What an amazing development…
Online retail giant Amazon is making a bold expansion into physical stores with a $13.7 billion deal to buy Whole Foods, setting the stage for radical retail experiments that could revolutionize how people buy groceries and everything else.
Amazon could try to use automation and data analysis to draw more customers to stores while helping Whole Foods cut costs and perhaps prices. Meanwhile, the more than 460 Whole Foods stores in the U.S., Canada and the U.K. could be turned into distribution hubs — not just for delivering groceries but as pickup centers for online orders.
“The conventional grocery store should feel threatened and incapable of responding,” Wedbush Securities analyst Michael Pachter said.
Moody’s lead retail analyst Charlie O’Shea said the deal could be “transformative, not just for food retail, but for retail in general.”
Amazon’s online business model has contributed to the destruction of brick and mortar retail, and now they are pivoting into main street retail? Fascinating.
This move is more defensive than offensive. Amazon’s real profits come from cloud side of it business. Also Whole Foods is practically nonexistent in southern Wisconsin.
<blockquote>Meanwhile, the more than 460 Whole Foods stores in the U.S., Canada and the U.K. could be turned into distribution hubs — not just for delivering groceries but as pickup centers for online orders.</blockquote>
Mostly this, though it would be the warehouses that Whole Foods uses and not the stores themselves that would be the backbone of Amazon’s fresh food delivery system.
As for the “conventional” grocery store, they’re already adapting. Walmart (of all places) has curbside pick-up of groceries, and Meijer just launched delivery.