Amazon’s Whole Foods Market takeover is the buzz that keeps on buzzing. This deal is affecting Amazon and Whole Foods, as well as all the grocery competitors who are already in the midst of a pricing war. The acquisition is changing the way consumers shop in store and online. Here’s a top line of how Amazon is impacting Amazon, Whole Foods, and everyone else:
1) Will AmazonFresh change for the better?
Amazon has been working hard to grow its online grocery service, AmazonFresh. It’s been a slow growth as the concept of online grocery remains a “logistical puzzle.” This hasn’t stopped Amazon from trying to convert Prime consumers to Fresh. The Whole Foods deal should wipe away any trust issues that consumers may have had when it comes to ordering groceries online. And it will give shoppers access to high quality fresh food at a price they actually can afford.
2) Will Whole Foods change for the better?
Retail consultant Neil Stern says, “Amazon is a data-driven company while Whole Foods is an instinctive, merchant-driven company.” Sources say that the differences between these two powerhouse companies, will create synergies they both need. Whole Foods has lost customers because the prices are too high. Their partnership with Amazon will allow the company to not only lower prices, but will also allow them to price smarter, thanks to Amazon’s rich data. Stern also says “Amazon is a data company first and foremost.” The intel and analytics will enable Whole Foods to collect all kinds of data on their customers that they haven’t had access to. And we know how powerful that can be.
3) Will this escalate The Pricing War?
This deal has competitors feeling the pressure. While they have high quality goods in the aisles, they may have to lower the prices below their actual value. Stores already feel the pressure to lower prices to stay competitive with Walmart. This Amazon deal could create a whole other set of challenges.
4) Will this heat up the “Supermarket War”?
The announcement of this acquisition was swiftly followed by falling shares of Walmart, Target, Kroger, and Costco. Business Day says that “Amazon is poised to reshape an $800 billion grocery market that is already undergoing many changes.” Leading grocery stores are faced with the threat of Amazon’s technology, data capabilities and the convenience of online shopping.
As if this wasn’t enough “Grocery Giants” are also fearful of what’s to come from Lidl and Aldi, European grocers that have made quick inroads in the US. Both companies have major expansions in full swing. Experts also fear that Mom & Pop shops will be pushed out, as big and small chains compete in this extremely cluttered market.
This deal has set off a catalyst for change and competition in the industry, unlike anything we’ve seen in the past. Consumers will benefit from pricing, variety, and the democratization of fresh. Competitors will be pushed to make major changes.
Is your brand feeling pressure from the acquisition of the century? If the answer is yes, then let’s talk. I know I can help.