How Will Amazon Buying Whole Foods Affect Customers?

Amazon has bought Whole Foods Market. Wow! Can’t believe I am typing that sentence. I have known for a while that it was only a matter of time before Whole Foods was going to be bought by another company.

To sum what is going down (thanks to NPR🙂

Amazon is buying Whole Foods, in a merger that values Whole Foods stock at $42 a share — a premium over the price of around $33 at the close of trading on Thursday. The Internet retailer says it’s buying the brick-and-mortar fixture in a deal that is valued at $13.7 billion.

“Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades,” said Jeff Bezos, Amazon founder and CEO, adding, “they’re doing an amazing job and we want that to continue.”

For Amazon, the move furthers its push into in-person retail, a direction it has been moving in with its Amazon Go and “Fresh Pickup” grocery experiments.

There have been rumors for some time now. I always figured it would end up being another grocery store chain making the move. With Amazon buying Whole Foods that completely changes how I think things will go in the future for the grocer. The landscape has changed!

I am going to give you my initial gut reaction on how I think this purchase could effect Whole Foods Market customers. I am sure it will be interesting to look back at after some time as past.

5 Ways Customers Will Be Effected by Amazon Buying Whole Foods Market

1. Technology

I have no doubt in my mind that Whole Foods is about to become the most technological advanced grocery store on the planet. They have been looking to re-invent themselves. Whole Foods has been the organic grocery store until other stores (Kroger, Costco, Walmart, etc.) caught up. These stores surpassed them in terms of sales. Now Whole Foods has a huge edge with gaining all of the insights and resources of Amazon. This will mean better technology in the stores that will lead to an improved customer experience. Take a look at their Amazon Go concept they launched in Seattle. I am expecting to see some of these innovations show up in Whole Foods Market stores.

2. Cashier and Self-Checkouts

Whole Foods has been pretty resistant to self checkouts in their stores. They focus on customer service and want that face to face encounter with their customers as they check out. I have to wonder now if Amazon will push for them to include self-checkouts based on what they are doing in their Amazon Go store. The downside to this is that less cashier jobs may be available.

3. Increase in the 365 store concept

Whole Foods has started another chain of stores called 365 by Whole Foods Market. In some ways it is a similar idea to what Amazon is doing with their Go store. I expect to see this concept expanded and refined. Whole Foods has been very slow to open these stores and are now in what they call their 2nd generation model for 365.

4. Amazon Shipping Abilities

When it comes to shipping goods, Amazon is the king. Their Amazon Prime program is the proof in the pudding. I can only order pretty much anything my heart desires and get it within 2 days. Their knowledge of moving goods can be applied to the way Whole Foods gets products into their stores. What positive effects this can have for the customer is:

1) Less items out of stock – Nothing more than makes for an unhappy customer is when the thing they traveled all the way to the store for is out of stock. If you get products to the store faster, then when something runs out which will still happens, it happens on Amazon now, then you can decrease the gap in which a product is out of stock. Happier customers spend more $$$.
2) Fresher products – If you are able to move fresh food from point A to point B to point C faster then naturally it will be fresher. This means better food for the consumer and less food waste for the store.

5. Product availability

Whole Foods pride themselves on working with vendors that they work with directly. Amazon brings the opportunity for these vendors to reach a wider audience and have their products move to markets they currently aren’t in. Whole Foods is divided up into regions. Different regions carry different products. The Whole Foods in Nashville, may has items that the Whole foods in Ann Arbor does not and vice versa. This can be a great resource for those that have moved to a different regions and still want their favorite local products.

What are your thoughts on the Amazon purchase of Whole Foods Market? Leave a comment below. I would love to hear from you.