“I don’t like the thought of my fresh groceries sitting on my doorstep while I’m at work”, Anderson said. One possible example are faster checkout lines. “Furthermore, we don’t believe WFM fits into its membership and warehouse business model which has ample expansion opportunity globally and into other services and business needs”. “Because you already know we’re evolving”. No one carries cash anymore.
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I don’t often cheer acquisitions. Last year, Amazon unveiled Amazon Go, a revolutionizing concept of a utopian grocery store that relies heavily on Artificial Intelligence and Just Walkout Technology. It’s all about “walk out” technology.
As shoppers enter the store, they tap their smartphones at a turnstile. Link a calendar and Amazon may build you a menu for your dinner party on Saturday and send you a map of where everything is in the store. Amazon may track your physical navigation and learn your typical route though a store.
No fuss. No muss. Grocery downtime can spell disaster for customers, just ask United Kingdom grocery retailer Tesco, who had to cancel thousands of orders this week after a fault with software used by its workers who pick customer orders from stores. Now Amazon has a national brick-and-mortar footprint with which to rollout this game-changing technology.
Deutsche Bank on Monday lowered its rating from “buy” to “hold”, saying “the pipeline of positive catalysts has played out and the competitive backdrop is intensifying” as both Amazon and Wal-Mart press their online and in-store efforts.
It took a different path from online competitors like Shipt, Instacart and Peapod, which use existing retailers to deliver groceries and avoid holding inventory. Even Wal-Mart (NYSE: WMT) and Kroger (NYSE: KR) have been focused on online sales.
But antitrust officials would be naïve to view this deal as simply about groceries. It’s about gaining insight into customers from their in-store buying habits and blending online and offline in real-time. Richards says the percentage of people who use online grocery nationally is between 0.5 and 1.0 percent and that has room to grow. That’s a fivefold increase from the current 4.3% of all grocery dollars being spent digitally.
Although Whole foods Market Inc might expect a bidding war but it would be very hard for other competitors to sustain against the retail giant whose current stock market value is $475 billion. It has always been rumored to be on the prowl for a breakthrough deal, even as it set up its own much smaller Amazon Go and AmazonFresh Pickup stores as experiments. Image source: Whole Foods.
This data backs up something that I see firsthand. The big food chains have been consolidating for the past 15 years. Additionally, Uniqulo offers customers a digital runway where they can try on clothes, show off a bit, and get a better visual of how they look in the clothing.
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As the retail world continues to digest Amazon’s move to acquire Whole Foods, the first inkling of what the deal could mean for the upscale grocer was offered by its CEO, John Mackey. “Whole Foods is expensive enough”. Now two of those forces have combined. Amazon’s planned $13.7 billion acquisition of the organic and natural foods grocer signals a massive bet that people will opt more for the convenience of online orders and delivery or in-store pickup, putting even more pressure on the already competitive industry.
