Amazon bought Whole Foods and is now a brick & mortar retailer. What does this mean for other retailers and what can they do to stay successful?
Amazon has heavily impacted non-food retailers, using e-commerce to exert pressure on traditional retailers, even causing some of them to go out of business. But so far, the impact on the grocery segment has remained small. According to a recent FMI-Nielsen report, 96% of grocery sales today are still through brick & mortar stores. With the acquisition of Whole Foods, Amazon now has the brick & mortar base it needs to integrate both offline and online grocery shopping. Using its technology arsenal, it will steadily increase the online share of grocery sales over time.
Imagine what grocery shopping might look like in three years: You don’t worry about routine items anymore — Amazon knows what you usually buy, and you have a weekly subscription for those items. Everything gets delivered by Amazon Fresh without you having to do anything — unless you find you need more or less of an item.
What if you run out of tomato sauce ahead of schedule? Just tell your Amazon Echo and you’ll get it shipped. Which brand? Whatever you ordered last time, unless you left a bad review, in which case you’ll receive a more popular choice. See another intriguing brand? Just use your Amazon Dash Wand and scan the barcode. It will come in the next delivery from the nearest Whole Foods market. Can’t wait? Get it delivered in an hour or use the click&collect option to have it waiting for you at a nearby Amazon Fresh Pickup location—again, your nearest Whole Foods market — where somebody meets you in the parking lot to put it in your trunk.
What about fresh food? Amazon Fresh has been slow to gain acceptance because shoppers like to pick their own fresh food in stores. But now, a trained employee at Whole Foods picks your fresh produce according to your criteria (size, ripeness etc.), unless you want to go to the store yourself. If you do go to the store, you can focus on specialty items for a specific recipe, selecting the right cut of meat and any fun or discretionary items.
And the specials! Amazon knows what you like, and shows you the most relevant specials without the need to browse a flyer. And because Amazon Go recognizes which products you picked off the shelves, you can put them in your shopping bag and just walk out when you’re done. No more unloading a cart, placing items on belts, waiting in line, rebagging and reloading into your cart.
It is really about providing the shopper maximum convenience by providing online and offline options that the shopper can combine to save time, effort and money.
Amazon might not be there yet — it still has to integrate and optimize its experience — but it’s only a matter of time. No wonder that many retailers, even big ones, are nervous. Some, like Walmart, are buying e-commerce companies to add competing online solutions to their brick & mortar stores. But this is only an option for larger retailers. Some midsize and larger retailers have developed their own mobile apps to provide features such as shopping lists, product information and specials to their customers. These solutions bring retailers closer to what Amazon will be able to offer, but they will fall short of becoming compelling customer experiences unless they can provide:
Larger retailers could develop their own app or build out their existing ones, but this is expensive and especially time consuming. Instead, they could deploy mobile checkout platforms such as FutureProof Retail’s Line Free Checkout.
And smaller retailers? The FutureProof Checkout System works in stores of any size. It arms retailers today with the core features they will need to remain competitive during the digital retail transformation, without high upfront cost for hardware and installation. Retailers don’t have time to wait while their shoppers find more convenient alternatives to traditional shopping — they should grow their loyalty by providing shoppers with a full suite of mobile options available today!