Image Courtesy of Amazon
October 15, 2024
Can Linking Amazon’s Grocery Banners to Amazon.com Elevate One-Stop Shopping?
Amazon is reconfiguring its fulfillment centers to allow Prime members to add goods from Amazon.com, Amazon Fresh, and Whole Foods in one cart to support the ultimate one-stop shopping solution.
In one experiment, Amazon is building its first-ever automated micro-fulfillment center next to a Pennsylvania Whole Foods store to enable the organic grocer’s shoppers to also purchase popular mainstream products from its Amazon Fresh banner and everyday essentials from the Amazon.com platform.
Tony Hoggett, SVP of Worldwide Grocery Stores at Amazon, said in a blog entry that adding a micro-fulfillment center to a Whole Foods location helps customers avoid buying from multiple stores for all their shopping needs.
“Customers shopping at Whole Foods Market today love the high-quality products offered,” he said. “We also know that many customers sometimes visit other stores to complete their shopping list. What if we could eliminate those extra trips without changing the in-store experience our customers love?”
With the addition of the micro-fulfillment center, Prime customers will have three ways to purchase items across Whole Foods, Amazon Fresh, and the Amazon.com platform from the single location:
- Online delivery
- In-store pickup at the location
- Online ordering while physically shopping inside the store
“Let’s imagine a customer is shopping in store,” said Hoggett. “As they browse the aisles for their favorite Whole Foods Market products, they can also easily place an order for Tide Pods and Pepsi from the Amazon app on their phone. These additional items will be prepared in the back-of-house while the customer finishes up shopping, and will be ready to go when they check out — all within minutes after placing the order.”
He added, “With micro fulfillment, customers get access to more products they want without having to visit multiple stores.”
With a similar shopper goal of making Amazon home delivery more of a one-stop shop, Amazon is also running a trial in the greater Phoenix area where customers can shop for grocery items — including fresh groceries — alongside Amazon.com products and have them delivered together. Tests in other locations are in the works. Hoggett said, “It’s Amazon’s unparalleled selection under one roof, coupled with same-day delivery speeds and multiple delivery window options, that sets this experience apart.”
At Amazon Fresh, 26 fulfillment centers will be adding “the best of Whole Foods Market and household goods on Amazon.com” to similarly offer Amazon Fresh online shoppers a wider selection of products across price points.
Hoggett said of the overall effort, “At the end of the day, customers want choice when it comes to groceries, and the ability to shop for different products, price points, and occasions, all within a shopping experience they know and love. They want to know they are getting extra savings and benefits, no matter if they shop online, in a store, for a weekly or top-up shop, or for budget or premium items. This is what we’re building at Amazon.”
Discussion Questions
Are Amazon’s moves to enable customers to bundle orders from its two grocery banners and the Amazon.com platform feasible operationally and a game-changer for shoppers?
Do you think that outfitting Whole Foods with micro-fulfillment centers or sharing grocery and non-grocery items in the same fulfillment centers holds a better chance for success?
Poll
Loading …BrainTrust
David Biernbaum
Founder & President, David Biernbaum & Associates LLC
Brian Numainville
Principal, The Feedback Group
Frank Margolis
Executive Director, Growth Marketing & Business Development, Toshiba Global Commerce Solutions
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Whole Foods lets millions of dollars walk out of the door because they don’t stock things the vast majority of their customers buy. The overlap with Target alone – where many of their customers go for things like regular laundry detergent and soda like Coke – is very high. It’s all very well saying that you’re “America’s Healthiest Grocery Store” but that doesn’t cut much ice when so few customer shop with health foremost of mind. Quality is higher up the pecking order for WFM’s own shoppers than health. And quality isn’t diluted by selling Coke or Tide. This new approach allows Amazon to preserve the Whole Foods identity (even if it’s somewhat flawed) and capture more share of regular shopping. The only thing I’d say is that the approach is a bit of a faff: shopping in store for some things while placing an order for others seems like over-complication. But it’s better than what’s being done at the moment!
