Amazon’s purchase of Whole Foods not only gives Amazon a food supplier to feed, if you’ll pardon the pun, its online grocery delivery business, but it could also be the keystone that locks together all elements of its retail strategy – Amazon Fresh, Go Stores, Alexa Home Device.
Fresh foods – and especially Whole Foods – is the high turnover, highly profitable end of the retail business, and is ideal for transformation using mobile. This move not only gives it access to the food retail market, but also the real estate needed to create a chain of new style high street stores.
“Amazon is known to be developing cashier-less stores in the US – It’s already trialling them in Seattle,” says David Jinks, ParcelHero’s Head of Consumer Research. “A chain of automated Whole Foods stores, in the US and here in the UK, might prove attractive to busy younger shoppers, hard pressed for time but interested in eating healthily; which would complement the online business.”
The deal makes sense as Whole Foods attracts entirely the young, middle class consumer Amazon [IRDX RAMZ] is trying to reach with its latest expansions into new markets such as pharmacies and car sales. The Whole Food market chain shook up the food retail industry in the same way Amazon has shaken up e-commerce at its launch, bringing organic and health foods to the table of people across the US and Britain.
But recently Whole Foods’ growth has stopped and earlier this year Whole Foods revealed it was to close nine US stores
The deal therefore helps both. According to senior analyst at Forrester, Brendan Witcher: “Up to this point, Amazon has been dabbling at getting into physical stores, but they still need to learn to become a good physical retailer. That takes time and expertise. This acquisition allows them to expedite that learning. That said, we won’t see Amazon logo replacing Whole Foods signs anytime soon. On the flip side, Whole Foods has been behind the curve for a while on digital transformation – even using Instacart to help them along. In many…