Is Amazon Proving to be the Wake Up Call Grocers Needed? Here are the Results So Far

It has been just over a year since Amazon acquired Whole Foods for $13.7 billion. The changes were almost immediate, both inside the store, and in the grocery industry. The look of the retail locations began to change right away, with new products available in-store, including items like Amazon devices, and with signage for Amazon Prime deals.

In addition, the retailer cut prices right away and has promised more reductions this November. There has also been a push by the newly owned Whole Foods for new brands coming in nationally instead of the local reliance of the company before the acquisition. In the industry at large, experts agree that the transaction was a wake-up call for grocers everywhere.

In response, grocery store chains have slowed their new store development and instead given more energy to acquiring new technology and/or platforms, as illustrated by Wal-Mart’s purchase of Flipkart and Target’s purchase of Shipt, to name two of the most prominent retailers.

In February, Amazon began testing a grocery delivery program through Whole Foods to four American cities with plans to expand. And more recently, Amazon has begun a new curbside pickup program for Prime Members at some Whole Foods locations. While it is too soon to tell what the long-term impact will be, a recent study by IRI revealed some interesting consumer attitudes.

The survey revealed that 15 percent of shoppers said they are shopping more at the store because of the acquisition, and 61 percent of Whole Foods customers who are also Prime members said that the free delivery options would increase their buying. It added that 71 percent are more satisfied with their shopping experiences and stated they are more likely to keep shopping there as a result. And the number of Prime memberships has risen, possibly in part because of the merger.

Amazon CEO Jeff Bezos claims that the company added more new members in 2017 than in any previous year and more new members on Prime Day 2018 than any other single day since the program began.

Sources:

https://www.cnbc.com/video/2018/06/15/amazon-whole-foods-deal-grocery-anniversary.html

https://progressivegrocer.com/amazon-whole-foods-1-year-later-4-grocery-experts-share-their-insights

https://www.produceretailer.com/article/news-article/irresistible-appeal-prime-study-reveals-amazons-influence-whole-foods-shoppers

https://www.businessinsider.com/amazon-changes-whole-foods-2017-9#amazon-credit-card-holders-now-get-5-cash-back-at-whole-foods-2

https://www.usatoday.com/story/tech/talkingtech/2018/08/08/amazon-starts-new-curbside-pickup-service-whole-foods/926488002/

https://money.cnn.com/2018/04/18/technology/amazon-100-million-prime-members/index.html

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