Once again Bezos demonstrates his penchant for big, bold moves and acquiring Whole Foods is certainly that. I think this is an excellent strategic move for Amazon. Clearly Amazon has been making moves in grocery with the launch of Amazon Go and Fresh, but these are mere dabbles compared to the acquisition of Whole Foods — this is a whole new ballgame. With 430+ Whole Foods stores, Amazon is now firmly in the brick-and-mortar retail business. Welcome to the party Mr. Bezos.

Amazon’s acquisition of Whole Foods marks the beginning of yet another retail category under siege, similar to books, music, electronics, and toys that went before. I can only imagine Amazon plans to leverage the 400+ stores as mini-distribution centers from which customers gain access to fresh items via delivery, something that has been difficult to fit into the Amazon shipping model. This is a logical expansion of AmazonFresh, which charges customers an additional membership fee above Prime. I expect other grocery chains will need to step up their e-commerce plans, implementing drive-thrus and home delivery programs in order to compete. Whole Foods was the right target for several reasons. They have a reputation of being non-traditional and cutting their own path. Amazon’s plans to upend this industry will be well served by a culture that zigs when others zag, not unlike Zappos, another Amazon acquisition that appears to have gone well. Whole Foods’ size and market presence is large but not too large. That’s the right level of saturation if the stores are also to… Read more »

Irrespective of any superlatives we may use today about the Amazon-Whole Foods deal, it is difficult to overstate the deal’s long-term impact on the retail and consumer goods industries and their supply chains. It’s always darkest before a new dawn. The turmoil in retail today is a precursor to a brilliant renaissance where the leaders will meld new DNA, agile learning organization and robust technology all wrapped around a customer-centric strategic model that moves retailing from moving and selling widgets to giving consumers exactly what they need, when they need it so they consume it the way they wish and do it with ease and convenience — turning purchases into automated impulse buys triggered by subconscious needs. At the risk of understating the impact, here are several points to consider: Customer experience gets a major boost. This acquisition shatters the artificial division between physical and digital. Consumers weave in and out of these realms without giving them any thought – it’s a singular customer experience, end-to-end. Competition over customer experience will happen at that level.… Read more »

Can we stop talking about e-commerce eating the world now? If anything, this move validates that for many categories of retail, the in-store experience still matters. This move gives Amazon an incredible set of assets on top of which they can build true omnichannel experiences, and I look forward to seeing the innovation.

Amazon wants to be a significant player in the grocery space. They also want to dominate rapid delivery of e-commerce orders for food and other products. They want to apply their technology and customer knowledge to physical store supply chains and streamline the process.

In my opinion this is brilliant. Whole Foods will become a better operator with Amazon’s technology backbone. Amazon will get a stronghold in physical stores to build their mini-fulfillment center plan and deliver to the consumer faster. And this will further set Amazon apart from Walmart and other competitors because they can move faster.

This is clearly a shakeup, but with so many unknowns around strategy I don’t expect consumers to experience much change overnight. Amazon gets an instant footprint in grocery but will have to build many stores to reach a broad market. While there won’t be an immediate name change, my guess is that eventually the Whole Foods name will fade or be amended to “by Amazon.” As a person that gets a big portion of his diet from Whole Foods, I know firsthand that the grocer has had many shortcomings and that those dedicated to eating organic foods have had a lot of issues with them, especially over their support to kill GMO labeling. Depending upon what Amazon chooses to do, they may embrace those customers whom Mackey has disillusioned or may revamp the chain to be more mainstream. I think in time, they will go more mainstream. The real impact will be felt from competitors like Target and Kroger. I don’t believe they are positioned well enough to fight an onslaught in the category. Walmart… Read more »

I think Whole Foods will eventually turn into an Amazon Fresh/Amazon Go hybrid. The brick-and-mortar stores will continue to operate as regular grocery stores. But Amazon will also be able to offer faster grocery delivery, BOPIS and eventually implement nationwide “just walk out” technology. Whole Foods is also widely popular for their prepared hot foods and café, which plays into the Amazon Go concept of stopping in for a quick breakfast or lunch on the go. Amazon recently advertised Amazon Go job postings, hinting that they are already planning to expand the concept out of the flagship Seattle store.

Very bold and exciting move. In a few simple words, Amazon and Jeff Bezos have made a significant and very strategic move to both grocery and brick-and-mortar domination. While we were all under the assumption that Amazon was taking a crawl, walk, run approach into the brick-and-mortar commerce model with Amazon Books and Amazon Go, this monumental acquisition is a game-changer and demonstrates the power of Amazon’s capabilities.

The whole grocery industry should be on notice as Amazon has expressed that they are firmly in the brick-and-mortar business. Brick-and-mortar remains very relevant and is undergoing a transformation to be a customer-obsessed model.

This could go in many different directions over time. At first Whole Foods will remain standalone. But Amazon is certainly able to bring a technology, data and Prime focus.

On the technology front, that means more e-commerce and omnichannel to help Whole Foods expand its geographic reach without physical capital investment. Expect more Whole Foods orders online. Some day drones from roofs? Maybe, when now you have 450 rooftops.

