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Comment by ericmay | Hacker News Reader

Do you extend this to store brands?

Should Kroger be able to offer Kroger Private Selection alongside other brands?

-edit-

Here's another one. Should Amazon be forced to let Kroger sell Kroger Private Selection in their Whole Foods stores (and vice-versa)? Why or why not?

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The difference is that when you go to Kroger you search the shelves with your own eyeballs. When you go to Amazon, their opaque algorithm does the searching for you, and it could be (and probably is) prioritizing Amazon brands or "Amazon's choice" over other brands. I suppose an argument could be made about the layout of store shelves serving a similar purpose to the prioritization inherent in search engine algorithms, but I don't think it's a perfect parallel since the shopper arguably has more agency in determining what products they see and when in a meatspace store versus online.

>The difference is that when you go to Kroger you search the shelves with your own eyeballs. [...] I suppose an argument could be made about the layout of store shelves serving a similar purpose to the prioritization [...] the shopper arguably has more agency in determining what products they see and when in a meatspace store

For example of Kroger or any other retail store, the shopper doesn't have full visibility of buying options because the curation also happens before any product gets stocked on the shelf. E.g. the hidden retail-corporate-buyer-and-vendor relationships. Kroger example[1]. Costco example[2].

Because shoppers are not sitting in grocery chain's corporate headquarters to see what products the company rejects/prioritizes, they will still be influenced by self-interest of the retailer. Those are private negotiations of vendor contracts that influences what shows up on shelves so they can be as opaque as Amazon's recommendations algorithms. If Kroger wants to remove Kraft Macaroni & Cheese from the shelves and just promote their own-store-brand Kroger Macaroni & Cheese[3], the shopper doesn't really have any more agency.

[1] https://www.thekrogerco.com/vendors-suppliers/become-a-suppl...

[2] https://www.costco.com/vendor-inquiries.html

[3] https://www.kroger.com/p/kroger-original-macaroni-cheese/000...

Those are excellent points that I had not considered (or even been aware of). Still, though, while the set of brands and products available at a brick-and-mortar store is predetermined in a way that the customer has little to no influence over, it's at least much more visible if I go into Kroger one week and there's a full selection of different brands of mac & cheese, and then come back the next week and it's all Kroger brand with no sign of any other brand; whereas if I go to Amazon and search for, say, AA batteries, or Lightning cables, and all I see is AmazonBasics batteries and AmazonBasics Lightning cables, is that because Amazon stopped stocking Energizer batteries and Anker cables entirely, or because Amazon forced them to a later page of results to bolster sales of the AmazonBasics brand?

That's a really good question. There aren't many ways to distinguish the two cases except maybe this: on Amazon's platform, Amazon takes zero risk in hosting other sellers. They don't buy inventory that they don't know will sell, and they don't pay to market products to customers, and they don't even need to hold the inventory at their own expense. They can just sit back, collect data, and enter high-reward markets while letting sellers do all the hard work of finding them. It's not quite so easy for a supermarket to do the same.

Maybe stores shouldn't be allowed to do this either?

I suppose if Amazon can't, then it would make sense that competitors like Target, Walmart and Kroger shouldn't be able to either.

Sure. My goal here was to just call it out and ask the question for others to consider. I don't see a meaningful distinction between physical stores or online stores in this context.

No, because stores like Kroger aren't building a marketplace platform, they are building a single thing to sell their products -- this is evident in the fact that there's aren't grocery monopolies. A single market is not a marketplace.

The distinction here is that Kroger doesn't allow 3rd party retailers to sell in its stores. Amazon allows 3rd party retailers to sell in its stores (it may or may not handle fulfillment for them). Totally different scenario.

I think OPs point is that online platforms are natural monopolies. Physical stores are not.

Ok. Why are they natural monopolies? What do you mean by natural monopoly?

I'm not OP, and probably doesn't share their opinions.

But you can make a "network effect" argument that for online platforms, the biggest will always be the best, and thus be impossible to compete with.

"Natural monopoly" is an established Economics concept: https://www.investopedia.com/terms/n/natural_monopoly.asp

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