neither slick, smooth nor suave. It was blatant, and for lack of a better term, cheesy. Some of the lowlights include these desperate-sounding gems:
- “Treasure Truck handpicks new, trending, local, or delicious items, loads them on the truck, and cruises around town spreading joy for everyone with a smartphone and an appetite for fun.”
- “Today Amazon’s Treasure Truck will have an offer customers can’t refuse.”
- “Customers can stop by for some Treasure Truck fun, pick-up their Instant Pot order, coupon, and recipe cards and then head into Whole Foods Market to gather what you need to impress your game-watching guests or keep you on track with healthy eating goals until long after the last touchdown.”
Spreading joy, an offer customers can’t refuse, and impressing your game-watching guests? Really?
Remember when Amazon.com used to be the cool kid in school, willing and able to proverbially say “whatever” to pretty much anything? For that matter, remember when Whole Foods Market almost seemed to quietly thrive on the “Whole Paycheck” jab, enjoying the aura of exclusivity it says it wasn’t trying to create?
The Treasure Truck tactic is a move in the exact opposite direction, confirming my suspicion I first penned in November. That is, now that Amazon owns Whole Foods, so far it doesn’t appear to know how to leverage it.
In the meantime, too many Whole Foods Market shelves remain poorly stocked or outright empty, mostly because the company appears to be running its grocery stores with the same mindset — and software — it uses to manage the warehouses necessary to keep its e-commerce machine up and running.
Bottom Line for AMZN Stock
Amazon.com is going to be fine. AMZN stock isn’t doomed. Indeed, the stock’s rally may well coast higher for years just on its past laurels, even if its foray into more brick-and-mortar business ends up being nothing more than a costly experiment.
All the same, it would be naive for owners of AMZN stock (potential or otherwise) to ignore the idea that Amazon is taking on a lot of retail/consumer-facing projects like bookstores and grocery stores despite having no real core competencies or history in that arena.
Of all the ways to leverage the fact that Whole Foods and Amazon.com are now under one roof, parking package-filled trucks in front of grocery stores is one of the less impressive ones.
It kind makes you wonder what else the company may have misjudged.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter, at @jbrumley.