Amazon CEO Jeff Bezos’ announcement to acquire Whole Foods last week sent shock waves throughout Wall Street and grocery giants like Target, Walmart, and Costco saw their stock prices plummet. Amazon’s acquisition will undoubtedly bring online grocery shopping to Whole Foods and thus gives Whole Foods a competitive advantage over its competitors. This could lead to a further digitization of the grocery industry, as other grocery retailers are likely to scramble to adopt online shopping platforms to keep up with Whole Foods.
How will this shake up change the grocery industry?
Amazon’s acquisition of Whole Foods will potentially make the shopping experience at Whole Foods more cost efficient. Online shopping allows for easier price comparison allowing shoppers to know for certain if they really did get the best deal. As grocers begin to copy Amazon/Whole Foods by adding online shopping platforms, shoppers will be able to get more bang for their buck no matter the store they shop at. Amazon’s acquisition of Whole Foods will create a significant competitive advantage for them, and as others eventually copy them, the shopping experience across the entire industry will be greatly improved.
Many are unsure of Bezos’ endgame. Many believe that the $13.7 billion acquisition is Amazon’s attempt to simply expand into home delivery of groceries. Others see it as an attempt to reduce the delivery expenses of its products by having customers actually walk into its stores and physically purchase products. One thing is for certain, according to the Chicago Tribune, the acquisition will give Amazon a treasure trove of consumer behavior information that they can use in its future endeavors.