We all know that Amazon takes the cake when it comes to ecommerce, and it’s been that way for a while, but recently Amazon has been taking large steps toward establishing brick and mortar store locations. Amazon Inc. is no longer just an online presence but is expanding to include Amazon Go, Amazon Books, Amazon Fresh, and now—Whole Foods Market.
The purchase will instantly take Amazon from having a few test stores scattered around to having over 400 locations in the U.S., Canada, and the UK. Amazon announced its plans to purchase the grocery chain for $13.4 billion on June 16 and the matter has been raising many a question. Amazon and Whole Foods might be viewed as opposite players in the retail game. Amazon rules the internet using data to better manage their customers and the online market. The company is dedicated to efficiency, giving people whatever they want at a low price. Whole Foods, on the other hand, claims many brick and mortar locations and works to provide consumers with fresh, locally sourced foods, which obviously must be purchased in store. It’s also been nicknamed “Whole Paycheck” because of its higher prices. So it’s clear why so many people tilted their heads when hearing of Amazon’s move.
Whole Foods has long been struggling to compete with grocery giants like Wal-Mart when it comes to food and beverage, as shoppers usually prefer to get their produce and such locally. Now that Amazon will be honing in on the grocery store fun, Wal-Mart and other large retailers will be under a massive amount of pressure to hold their own. If Amazon can overpower Wal-Mart for even a moment in the grocery games, there’s hardly a chance the store would be able to take back the lead. But make no mistake; Wal-Mart is not unaware of what’s at stake here. They have been making some moves of their own, announcing that it will be coughing up $310 million to buy online clothing retailer Bonobos and paying $3.3 billion for Jet.com last year. Where Wal-Mart is really lacking is in online commerce, and that’s exactly where they are focusing their attention, putting Marc Lore, chief executive of Jet, in charge of ecommerce. It is a smart move, but many wonder if it will be enough to fend off the relentless attempts of Amazon.
For Amazon, buying Whole Foods saved a lot of time that may have otherwise been spent building stores and trying to draw attention to them. The online giant has been dabbling in the realm of brick and mortar for a while now, so using the already established Whole Foods brand to get in on the real-life retail game really helped them skip a lot of steps. This decision perfectly displays Amazon CEO, Jeff Bezos’ intentions of taking over and revolutionizing the entire retail industry. Since Amazon GoㅡAmazon’s version of a brick and mortar grocery storeㅡgives customers a quick and easy experience with no checkout lines, many are assuming that Amazon plans to do the same with Whole Foods, eliminating jobs and relying mostly on automation.
In addition to potential job losses, many consumers might are also concerned about whether or not the purity and freshness standards of their organic goods will hold up under Amazon, whose bread and butter is efficiency. Simply put, a lot of people are afraid that Amazon will just industrialize a market that was designed to bring consumers as close to healthy, organic foods as they could get without going to a farm. There is still so much we don’t know about what Amazon really wants to do with this, but there will undoubtedly be some changes to the Whole Foods many of us have come to know.
by Robyn Forbes