Retail Shakeup: Amazon Buys Whole Foods Market

Amazon's got its eyes on the retail industry with its latest purchase of the Whole Foods Market.


Late last week, Amazon announced that they would be purchasing American organic grocery company Whole Foods Market for almost $14 billion, the biggest merger in Amazon’s history.

The deal has sent shockwaves around the world, as it is the clearest sign that the e-commerce giants are ready to take over and disrupt the retail and supermarket industry.

Tech Exec. breaks down why this deal will soon make people wonder how they lived without these innovations before.

Time For Change

When supermarkets were introduced in the 1930s they themselves revolutionised the retail industry. No longer would you need to go to the milk store for your kids, the butcher for tonight’s dinner or the bread shop to buy a loaf, it was all in one place.

Contrasting to what were then bold ideas, brick and mortar stores have been reluctant to adapt to new technology and, from a customer experience perspective, have stayed more or less the same for decades.

Amazon have already demonstrated that they are looking to change this, introducing their prototype grocery store ‘Amazon Go’, where there are no cashiers. You simply take your groceries off the rack and walk out, with cashless payments available on your phone, similar to Uber.

Although it has reportedly come with it’s learning curves, Amazon Founder Jeff Bezos has shown a willingness to try new things. With his successful track record this only means that sooner or later, they’ll get things right.

Much has been said about organisations looking to prepare for Amazon’s retail industry shakeup, but very little is being done.

Amazon Founder Jeff Bezos Source: Reed Saxon
Amazon Founder Jeff Bezos Source: Reed Saxon

Retail incumbents like Walmart or Costco in America, or Coles and Woolworths here in Australia, should take seriously the warning shots Amazon are firing before they suffer from a fatal wound.

Physical or Digital – How about Phygital?

Whole Foods has 430 stores across the US, Canada and the UK, which gives Amazon ample opportunities in different locations to test the waters with new ideas.

Amazon will gain a great understanding of how technology could change how people select and purchase products from their experiments, something that very few of their competitors are willing to do.

The takeover shows that $250 billion company acknowledge that when it comes to grocery, customers prefer a physical presence to clicking buttons.

Having stores around the area also means that distribution becomes quicker for consumers as well, since there will likely be a closer delivery location than the warehouse.

Amazon though, will be looking to combine the physical presence of stores with an excellent customer experience delivered with digital aspects, from mobile applications to IoT technology, creating the ultimate phygital experience.

What Does this Mean for Australia?

Australian retailers are aeons behind similar organisations around the world, but haven’t been punished for their lack of adaptiveness due to no one willing to be the first to take a leap into the unknown.

Amazon are coming to Australia in the second half of 2017, and it’s time for those with a giant share of the consumer market to innovate or fall, as the introduction of Amazon will mean that the Australian market will become survival of the fittest.

Rather than reacting to the endless innovative ideas that Amazon will bring, retailers need to sit down and really think about what the customers want and how they can give it.

To compete with Amazon, you need to beat them at their own game. That means being the first to take the risk of trying new ideas rather than wondering what could’ve been.