Amazon is still testing its Amazon Go concept, which is expected to eventually be virtually everywhere, even as it expands its distribution capabilities by building multiple distribution centers all across the country. This sort of expansion is necessary if you want to be able to deliver goods to an increasingly demanding customer. And the acquisition of Whole Foods Markets gave the company immediate credibility among the natural/organic crowd as well as an immediate outlet for its Prime Now service and a brick-and-mortar presence for some of its products. So far it has all gone according to plan.
Whole Foods has become so important to the company's marketing strategy, that Amazon has decided to add lots more stores, putting more customers within reach of its two-hour delivery and pick-up service. Prior to the acquisition, Whole Foods struggled to find the funds for any meaningful investment in marketing strategy, let alone a major expansion, but that is no longer a problem. Amazon is a very rich daddy indeed.
The plan is to invade regions such as Utah, Idaho and Wyoming, where the retailer lacks a presence as well as expand deeply into major metropolitan suburbs. At 45,000 square feet, the new locations will likely be larger than current Whole Foods store formats to accommodate the warehousing and delivery/pick-up staging areas. And to think that not long ago Whole Foods marketers were more interested in opening smaller-sized markets in urban areas. These "Neighborhood Markets" failed to catch on. The strategy has shifted.
By all measures, the Amazon/Whole Foods marriage is turning out to be a match made in Heaven. In a recent survey of 1,200 shoppers, half said that they shop at Whole Foods more because of Prime promotions. Employees demonstrate improved morale, and raises are now given instead of the layoff pink slips in days of yore. Fears of Amazon leadership somehow diluting the integrity of what Whole Foods offers are completely unfounded thus far. The company is as natural and organic as ever.
Sales have increased overall and prices are beginning to fall as the grocer generates more sales volume and integrates with Amazon's logistics. An increase in profits has remained elusive for now, but that's what happens when you invest in your product, sacrificing short term gains for a more bountiful future. For Whole Foods, the future looks bountiful indeed.
You must be a registered user to add a comment. If you've already registered, sign in. Otherwise, register and sign in.