After months of speculation, Amazon.com finally revealed today what its first plans are for post-acquisition Whole Foods Markets, including a laundry list of strategic changes to be rolled out across all Whole Foods stores starting next week. The announcement came one day after Whole Foods shareholders voted to approve the (nearly) $14 Billion (with a B) deal (and the FTC decided not to pursue an investigation into the merger).
The first of such changes, according to BevNet Magazine is that,
...Starting Monday consumers will find lower prices on “best-selling staples” including whole trade organic bananas, responsibly-farmed salmon, organic large brown eggs, almond butter, grass fed beef and 365 Everyday Value organic butter. Whole Foods previously told shareholders that they would lower prices on key items, but those efforts had seen lackluster results. Additionally, a 2018 switch to a global category management system was expected to assist with this goal.
Those short-term ideas however are nowhere near the big deal changes coming as part of the merger. Three big changes are on their way:
- Amazon also announced in a release that Whole Food’s private label 365 brand will soon be available through Amazon.com (and/or "AmazonFresh", "Prime Pantry" and the "Prime Now" programs). The question, of course, is whether Amazon will warehouse and fulfill the 365 Brand product through their own extensive national/international warehouse network and FBA (Fulfillment by Amazon) program, or if orders will, essentially, be drop-shipped from Whole Foods warehouses or markets themselves?
- The second biggest benefit of the deal is that Amazon Prime will essentially become Whole Foods Market’s customer rewards program (beating out the in-house rewards program Whole Foods themselves have been working behind-the-scenes on for months). Prime members, who already pay around $100 a year to enjoy unlimited free shipping and deep discounts, will now receive special savings and in-store benefits at Whole Foods locations, too.
- Lastly, Amazon Lockers will also soon be found in select Whole Foods stores nationally. Allowing Amazon Prime customers to have products they purchased on Amazon.com shipped to their neighborhood Whole Foods Market for pick-up.
What do you foresee the biggest benefits of the merger will be? How will warehousing work? And do you think the real-world blending of eCommerce and brick-and-mortar stores will be good for the economy, bad, or indifferent? Please comment below.