The last time you found yourself spending your precious time standing in the maddening line at the grocery store did you catch yourself dreaming of a solution? If so, Amazon may have found one for you. On June 16th the e-commerce giant announced it plans to acquire Whole Foods for $13.7 billion, valued at $42 a share. What does this mean for Amazon CEO, Jeff Bezos? Ring him up in aisle number two. Bezos could make enough to rank as the second-richest man in the world behind Bill Gates. The announcement ushered in the shock felt around the brick-and-mortar retail world.
Now that the cat is out of the grocery bag everyone wants to know if Amazon took a good, or bad bite, out of this acquisition. Many who believe that this match is too good to be true took to Twitter to joke about the obvious mismatch.
Amazon buys Whole Foods for 13.7 billion, roughly equivalent to 11 shopping bags of their organic berries.
— Warren Leight (@warrenleightTV) June 16, 2017
Amazon, while being a highly innovative, tech-savvy, and efficient company with a strong online presence also has an apparent impersonal relationship with consumers. As for Whole Foods, the company has positioned itself in the marketplace as a company committed to providing high-quality food, brand value, and a remarkable in-store experience. These stark differences have some questioning if the two can overcome their marketplace position mismatch and come out on top.
In contrast, others see the potential for a seat at the table of the retail food industry for Amazon. Proponents argue that it may be a case of opposites attracting. Amazon first attempted to build a presence in the retail food industry with the launch of AmazonFresh nearly a year ago but struggled as the service required customers to upgrade their Prime subscription to a Prime Fresh membership, which cost $299 annually. The new partnership will help Amazon gain the missing elements, such as physical real estate and a higher level of personal customer service.
Known for their high-quality organic foods, Whole Foods, is infamous for wearing a hefty price tag. Amazon could provide the company with a strong online brand presence, innovative social media marketing techniques, and competitive pricing strategies for the modest shopper. Amazon is consistently successful at attracting consumers to the digital market by keeping them in an engaging, and accessible online purchasing loop. After all, Amazon’s overall goal may be less complicated and risky than some opponents think. Amazon plans to ease into the uncharted water slowly by continuing to drive sales through social media to engage with consumers and make it easy for them to purchase new products. Another factor that could bring in the big bucks for the company is the added benefits to their data department. The company can track additional information on consumer purchasing habits, gaining an edge against competitors by analyzing and collecting new data on their customer’s food shopping tendencies.
Has Amazon’s shopping cart checked out with a key to unlock the future of retail shopping, or a mismatch that could keep them locked out? Let us know in the comments!
