Analyst: Prime perk could eventually double customers at Whole Foods
It has been estimated that 20 percent of Amazon Prime members are also customers at Whole Foods. With yesterday’s announcement that Prime members will receive added discounts on sale items and other selected products at every Whole Foods in the U.S., the potential for the organic grocery chain to increase its customer count is significant. At least one analyst believes Whole Foods could as much as double the number of customers it has over the next five to 10 years as a result.
“If Amazon has 60 to 70 million Prime customers in the U.S., there are probably about 20 to 30 million that live near a Whole Foods that don’t regularly shop there,” Mark Mahaney, the lead internet analyst for RBC Capital Markets, told CNBC.
Beginning tomorrow, Prime members will receive a 10 percent discount on all sale items at Whole Foods. They will also receive added savings on select items. A press release to announce the nationwide launch said the grocer has cut the price of organic cherries and yellow peaches by $2 a pound, baby back pork ribs by $5 a pound and sockeye salmon by $6 a pound.
“Customer feedback has been overwhelmingly positive — in fact, Prime members have adopted this benefit at one of the fastest rates we’ve seen,” said Cem Sibay, vice president, Amazon Prime, in a statement. “Since starting this rollout in mid-May, Prime members have already saved millions of dollars on everything [items] from seasonal favorites to popular products.”
Prime members who are also Whole Foods customers also have access to free two-hour shipping (not including driver gratuity) via Prime Now. Members with the Amazon Prime Rewards Visa card also receive five percent cash back on purchases made at Whole Foods.
- Savings for Prime Members at Whole Foods Market Available in All Stores Nationwide Starting June 2 – Whole Foods Market
- Amazon could double Whole Foods’ customer base with Prime perks: Analyst – CNBC
- Whole Foods to become a Prime perk for Amazon’s customers – RetailWire
DISCUSSION QUESTIONS: Do you expect that Prime member savings at Whole Foods will lead to a substantial increase in the number of people who shop at the grocery chain over the next five years? What impediments, if any, do you see in the way of Whole Foods converting large numbers of Prime members into customers?