Reality Check for Traditional Supermarkets as Amazon Acquires Whole Foods

When Amazon acquired Whole Foods for $13.7 billion on June 16, the food retail world woke up to a new reality – the prospect of relentless competition from the eCommerce giant and its desire to dominate the market for years to come. The fact that Amazon backs it up with amazing efficiency and daring strategies, makes it even more of a worry for its competitors. 

On the other hand, the supermarkets and grocery businesses are the ones that will have to figure out ways to meet the challenge. Amazon will be unloading its heavy artillery armed with big data and the only way to tackle that will be to match the firepower which most supermarkets and grocery businesses don’t have.

If they try to make peace, Amazon is likely to make them an offer they can’t refuse, and tell them ‘it’s my way or the highway.’ Grocery retail is now increasingly coming into the focus of technology as traditional and relatively old-fashioned businesses gradually come under its ambit. These segments haven’t had any innovation for years even though some outlets offer self-checkout but that is few and far between. In most supermarkets, customers still have to stand in long queues and that’s where technology is going to aim at. It boils down to convenience and most importantly, time.

The use of customer data is unknown to these traditional outlets because most of them are not bothered about their customers’ behavior at the point of purchase. They don’t know that customers’ market movements can be tracked and so can their purchase patterns. Amazon is definitely going to bring all of that into play with Whole Foods, which is good for the market. Of course, Whole Foods had literally dug itself into a hole with its ridiculously high prices for the organic foodstuff to sells. Amazon is surely going to make the necessary corrections because it will aim for scale in quick time. Amazon’s won’t entirely go for e-commerce with Whole Foods but will also spice up the in-store experience with technology that will help eliminate queues. Overall, grocery retail is in for a major shakeup.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.