(Whole Foods' Oklahoma City location at 6001 N Western Ave)
The June announcement that Amazon was purchasing Whole Foods led to a lot of excitement and speculation. Much of the perception is that Amazon is destroying traditional retailers, the acquisition turned that same speculation to the grocery sector. But, what will Amazon do with Whole Foods?
Clearly, there are some smart people over at Amazon, and they no doubt have a clear-cut strategy. Much of the speculation focuses on doing what Amazon does best, refining logistics, providing both a physical distribution point and a pickup center. After all, Amazon at its most basic is an outstanding logistics company. There will no doubt be more. Perhaps Amazon will put into practice the virtual check-out system they have been experimenting with. Alexa may reorder your groceries on request, or you can use the Dash Wand to get the ingredients you need for your favorite cookie recipe. Maybe the stores will be the physical sites for drone delivery. Many see the purchase as a platform for Amazon to experiment and refine their focus on their customers, mainly convenience to their customers.
We tend to think that Amazon can do no wrong, so will this work? Here are a few things that will make it hard. The culture of the two companies is very different. Amazon is relentless with their focus on the customer and cost, while Whole Foods is resolute with employees and quality. Whole Foods has made its name on high-end products, being organically grown and locally sourced. If Amazon changes this, will Whole Foods maintain their cache? Or is Amazon just buying buildings?
Another thought, in the grocery world, Whole Foods is a pretty small footprint, does this move the needle for Amazon? Not to mention that the Kroger’s and Aldi’s of the world aren’t going to lie down and go away quietly. Lastly, Whole Foods, financially, was not doing so hot anyway. Can Amazon take a weakly performing business that they have limited experience in and turn it around?
It’s hard to bet against Amazon at this point, but the success of their Whole Foods purchase is not a given and will make trips to the grocery store, virtual or in-person, a bit more exciting.
