Amazon-Whole Foods Deal is Closing Monday: How Will This Affect the Shopper Experience?

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Amazon-Whole Foods Deal is Closing Monday: How Will This Affect the Shopper Experience?

The massive Amazon-Whole Foods deal is closing this Monday and there are going to be immediate impacts at the shopper level.

Speculation is over. The massive Amazon-Whole Foods deal is closing this Monday and there are going to be immediate impacts at the shopper level. First of all, prices will be slashed on certain items ranging from fruits and vegetables to responsibly raised meats. This has an obvious and tangible impact on the shopper and will influence their habits. Amazon is also incorporating Whole Foods rewards into its prime membership program. A slower change, but perhaps more significant in the end (when it comes to shopper behaviors), will be Alexa’s expanded ability to order groceries and use personal data to make shopping recommendations. And, this is just what we know and can see on the horizon. The potential power these two brands have to reshape how we shop for food is limitless.

At our market research firm, we always begin with the shopper experience. How do they shop? What motivates them? How are they changing the marketplace? The Amazon-Whole Foods merger is the most expansive opportunity to date to watch how the deep pockets and brain trust of a technology company will upend the way traditional grocery has operated. Much less sexy than the dropping prices are behind-the-scenes decisions that will affect the shopper experience – distribution, sourcing, cost reduction pressures put on suppliers, etc. How will the fruition of this deal affect the way we shop at a fundamental level?

Grocery is one of the last traditional retail environments that has not been perfectly replicated or improved through an online experience. A primary reason for this entrenchment in an old model is that most grocery retailers are long-established brands with successful businesses. Think about it – we all know exactly what to expect when we go into a Safeway, a Wal-Mart, even a 7-11 – and, yes, a Whole Foods. Their models have worked for decades with very little disruption or true change.

In the parlance of Clayton Christiansen, grocery stores have the classic innovator’s dilemma – why invest in innovation when you’re still succeeding at what you do? Amazon, on the other hand, has successfully redefined shopping in every category EXCEPT grocery. Yes, they have Amazon Fresh and Dash buttons, but these concepts appeal to a limited group of shoppers and after years of heavy promotion have still not gone mainstream. There is something elemental about shopping for our food in person which online retailers have just not been able to address. Now that this deal is closing, the disruption promises sweeping change from prices to smart technology employing machine learning and automation to shift the way we shop.

In my opinion, this is a fantastic merger. Both are experts in their respective fields. Both have massive customer loyalty. Both are innovating and pushing the boundaries of their shopper experiences. If Amazon had bought a struggling grocery retailer, it would look like a land grab for cheap store space. Going after Whole Foods, a premium brand in no sign of trouble, indicates they are looking for a strategic partner. And sure enough, as this deal closes, we are seeing that it will mean very real change for shoppers.

As we’ve been watching this unfold, I’ve thought all along this was a good thing for today’s consumer and commentary surrounding the closing of the deal confirms this. Our research shows that shopper sophistication is at an all-time high and so is the pervasive expectation of “choice.” In all areas of life, technology is driving a heightened level of control – we can do everything ourselves and find out answers to all our questions. In addition, the expectation of personalization is at an all-time high – something Amazon already does in spades. In the recent TimeTrade State of Retail 2017 Survey Report, found that a high number of consumers would be willing to actually pay more for a personalized experience. Of the all-powerful Millennial respondents “nearly 70 percent said they would pay more for products or services if they had a highly personalized in-store experience.” The Amazon-Whole Foods deal will fill the exacting consumer’s need for engagement, information, control and convenience.

As Amazon wraps up this deal, they take one step closer to their big plans for our future grocery shopping. They have the brain power, the will to take risks and fail, and the hunger to keep pushing beyond what they have. We may not see it yet, but they have a ten-year plan to corner the market on this huge category. Get ready!

Author bio: With more than twenty years experience, Rebecca Brooks believes market research is failing the brands they support by relying on outdated models. She is a proud partner and co-founder of Alter Agents (, a full service market research consultancy redefining research in the age of the promiscuous shopper.

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