Amazon is moving quickly to leverage the reputation and physical locations of Whole Foods markets to tackle barriers for online grocery sales, which are consumer concerns about product freshness and delivery costs. Amazon is also addressing head-on one of Whole foods biggest challenges–price.
The new partners almost immediately offered savings upwards of 40 percent on best-selling grocery stables. The organic-focused retail chain also plans to chip away at Whole Foods negative moniker “Whole Paycheck” by promising more price reductions, likely in the form of special savings and in-store benefits offered to Amazon Prime members once the service is integrated into Whole Foods’ point-of-sale system.
While these price reductions aim at creating a positive first impression, experts suggest the greater impact of the merger will come from longer term plans to make Amazon lockers available at select Whole Foods markets. The addition of Amazon lockers would remove the need for consumers to pay for grocery delivery, which according to the 2017 Walker Sands Future of Retail study was cited by 44 percent of consumers as their top concern about buying groceries online.
The lockers also may encourage other Amazon purchases as customers could have the products shipped to their local Whole Foods market for pick up or send returns back to Amazon during trips to the store.
“With the Amazon acquisition, Whole Foods has become an omni-channel business overnight. The Whole Foods digital experience will be transformed by Amazon’s technology, enabling customers to shop and receive their favorite products in entirely new ways. Everything from quick mobile purchases to restocking items through Alexa capability will create a more seamless and complete user experience,” said Greg Ng, vice president of digital engagement at Point Source.
“The move is a clear step forward by Amazon in recognizing that trust has been and will be the key driver for sales in grocery,” said Dan Wilkinson, chief commercial officer of 1WorldSync. “Whole Foods has built a brand around trust through its organic-only offerings and transparent product contents, and Amazon is now taking advantage of this loyal customer base,” Wlkinson said.
