5 Powerful Outcomes of Massive Amazon Whole Foods Deal

By Dave Sutton


Ready to have your granola and freshly-ground coffee gently placed at your doorstep by a drone? That dream may have become one step closer. The recent announcement of Whole Foods’ acquisition by Amazon has come at a surprise to many but it’s a perfect fit for Amazon. Here are 5 things you probably didn’t know about the Amazon/Whole Foods acquisition.

1. Amazon’s Whole Foods deal could spark bidding war

Although outlets are reporting this as a done deal, the $13.7 Billion Amazon/Whole Foods acquisition isn’t finalized. In fact, this may be the beginning of a large bidding war for the Whole Foods brand. Other possible acquirers include Kroger, Target, or Sprouts. As I shared with Fox Business last week, “Each would have different reasons, all would rather not see Amazon have it.”

“Someone like Sprouts might see this as a way to leapfrog and take its brand to the next level by leveraging goodwill from the Whole Foods brand, which has been the category captain in this higher end, fresh, quality end of the grocery sector.”
Amazon’s Whole Foods deal could spark bidding war, Fox Business

The industry is already feeling the effects of the possible merger. After the acquisition announcement, stocks for traditional grocery chains dropped 10 percent in pre-opening trading. If a bidding war escalates, the final sale of Whole Foods could end up being a tremendous amount of money. Whole Foods would be Amazon’s largest acquisition to date, so it’s entirely possible that we end up with a different acquirer.

2. Grocery delivery becomes a reality

Though drone delivery continues to be unlikely in the short-term due to FAA regulations in the U.S., that doesn’t mean we won’t see it develop rapidly alongside traditional home delivery in the next few years. Grocery delivery has always been a problematic industry, from its inception with WebVan at the dawn of the internet to more recent entrants like Instacart and Shipt. So far, the convenience, limited selection, and affordability haven’t been enough for home delivery to achieve mass-market breakout velocity, but this could change. Whole Foods will add a massive network of locations around the U.S. to Amazon’s already extensive network of distribution centers, allowing the company to make grocery delivery available to more than a few niche cities. With Whole Foods under its ownership, Amazon will also have an established customer base with potential for sustained demand for home delivery of perishable goods, something that was lacking for Amazon Fresh when it first launched.

3. Amazon Go technology expands rapidly

Amazon Go’s “Walkout Technology” enables someone to walk into the grocery store, grab their groceries, and walk-out without the hassle of checkout lines. Understanding buying habits of individual consumers to provide more personalized marketing has been a challenge for grocery stores and retailers for years. Amazon Go solves this problem with an analytics-first approach to the in-store customer experience. Not only does this fuel individualized Go to the full article.

Source:: Business 2 Community

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