So Amazon wants to “help” us avoid shopping at Target et. al ?? They really are looking out for us, aren’t they? 🙂
I think they want to help their sales line!
One day they have to help their profit line too
In a typical grocery store, there are plenty of options with plenty of price points. From generics to higher-end brands, the choices at a large grocery store often meet their customers’ different needs. So, why shouldn’t Amazon try to do the same with the online experience? Bundling different brands provides a variety of merchandise and price tiers, similar to the in-store experience. And people still get the convenience of the delivered experience.
helps customers avoid buying from multiple stores Oh please! let’s stop pretending this has anything to do with “helping”customers: it’s 153% designed to help Amazon. What’s next: being told we’re being “spared” competition?
It certainly makes shopping with them easier. But I thought you have to have a $35 minimum for Amazon fresh delivery or something like that. I still won’t use that service. I’m actually trying to reduce my spend with Amazon, not increase it. Until I feel like the company is treating its employees well and not spinning daily PR, I’m really losing interest. I spend enough money with them already
Micro fulfillment fills a void in Amazon’s consumer appeal. Having to purchase food from Whole Foods but unable to combine the order with name-brand consumer goods not carried by Whole Foods frustrates consumers. Even services like Instacart allow customers to mix and match all on one click. Micro fulfillment with the new pick up and delivery options will raise the bar.
I agree with David wholeheartedly – this was a void that has been negatively impacting CX for years, and with this functionality adding multi-vendor cart bundling to Amazon’s already competitive position, it should certainly have positive top line and bottom line implications in the near term.
From a reducing friction standpoint, this makes a lot of sense. Why make it difficult for shoppers to purchase from you?
Yes to reducing friction and hassle! And could be a bigger underutilized opportunity to top line and bottom line than anyone estimates. Smart to connect these features and platforms.
Sounds like Amazon wants to become Walmart. I mean, if a shopper wants to add Tide pods and a Coke fridge pack to her order while traversing the Whole Foods aisles, isn’t this what shoppers do at Walmart, Target and every other grocery store in America? One could argue that Whole Foods has better quality food and certainly higher prices, but does the average person really want to open their WF app with a basket full of food and a toddler in the seat? Great idea on the white board, but the probabilities don’t seem to add up from a macro standpoint. There will be some synergies and Amazon will take these as wins and move on to their next experiment.
Yes, I think we refer to this approach as “omnichannel retailing”. I hear that it could really turn out to be a trend. (please forgive my sarcasm…)
This makes a lot of sense. The shopper benefits and so do Amazon and Whole Foods. It’s a win-win-win.
.
This will work, however in my view it might further lower the shopping experience at Whole Foods. Under Amazon’s ownership WF’s has gone from a high end, healthy assortment of good in an engaging atmosphere to a nice (ish) store that feels like a mini fulfillment center already.
Which I do not like, but I am not representative of the market. Adding cross shopping capabilities is a top and bottom line winner. A shopping experience loser, but a winner overall.
A no brainer example of thinking like the customer, their journey, their time, and their hassles. Make this an easy to use feature and customers will understand they can save minutes or more on a daily basis. To me this is one example of how Amazon purchasing of Whole Foods makes sense.
This is just another reason for Amazon to increase their reach and appeal to more consumers in more ways. It is no different than shopping at a Walmart or Target, who already stock these items everyday. Here, Amazon is just going backwards from its history of establishing itself online first and then onground second. Walmart and Target are doing this in the reverse way by using their on-ground presence first and then establishing an online presence to compliment it.
We’re already seeing the buy in-store, pick-up now (BISPUN) model in physical retail environments gain traction in response to the rise of locking case friction. Consumers today prioritize convenience and efficiency, and innovative models like these allow them to easily shop for specific items without friction or the hassle or navigating multiple stores. I think Amazon’s new grocery approach will resonate well with consumers.
I believe this was always the vision: unify all Amazon offerings across all channels.
Customers gain choice across Amazon brands and how they shop. Amazon smashes the silos between food and non-food offerings and their respective pricing tiers.
This move increases convenience with a smoother customer experience.