The acquisition allows Amazon instant access to more than 400 prime physical locations, putting them firmly in the brick-and-mortar world. Beyond grocery, it positions the digital giant to further expand their already superior fulfillment and distribution network across a myriad of categories that remain to be discovered. Most importantly, it means a direct line to millions of affluent and loyal shoppers, not to mention a whole new brick-and-mortar dimension for those 64% of US households with an Amazon Prime membership.
What does this mean for grocery
While Amazon’s tender for Whole Foods is mainly a battle between two giants, this move is a game-changer for the whole industry, guaranteed to affect every player in grocery retail. Most importantly, it means your digital capabilities and services will now be compared to Amazon, rather than just those of your local physical competitors.
Amazon has already set the standard for free shipping and rapid delivery times, and will likely continue to raise the bar for grocery delivery, and eventually, unified commerce pickup options. The new physical stores combined with their existing logistics network will extend their inventory capabilities to close proximity of majority of US consumers.
While building a digital presence has been in your game plan for some time, the time to move is now. We have entered a period of disrupt or be disrupted, where shoppers must be engaged in a whole new way to compete, stay relevant and win. Luckily you have important assets to make this happen.
- Time. The transformation will not be easy for Amazon: turning physical locations into multi-category distributions centers will not happen overnight. It will require a lot of hiring, technology systems, store layouts and logistics. This means you still have time to enhance your unified commerce strategy and approach.
- Your customers. Your customers know your store, they trust your brand and there is a reason they’ve been keeping coming back. You have a huge opportunity to use this relationship as an advantage while growing into the digital world. Differentiating yourself from Amazon by executing unified shopping strategies quickly and efficiently to keep up with customer demand will be your winning strategy. Put your customers in the center of everything you do by offering personalized, immersive experiences that will keep them coming back. Consumers use web, mobile and stores throughout their shopping journey – make sure you’re able to connect with them via all of these channels.
- Your physical stores. Amazon’s purchase of Whole Foods is a clear admission that they haven’t quite solved the grocery problem AND that they need physical stores to do it. Amazon is only starting to invest in physical stores, something you have already established. You have the location, storage, selection and resources in place and it is up to you to leverage these assets in your digital strategy.
- Your size. Only about one third of the total grocery market is served by the largest Grocers. That leaves plenty of operating room for the rest. Critical to success is choosing an online platform that provides state-of-the-art services that will help the retailer keep pace with fast moving technology innovation. Smart retailers will leverage online capabilities to retain their role in the community by bringing local and regional products into the digital marketplace.
Customers really want the convenience that a state-of-the-art digital platform delivers – combined with the benefits of local customer relationships and service. Contact us a Digital Foodie to hear how you can provide both.