business & marketing

Amazon, Whole Foods, And eCommerce’s Final Frontier

Sean
June 16th, 2017
3 MINUTE READ


By now we’re sure you’ve heard the news: Amazon announced last Friday they’ve acquired organic grocery giant Whole Foods Market in a $13.7 billion deal—not bad for a company that, just twenty years ago, was content selling books online with a website that looked like this:

Amazon, Whole Foods, And eCommerce’s Final Frontier

Amazon’s baby pictures

A takeover of this size—by far Amazon’s largest—has already sent shockwaves through the business world. Amazon’s stock has skyrocketed (enough to cover the Whole Foods price tag), while the value of other major players in the grocery sector took a nosedive.

But the truly intriguing effects this deal will produce don’t involve Wall Street. No, the most important ramifications lie in the nebulous world of grocery eCommerce.

Why You Don’t Shop Online For Groceries

Grocery is the ecommerce industry’s white whale, their final frontier. We’ve ingrained the idea of online shopping into our culture in just about every sector, industry, and space you can think of—but perishable items, especially the edible ones, can’t seem to make the jump into the mainstream.

Sure, some grocery chains offer services like Giant’s Peapod, which allow their customers to purchase their groceries online. And meal-kit services like Blue Apron or HelloFresh have begun to enter the cultural consciousness as well.

But there hasn’t yet been a push for the digitization of grocery of this scope and size—largely because of the industry’s precarious nature. Grocery store profits are meager compared to other retail sectors due to it’s crowded market space and transparent pricing.

But with the undisputed king of ecommerce, Amazon, at the helm, it’ll be interesting to see if online shopping and the grocery industry can finally be united on a large scale. But how does Amazon hope to accomplish this?

Amazon’s Possible Paths Forward

Amazon CEO Jeff Bezos passed on a press call with journalists and Wall Street, so we don’t know quite yet. But the potential directions Amazon could take with Whole Foods are intriguing, especially with the company’s recent foray into IoT with their dash buttons.

One exciting possibility: Amazon can leverage Whole Foods extensive network of brick-and-mortar stores (all 461 of them), by implementing beacon technology into the physical shopping experience.

Amazon, Whole Foods, And eCommerce’s Final Frontier

(Source)

Some have already integrated beacon technology into their stores through OmniChannel Digital, a service Codal (UX design agency) partnered with that delivers personalized promotions, offers and other relevant information to customers as they shop.

Consider walking into a Whole Foods and entering the produce section. As you approach the salad greens, you get a notification on your phone from your Amazon app. It’s offering a deal for Prime customers to get half off their favorite salad brand.

Not only that, it’s displaying different salad recipes, the ingredients you’ll need for it, and where to find them in the store you’re in. And hey, while you’re at it, did you want to buy a new salad bowl or tongs on Amazon?

These are the kind of personalized shopping experiences Amazon already provides on its traditional online platform. Seeing it translated to the physical world on a monumental scale (Whole Foods’s patronage is large enough to post 15.7 billion in sales), would be not just exciting for us consumers, but could change the grocery store industry as we know it.

Sean McGowan
AUTHOR

Sean

Sean is a technical researcher & writer at Codal, authoring blog posts on topics ranging from UX design to the Internet of Things. Working alongside developers, designers, and marketers, Sean helps support the writing team to ensure Codal produces engaging web content of the highest quality. When not writing about the latest and greatest in digital design, Sean can be found baking, watching movies, or complaining about the shortcomings of his favorite Philadelphia sports teams.

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