Day 1 of Whole Foods Market being part of Amazon has officially begun. Whatever you imagined would happen probably pales to the reality in which Amazon is already selling Echo speakers at Whole Foods.
In a useful on-the-ground summary of further impact, Bloomberg reports: Amazon Cuts Whole Foods Prices as Much as 43% on First Day. “At the store on East 57th Street in Manhattan, organic fuji apples were marked down to $1.99 a pound from $3.49 a pound; organic avocados went to $1.99 each from $2.79; organic rotisserie chicken fell to $9.99 each from $13.99, and the price of some bananas was slashed to 49 cents per pound from 79 cents.
New Food Competition
And that’s not all! If you have a grocery store, online food business, or a natural food brand, it’s worth re-looking at your short and long term business plans — also taking into account:
- Brandless (the well-funded private label food and dry goods e-store where everything is $3) and other upstart competition.
- New initiatives by Walmart and Google, and other food sellers and distributors, in response to the Amazon deal.
Questions to Ask
- Think about how to increase affinity for your brand. What can you do that Amazon can’t do, whether online or with brick-and-mortar stores — not forgetting their integration of Prime with these stores.
- Decide whether to keep going, pivot, or even quit…such as if you (Who knew You’ve Got Mail, about an indi bookstore’s competition with a soulless bookstore, would one day apply to indi grocers….and an online bookstore.)
- Have you looked into selling your food on Amazon? Perhaps this is the in to Whole Foods that you’ve been wanting.
- Explore co-optition with other local stores and brands to increase buying, making, and distribution power.
- Survey customers to discover what they love and don’t love about your offerings.
Keep your head up with an eye on what’s going on as the landscape is changing daily!
If you have not read about the Amazon deal, check out these articles — taking into account that both came out before the Amazon deal was done:
Amazon’s big, fresh deal with Whole Foods (Economist)
“Buying Whole Foods hardly gives Amazon a stranglehold on food and drink: the combined companies will account for just 1.4% of America’s grocery market, according to GlobalData, a research firm.”
While I might say co-packers stand to win on all these private label initiatives, with prices being driven lower, it’s hard to say who will come out on top…other than price-sensitive consumers. Here are five potential impacts of the Amazon-Whole Foods deal from Supermarket News.