On Aug. 28, Amazon became the new owner of Whole Foods Market, and as quickly as the deal closed (just over two months), they’ve announced several initiatives that they began to execute immediately.
Just after the June announcement, I reflected in a blog here about how I thought the physical and digital worlds of each company would come together. My vision closely matches the plans Jeff Wilke, CEO of Amazon Worldwide Consumer, outlined, we’ll begin to see.
Here as I wrote, “like the click of the mouse” is what to expect:
- “Whole Foods Market will continue to grow its team and create jobs in local communities as it opens new stores, hires new team members…”, supporting my long-term belief that the store (i.e. brick and mortar) is not dead.
- The transformation of both companies coming together will enhance the customer experience. John Mackey, Whole Foods co-founder and who will remain as CEO said, “We can’t wait to start showing customers what’s possible when Whole Foods Market and Amazon innovate together.”
- Tech teams at both companies are beginning to integrate Amazon Prime into Whole Foods Point of Sale system. Expect to see Prime members receiving special savings and in-store benefits that other customers will not be able to get. I wrote in my blog, “added consumer insights is a clear outcome of the two coming together;” an expanded Amazon Prime will provide both business units data to know what makes each channel’s customer tick and refining both customer experiences even further.
- Noted that Whole Foods has a strong Private Label offering that Amazon will leverage. Sure enough, 365 Everyday Value products are available today through Amazon.com & through other Amazon services like Prime Now where member customers get free two-hour delivery in select cities and zip codes.
- Amazon needed some brick-and-mortar business to respond to flaws prevalent throughout the e-commerce industry. With Amazon Lockers, the online return process should improve as Whole Foods customers will be able to complete returns during a visit to the store. Similarly, customers will have additional options for delivery and this will pressure c-store operators even further to find ways to be positioned with on-line ordering & pickup / delivery plans.
- Amazon Go is a technology play in motion and I expected more to follow. “The two companies will invent in additional areas over time, including in merchandising and logistics…” according to last Friday’s announcement.
In addition, something I missed as I looked ahead, Whole Foods reduced prices immediately on “a selection of best-selling staples” and in-store price / saving signage today “promised more to come.”
It’s day one of the Amazon / Whole Foods Market Grand Opening and Echo’s Alexa was there for the ribbon cutting, freshly displayed at a reduced price. The combined companies’ aggressive plans are certainly a voice that there is now a ‘click & mortar’ competitor to be reckoned with for both convenience store and grocery retailers.
Ed Collupy, executive consultant at W. Capra Consulting Group can be reached at [email protected] and be sure to visit www.capraplus.com for more retail technology and business insights. Collupy has IT leadership and business team experience directing and supporting retail systems for store operations, merchandising, fuel and accounting teams in the C-Store industry.