Today’s announcement about Amazon buying Whole Foods adds an interesting twist.
I love the shopping experience at Whole Foods. Of course, I realize the prices on many items are high, but the environment and people always make me feel at home.
This is a big investment in both food, grocery, and retail by Amazon. It also is a way for Amazon to fight Wal-Mart and their retail business – just as Wal-Mart is fighting Amazon online. John Mackey, Whole Foods CEO and Founder is staying to continue to run the company.
And now poor Kroger has to compete with Amazon after just coming off terrible earnings.
What can Amazon do to help Whole Foods find it’s Mojo?
- Amazon has always been customer centric. They are always looking at improving the experience. By finding ways to reduce costs, they can help attract new customers who are fearful of the whole paycheck albatross around their necks. Advertising won’t drive more customers into the stores. Better value will. Bezos is known for keeping an empty chair at meetings to represent the customer. Whole Foods recently introduced an app to allow customers to get some discounts. It came about four years too late.
- Amazon is the premier retailer in the U.S. and probably the universe. They have systems and processes that can only enhance how Whole Foods moves and manages goods and services. Becoming more efficient and effective matters. Taking cost out of an inefficient system will bring down the cost of goods sold. It can also improve the freshness and quality of what they sell. With Amazon Fresh and Whole Foods merged into one business unit, the opportunities for organic growth is seeded.
- Amazon has been trying to figure out home delivery of groceries for years. By acquiring 500 locations (or mini-warehouses), they create an opportunity to make same day or same hour delivery a reality at the higher end of the market. I bet they find ways to allow me to take a virtual walk the store and pick the produce I want. Artificial intelligence and the cloud services power Amazon – and now can be deployed into Whole Foods environments.
- Leave the culture alone. Whole Foods has created a brand built on values of social consciousness. Just like when Amazon bought Zappos, they never touched the culture. They let Tony Hsieh do his thing. Amazon allowed the holacracy (self-management) experiment to happen. They eliminated managers. Now Zappos is experimenting with something called TEAL? I think Amazon will use their experience with Zappos to inform how they manage Whole Foods.
How do you see this acquisition changing Whole Foods?
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Photo Courtesy of Whole Foods Markets. All rights reserved.