With data, a blending of customer insight, especially around the upscale buyer, will help Whole Foods understand more habits in more categories about its own customers. This can promote both SKU expansion and rationalization.

With Prime, the model is not just about delivery but the pricing package itself. “Subscribing to your grocer” will become a new option to augment other Prime benefits.

I’m not surprised that Amazon has bought a brick-and-mortar chain, I have been predicting it for months because it’s the only way for Amazon to find profit on the retail side of their business.

I am surprised it’s Whole Foods. Amazon buys into a fundamentally troubled business model here and a company having to learn how to step back from unsustainable premium pricing.

This does fit with the Bezos purchase of the Washington Post — respected brand but with difficulties. And let’s hope that Amazon is wiser than some commenters I saw on Twitter this morning who were reinventing Whole Foods as merely a DC.

I expect Amazon will treat Whole Foods as true retail — the Amazon bookstores are not overloaded with online wizardry but are fundamentally just good stores.

The key to watch for: where next in Amazon’s search for retail profitability? Department stores? Home improvement? Mass market?

Whole Foods will become a test bed for all of what Amazon has been wanting to test in physical retail at scale. To really understand and scale ideas like Amazon Go, Amazon needs access to real physical retail businesses and this is a fast path. Amazon then has the ready platform and real estate assets to scale what works and continue their retail growth path by taking share from slow moving traditional grocery retail. It’s starting to get a bit cliché, but retailers like those in the supermarket space need to start thinking more like technology and information companies. Otherwise, the lack of other businesses to hedge against like Amazon has will result in wishy-washy efforts that don’t yield any gains and the outcome becomes inevitable.

Two things: Amazon Go, and “As long as people live in brick-and-mortar houses, they WILL be shopping in brick-and-mortar stores.” I have written extensively on this subject since at least 2005, when I did a presentation on “The Amazonification of Walmart.” Unfortunately, Walmart never caught on. And then with “Selling Like Amazon… in Bricks & Mortar Stores!” I pointed out the incredible operational (relative to shoppers) similarity between Costco and Amazon. Last year, a senior manager at Costco announced that they were not going to make a major focus of their online operations, and then in the past few months the message was reversed and they ARE going to make a major focus on integrating their online AND brick-and-mortar operations. It is still early times in the total revamp of brick-and-mortar retailing and the INTEGRATION of bricks with clicks. It looks like the cutting edge of that integration is now pretty well in the hands of Amazon. At least they are working on the REAL problems: “rat maze” stores with massive “parked capital.” Our merchant… Read more »

A few quick implication for grocery: Technology is the obvious starting point. While it is too early to know how Amazon will leverage an instant 435 distribution points nationwide, it is clear that they will. An industry with many executives trying to ignore the technology changes around them can do so no longer. Chains that do not aggressively and boldly embrace digital initiatives — big ones, not simple IT plans — will be dead within two years. Chains like Walmart, Kroger and HyVee, which have been making impressive strides with technology, are best positioned to withstand the increased technology pressure. Pricing. Amazon, even as a public company, has a long history of tolerance for losses on their commerce business. In an industry in which margins are as fragile as they are within grocery, Amazon may put further pricing pressure on the industry overall through reduced pricing on core merchandise, as well as low pricing on services such as e-commerce. It’s unclear which chains are positioned to withstand increased pricing and margin pressure. Brand. While there… Read more »

Who knows what to expect when you wake up each morning. Normally it is some tweet meant to be more derisive. But now we wake up to Amazon moving into new territory that is going to shake up old-world retail for a long time after the dust settles. I can see Amazon’s motives; but what is surprising is Whole Foods being the target. Certainly there are more better-managed and more profitable operations. But what do I know? I am sitting here typing and Amazon is out there buying businesses and becoming more profitable.

This acquisition gives Amazon access. Access to products, industry talent and even more operational knowhow re: perishables management, which they have been building and would have to spend too much risky money to continue to scale in-house. This is a move to accelerate their grocery ambitions. From a brand promise perspective, Whole Foods aligns well with Amazon; I can envision Whole Foods’ prices getting the ax, which will be good for consumers and bolster traffic. It also fits Bezos’ acquisition thesis: 1.) Customers love it; 2.) It can scale; 3.) It has a healthy ROIC; and 4.) It’s durable over time. Amazon Fresh is a sold service, which I believe will stay separate but be leveraged by this business. What does this mean for Instacart? These stores will likely get the Amazon Go treatment once they’re ready for prime time. Also, regarding the argument that stores are not “dead” based on what Amazon just did; well, Amazon is not buying all retailers. The de-materializing impact of digital will continue to manifest itself as Amazon and… Read more »

As an avid user of both brands, I’m pretty excited! Whole Foods at my door? A dream come true — although I do enjoy their physical customer experience. These are called “good problems.”

Aside from that, it’s just a brilliant move IMO. Solve the grocery dilemma by going to the top. Biggest win-win of the century so far.

