How Amazon and Whole Foods Will Change the Way You Shop, Besides Lowering Prices
For anyone who’s ever chosen doubled paper bags full of organic groceries over a well-funded savings account, Amazon’s move to slash prices on more than 40 items at Whole Foods on Monday was more than welcome. However, as exciting as scooping up cheaper avocados, rotisserie chickens, and almond butter may be, the big batch of price cuts is just the first of many sweeping changes the e-commerce and technology giant is expected to make at the grocer in the next few months -- some of which will likely upend not just the way you shop, but the retail landscape at large.
Amazon has so far revealed only a handful of details on its master plan for grocery domination with Whole Foods, but here are some major changes to look out for in the near future:
In-store Amazon LockersAmazon has long offered the option of picking up your order or returning your items via its more than 2,000 physical Lockers sprinkled across the country, and it hopes to expand its brick-and-mortar footprint now by installing additional Lockers at a number of Whole Foods’ more than 470 stores. That means it’s about to get even easier (and faster) for you to get your hands on the stuff you order on Amazon, by simply swinging by your local Whole Foods -- which you may have already planned to do anyway -- to pickup your order instead of having it shipped to your doorstep.
Plus, it'd also make returning Amazon orders less of a pain in the ass, since you could just drop them off in a locker during your trip to the grocery store. In other words, you can walk in with the $50 banana ice cream machine you impulse-bought the other day and walk out with the organic eggs and milk you needed to grab.
The ability to stock up on staples onlineIf you're a big fan of Whole Foods' generic brand, 365 Everyday Value, and not going to the grocery store, you'll be pumped to learn that you can already order a whole bunch of 365 items (plus products in the Whole Paws and Whole Catch line) on Amazon, Amazon Fresh, and PrimePantry. That means that as a Prime member you can essentially pick out almost all the staples you need from the comfort of your couch, and have them delivered to your front door.
Allowing customers to order Whole Foods-brand items like cereal, laundry detergent, pasta, and almond milk online is likely also part of Amazon's strategy to introduce the chain to a wide swath of the US mostly unfamiliar with it. As Crain's reports, despite its broad name recognition, Whole Foods really only boasts about 2% of the grocery market in America, a stat that can be attributed to everything from its reputation for being too expensive and upscale, to the fact that the overwhelming majority of its 460 American stores are located in and around major metropolitan areas.
Lots of potential new Whole Foods customers, which Amazon will desperately need to woo if it wants to take over the grocery industry, aren't going to feel compelled to change up their weekly routine of stopping by Kroger or Albertsons unless there is a significant financial incentive and convenience factor to purchase the stuff they want through Amazon instead. That said, the chain is going to have a hell of time trying to win over any new customers who aren't already somewhat interested in purchasing the sort of natural or organic fare that makes up the bulk of Whole Foods' offerings.
An Amazon 'store within a store'You better believe Amazon will be leveraging its newly acquired primo retail space with more than just groceries. In fact, it's already selling Echos via special in-store displays. Expect to see Amazon shilling lots more gadgets and frequently-purchased, high-margin products in the coming months.
While the company is mum on its plans, it makes sense that it would introduce special "try and buy" displays showcasing everything from blenders to flashy new smarthome products, Brookstone-style. It wouldn't be shocking if they make it almost too easy to shop the entirety of Amazon.com in-store, too. Need a new specialty baking item stat? Or did something in the bread aisle remind you that you need a new briefcase or a pair of socks? You might simply scan your Prime barcode at an in-aisle kiosk, order up whatever it is you need in a matter of seconds, and have it delivered the next day.
All the lines between where you shop for certain items are about to be blurred.
Hyper-personalized recommendations, and killer subscription dealsSay what you will of Amazon's creepily pervasive presence and intimate knowledge of your browsing and buying habits. Its ability to sort and track that level of intel may prove to be hugely convenient when it comes to shopping for groceries. At least, if you're you don't think about the privacy and world domination implications too much.
For instance, now that Prime is set to become the new Whole Foods customer loyalty program, it's probably safe to say your grocery purchases will be tracked the same way Amazon tracks your purchases online, so it'll know what, when, and how much of any particular item you buy. This will allow them to not only target deals specifically to you (e.g., send push notifications to your phone when something you buy frequently is on sale, recommend items/pairings similar customers purchased, offer freebies, etc.) but also entice you with a nominal discount to set up "subscriptions" for things you buy frequently, much like Amazon.com already does.
In theory, Whole Foods could allow you to simply set up recurring weekly basket of perishables like milk, eggs, and various produce, prepay for it, and just pick it up from an Amazon Locker on your way home from work, or on your way out of the store after browsing for whatever other ingredients you might be in the mood for that week. The possibilities here are huge.
Streamlined checkout with fewer cashiers and automated pickupIt's no secret that Amazon is interested in engineering the ultimate automated grocery store. In fact, it's already testing a clerk-less Amazon Go concept store in Seattle, where shoppers simply walk in, grab the grocery items they want, and leave without checking out (their Amazon account is automatically charged via special tracking sensors on things they carry out).
By taking the notion of self-checkout kiosks to the next level, Amazon would be able to squeeze quite a bit more money out of Whole Foods, since grocery stores operate on a notoriously thin profit margin, due in no small part to the cost of labor.