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Continued on page 40 ▶
IT COULD BE A
“GAME CHANGER”
OR
A
“MASSIVE DISRUPTION”
AND EVEN
“CATACLYSMIC”
. BUT WHEN INDUSTRY
PUNDITS ARE ASKED ABOUT THE OVERALL
IMPACT OF AMAZON’S ACQUISITION OF
WHOLE FOODS, THE BASIC ANSWER IS
“GOOD QUESTION!”
Continued on page 32 ▶
The $13.7 billion purchase by the dominator of digital retailing
gives Amazon a valuable imprint in the brick and mortar world – a
foothold it will use to broaden sales of food and non-food products
and to expand its already extensive, but costly, distribution system.
The company recently announced the first in a series of steps that
would validate the industry’s concerns, including lowering prices on
staples like organic bananas, farm-raised salmon, brown eggs and
ground beef. "We’re determined to make healthy and organic food
affordable for everyone," Jeff Wilke, CEO of Amazon Worldwide
Consumer. More prices will be lowered as Amazon completes the
integration of Whole Foods, he added.
As expected the company is also making its 365 private label available
on its digital network including Amazon.com, Amazon Prime,
loyalty programs which includes some 25 percent of U.S. consumers,
Amazon Fresh and Prime Now,
In order to facilitate the Amazon Prime loyalty program, the
company will expand its click and collect model with Amazon lockers
in Whole Foods stores.
For Whole Foods, generally perceived as the gold standard in healthy
eating, Amazon’s distribution efficiencies may be a way to increase
sales across more demographics, and beat back competitors who have
captured a bigger piece of the organic pie.
Still unclear is what the reaction of the industry at large will be to this
new entity and whether marketing, merchandising and expansion
plans will remain relevant in what is clearly a new world order for
supermarkets.
“I’d like to say I’m seeing amazing reinvention taking place. But
the truth is it hasn’t,” said Doug Stephens of Toronto-based Retail
Prophet. “Right now innovation in grocery is largely window
dressing. Chains are making stores look better, making food fresher
and becoming more competitive on price. But all of these things are
linear and incremental. That’s not the way Amazon thinks.”
By and large retailers are not reinventing the way people buy
groceries, he said, noting that it leaves them vulnerable to the kind of
disruption that Amazon can generate.
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ALABAMA GROCER |