It's in no way clear that Amazon wins on selection. In 25K SKUs, Amazon will have electronics, but almost certainly hace fewer SKUs than a dedicated electronics store. They will have groceries, but not as many as a grocery store. They will have clothing and housewares, but surely only a small sampling relative to Macy's.
I shop at Amazon Fresh in Seattle sometimes, and the selection is significantly trimmed relative to pretty much any local grocery store I can walk into. The tradeoff is the convenience of not having to go to the store and spend my time traversing the aisles.
They are starting with 25k SKUs. They have the potential to have infinite SKUs in this program, while brick and mortar stores are limited to shelf space.
That being said, it might make sense to keep the selection artificially small for multiple reasons.
Depending on how much volume you have, inventory turns are an important gate on how many items you can afford to carry. And I would imagine that there are practical limits on how many SKUs you can pull stock from and still deliver in an hour.
I shop at Amazon Fresh in Seattle sometimes, and the selection is significantly trimmed relative to pretty much any local grocery store I can walk into. The tradeoff is the convenience of not having to go to the store and spend my time traversing the aisles.