It was recently announced that Amazon planned to purchase Whole Foods for the hefty price tag of $13.7 billion, and it seems the mega giant online retailer has found a great opportunity in Whole Foods.
But this didn’t come out of no where. Amazon has been investing slowly in online food retail. Earlier this year it opened two click-and-collect grocery store pickup locations, called AmazonFresh Pickup, in Seattle. And it’s likely that Amazon will use its Whole Foods purchase to leverage a big move into online groceries.
Many are wondering how Amazon will do managing a brick and mortar store. However, Amazon has also already been moving into the brick and mortar sector by opening several Amazon Books stores and various pickup locations across the country.
Amazon’s initial experiments and investments in online food retail and in brick and mortar stores laid the tracks that lead up to their purchase of Whole Foods. What is most exciting about the purchase is the innovative possibilities in the way Amazon utilizes Whole Foods.
It is not yet clear what plans Amazon has in store for Whole Foods, but it certainly has big plans in store for grocery shopping at large.
In December Amazon revealed a concept video for a physical store called Amazon Go.
The store is designed for shoppers to use an app, also called Amazon Go, to add the products they plan to buy to a digital shopping cart. They can then walk out of the building with their purchases without waiting in a checkout line.
The store and app operate through Amazon’s AI machine-learning technology. The app automatically identifies what items you add to your physical shopping cart, displays the items in your virtual cart, and then bills you when you walk out of the store. This means no more waiting in slow moving checkout lines. The opening of Amazon Go was postponed earlier this year due reportedly to technical glitches, which means until a new opening date is set, we will have to be content with what new programs result from of the Amazon-Whole Foods deal.
What is likely, this Forbes article suggests, is for Amazon to use Whole Foods to blend online and in-store food shopping. This bricks and clicks blend would be on point with the market: many “e-tailers” are moving to brick and mortar stores while many traditional storefront retailers are incorporating online and social media features into their sales and customer service models. Physical stores provide a rich shopping experience through appealing displays, social interaction, and the chance for retailers to strengthen customers relationships, making the Amazon-Whole Foods deal a win-win-win scenario for the retail giants and their customers.