If you walk into a Whole Foods store right now, you may see that in addition to buying a carton of organic almond milk with your free range chicken, you can also buy an Amazon Echo. So why would an organic food store be selling smart technology? Because Amazon recently closed a $13.7 billion deal to purchase Whole Foods and it’s about to change grocery shopping as we know it in terms of shopping, paying, inventory, and distribution.
Over the years, Whole Foods has gained a reputation for providing high-quality, natural and organic food but at a high price point, thus earning the nickname “Whole Paycheck.” Amazon hopes its acquisition of the grocer will change that image. The purchase instantly cut some of Whole Foods’ prices by up to 43%, making Walmart its new direct competitor. Bestselling food items like bananas, eggs, avocados, salmon, and butter were discounted at the 460 Whole Foods locations across the U.S., Canada, and Britain. Traffic to the stores has dramatically increased because of this and stocks of rival grocers went down. Mark Ordan, the founder of Fresh Fields Markets, a natural foods store that merged with Whole Foods in 1996, is all for Amazon’s ownership. “Too often, you go to brick-and-mortar retailers and what you are looking for isn’t in stock,” says Ordan, “You never have that problem at Amazon.” This is not the first time Amazon has tried to sell groceries. The company launched Amazon Fresh in 2007 but it hasn’t done well, only accounting for 0.8% of worldwide grocery purchases.
Some radical changes are in store at Whole Foods under this new ownership. Whole Foods store-brand products will be available to order through Amazon for delivery. Ideally, the stores will not have cashiers and purchases will be rung automatically through an app instead. Amazon Prime will become the new Whole Foods rewards program, giving half of American households even more savings and other in-store benefits. Amazon plans to add Amazon Lockers inside the stores where customers can pick up online orders and make returns. The stores will essentially become Amazon distribution centers, creating a need for more workers. Nothing, however, will change internally at Whole Foods. It will keep its current brand, the company will remain headquartered in Austin, Texas, and its co-founder John Mackey will still be the CEO.
“It’s been our mission for 39 years at Whole Foods Market to bring the highest quality food to our customers,” Mackey said, “As part of our commitment to quality, we’ll continue to expand our efforts to support and promote local products and suppliers. We can’t wait to start showing customers what’s possible when Whole Foods Market and Amazon innovate together.”