Amazon isn't dumb enough to not know this.

I don't think so. I really don't think so. I think they're that dumb. There's this monolithic idea of Amazon the innovator and it's abject bullshit. Amazon is Crazy Eddie with VC funding.

What has Amazon's principle contribution to the world been? Lower prices via the internet. Yet their search engine sucks. Their product discovery sucks. How do they get more efficient? bullying Fedex, then when that doesn't work, bullying OnTrac, then when that doesn't work, come up with their own shitty transportation system that pays freelancers $9 an hour to drive around sucking. Cloud services? That's a bunch of computers in racks. Prime? That's a Costco membership for a warehouse you can't visit.

Go visit www.relentless.com. Bezos himself registered that back in the early days. THAT is their business model - beat everyone else. It was actually Circuit City's mission statement: put Silo out of business. Soon as Silo was gone, so was Circuit City.

Amazon is the Third Fucking Reich of retail - blitzkrieg, exterminate, occupy. It's great until you actually have to hold and administrate. As a stable business model it's sorely lacking - Amazon Prime Video is a loss leader while HBO Go and Netflix actually make money. There will come a time when Amazon can't innovate their way into monopoly positions anymore and they will stagnate and wither.

If Amazon can successfully use their supply chain magic to reduce inventories while maintaining adequate SKUs, then they should be able to keep wages decent, keep customers satisfied, and reduce prices.

Amazon can't send me the correct fucking nightlight without five tries. Why? Half their shit is "marketplace" and they don't police that shit. Amazon can't get me a laptop charger in four tries. Why? Half their shit is "marketplace" and they don't police that shit. Amazon can't keep former vendors from phishing me about returns eight months dead. Why? Half their shit is "marketplace" and they don't police that shit. They have no secret sauce: they have employee brutality and long hours. it's like Korea - it was going to take over the Pacific Rim with its productivity until they had worker riots, a Hyundai factory burned and worker protections entered law. Amazon is one Upton Sinclair away from peril.

if anyone can figure out predictive grocery shopping behavior it is them and their unfathomable computing power.

I don't think it's predictive, and I don't think it matters. In grocery you stock the shit that sells. This is why I can buy capers at the neighborhood barrio but the giant Armenian/Mexican market doesn't have Planter's Peanuts (they do have bulk peanuts for 99 cents a pound). Amazon Fresh has SBC whole bean coffee for $5.99 for 12 ounces. I can buy Armenian half'n'half for $3.98 a pound. For that matter, I can go to my local grocery store and get locally-roasted organic for $5.98/lb. Locally-roasted organic at the Whole Foods down the street? $12.98/lb. Why? Because it's fuckin' Whole Foods.

there is no secret sauce. Amazon doesn't have it, Whole Foods doesn't have it. What Whole Foods has is a contracting grocery chain whose business model is contracting and which they paid a 50% premium for.