There is a very strong possibility that Amazon will completely change Whole Foods. They do of course have the option of doing very little with it, and basically, just let it run as is – Amazon can leave properties alone to do their own thing, Zappos being a good example.
Amazon are looking to get into the grocery business and do it in the big new innovative way. Amazon Go, their self-serve no-checkout, supermarket innovation could get a huge shot in the arm if Whole Foods 456 properties were to be morphed into this. This would mean a lot of job losses, which is most likely on the cards anyway.
Whole Foods is an expensive high-end retailer. There is talk that Amazon will look to bring down the cost and make Whole Foods more accessible to those that don’t want to spend their complete pay packet on the weekly shop! Maybe turn the store into a Prime membership only store, like Sams Club/Costo.
With Amazon’s expertise in warehousing and distribution, I can see Whole Foods properties becoming self-pickup destinations for orders online. Amazon Prime no doubt has a very large delivery and packaging cost – that could be reduced dramatically if they were to basically extend the Amazon Locker to all the locations. They also have the ability to further upsell other products and services by having clients visiting the store.
Could Whole Foods morph into an Amazon’s version of CVS/Walgreens like store? Everything you need under one roof.
Let us not forget about their vision for delivering goods via drones – these drones need a good launching off place as their range is only a few miles. Again, the Whole Foods properties can serve as a wonderful network for drones to deliver your fresh fruit and veg!
Seeking Alpha Editor Brandy Betz noted another interesting side benefit of the purchase of Whole Foods – Amazon can take away a major Microsoft customer and move them over to Amazon Web Services. Not a short term thing as this sort of migration is not a trivial matter, but it does serve to highlight just the sort of extra benefits Amazon brings to the party when they purchase a big property.
There is a lot of possibilities where Amazon can take this deal and there is no doubt a lot of retailers will be watching closely. One thing is for sure, they will not hang around. We will know what they are up very quickly.
alan williamson 