I echo a lot of the other panelists: The move can help grow Amazon’s brick-and-mortar footprint, but it’s more about taking the Whole Foods brand to every household in America that may order groceries from Amazon. It gives Amazon’s fresh food businesses (meat, produce, organics) instant credibility in homes without a Whole Foods location in sight.

As to the skeptics about whether Amazon can handle the logistics — can they deliver organic produce and Cheerios at the same time — this is the smartest logistics management company in the world that we’re talking about.

Finally, Amazon has a longstanding willingness to lose money in a new business where it is trying to grow market share. The days of “Whole Paycheck” may be over.

The world of food retailing just changed and in some cases brick and mortar is still important.
Just remember that Amazon owns Zappos, yet other shoe retailers still exist and thrive.

Well, answering the questions, rather than the questions behind the questions, the answer to the first one is that John Mackey has just solved his activist investor problem, gained a potential substantial cash infusion and will — for the short-term — carry on as usual and sleep a little easier. Now, as to the second question, I think I’d restate it as something like, “What will ownership of a major retail food chain mean for Amazon’s future plans to do to food what it has already done to books and so many other categories?” The answer to that question is that this is a total game changer, and could accelerate the beginning of that predictable end so many traditional retailers have been reluctantly trudging toward by thinking too much about what foolish constructs like “omnichannel” will mean, and not enough about how much the world, and their customers, have already changed. For established category players like Kroger, this is going to require erasing all the current white boards and approaching retailing with genuine creativity, a… Read more »

Two things come to mind regarding the deal announced today between Amazon and Whole Foods: 1. Most stories in the press that I have read are sharing the view that “Whole Foods Market stores and its headquarters operation won’t look much different after the sale.” I would bet on the veracity of that statement for about 12 – 18 months, but after that, the leadership, structure and overall operational persona of Whole Foods will be drastically different from what we see today. 2. There are multiple opportunities to “win” for Amazon and Whole Foods. For Whole Foods, they may add efficiency to their supply chain to bring down the prices of healthy food products and shed the image of “whole paycheck.” Just read the funny tweets about the sale today and you’ll see how strongly painted the brand is with that imagery. For Whole Foods, they may be the first to democratize healthy eating. While many consumers are interested in eating better and taking care of their health, it is not affordable for most. This… Read more »

The grocery industry is about to change! Amazon may cause some disruption, but I believe they will raise the bar for the industry and consumers will be the beneficiaries.

Certainly gives the Amazon Fresh strategy a new boost with the store coverage, access to Whole Foods’s vendor relations and private label goods, and access to a customer base that is following the lifestyle. The key will be the details, how does Amazon run Whole Foods in a way that doesn’t alienate their core base, yet inject the Amazon supply chain capabilities, and integrate Amazon Fresh to Whole Food’s delivery and store pickup system.

This move by Amazon shows us how seriously they are going after the grocery segment. There is no longer any doubt that after attacking apparel, they intend to disrupt and pursue the grocery segment intensely. We can also settle the debate as to whether or not we should call Amazon a “traditional retailer.” While Whole Foods is not having as much success as they once did, this gives Amazon a strong foothold to make good on many of their experiments ranging from drone delivery, Amazon Fresh Pickup, etc. Let’s not forget Amazon’s strengths in logistics and delivery/shipping. This acquisition will only help them further deepened their strengths in creating new delivery models. It’s a jumpstart they can leverage dramatically. I would not be surprised to see a rebranding of some Whole Foods stores into Amazon Fresh stores either. This will certainly be interesting!

Amazon’s big move will not only allow them to be in the brick and mortar business but will cause traditional retail disruption for everyone else. This will cause transformation and revitalization in the retail sector when Amazon starts rapidly deploying big ideas and new ways to make retail great again. Unfortunately, those that do not have the ability to follow or adapt, will be gone. Good news for retail in my eyes.

Amazon is poised to be the largest retailer in the world, and Walmart in second, as this deal turns up the heat for many other retailers. To me this is where Amazon wants to go, without all the fuss of doing this alone, and Whole Foods is perfect for their next conquest, which is the high end consumer. They have the best logistics, and by adding all these stores that are already in high income areas, I look for Amazon to crush the local “foodies” stores and many others like them. Kroger and other fine, high end supermarkets that are trying to get into the game are seeing a giant roadblock, so it just isn’t the locals but large chains will feel the pinch as well. The Uber and Lyft drivers will also see their opportunities for extra money for food delivery go down in these areas, as Amazon wins every time, with better equipped vehicles, to do perishables the right way. Retail isn’t for sissies, and Amazon will continue to seek more and more… Read more »

Amazon will have a new set of retail skills to acquire — the U.S. grocery business isn’t easy (ask Tesco). But even so, the company has proven they are adaptable if nothing else.

I think the stock market reaction told the story: Kroger down, Amazon/Whole Foods up. However, I am not sure this retailer will take much share from Walmart. I believe that shoppers from Target, Costco, Safeway and even regional players like Wegmans will drift toward Amazon/Whole Foods. These shoppers are looking for high quality merchandise as well as convenience. They are tech savvy and ready to adapt their habits to get what they want — just like Amazon itself.