MAKING WHOLE FOODS AND AMAZON TRULY WHOLE? FOLLOW THE DATA

Written by: Rami Odeh

 

When you work for Amazon, you rely on two decision-making maxims for everything you do.

First, you must test and gather data.

Second, you must make decisions based on that data.

With the recent announcement that Amazon will expand Whole Foods reach and create new locations, Amazon’s leadership followed this model to a tee.

This is a decision based on what the data was telling people, and people are saying that they want more touchpoints for Whole Foods’ products.  Recently, I wrote an article for Love of Retail  highlighting how predictive artificial intelligence (AI) can impact manufacturers and brands.  Here is a great example of how the data and AI are coming together to create a solution that benefits so many stakeholders.

Amazon and Whole Foods are creating greater access for products sold in the stores.  By having more physical locations, it entrenches more locations for Prime Now customers to get products delivered when and where they want it. But the VELOCITY team sees other opportunities.

Amazon is using the data to solve for supply chain efficiencies on the back end through their confidence in their data. Amazon did not specifically reduce the number of options the customer has, but it is reducing the number of vendors providing those options.

What’s more, this “clean-up in Aisle 7” is a signal that something bigger could be in store (pun intended).  something very different is on the horizon.

At VELOCITY, we believe that the level of efficiency that Amazon is creating on a cost and logistical level indicates that it is paving the way for next-level of ordering, utilizing predictive analytics.  Amazon is going to focus on efficiencies and create an unmatched customer fulfillment model, which in turn will provide savings and convenience to the customers never before seen  in the grocery category.

Although this will seem very new, we’re confident that when managed properly, and mirroring the clear methods that have worked for success on Amazon’s platform in the past, brands and manufacturers have a once-in-a-lifetime opportunity to create a bold brand presence within Amazon’s new system, and dominate market share within their categories.

Reach out to us with any questions on how to be prepared for the coming changes. Let us know on Twitter…or send an email to either Rami Odeh or Christa Klausner.

Amazon Acquires Whole Foods…. Now What?

Amazon announced that it is acquiring Whole Foods. The impact of this purchase is far reaching for retailers, grocers and brands. As marketers, we need to understand what this shift means to the retail landscape and to shopper expectations. Given this news, TPN’s Digital Commerce team has developed thoughts on what happens now and what to do.

WHAT TO EXPECT

Amazon is going to get smart on grocery.
Whole Foods gives Amazon the ability to leverage its knowledge within the grocery channel and a better understanding of how to source local and organic foods.

Amazon will integrate its features at Whole Foods.
Expect Whole Foods to integrate the ability to make transactions through a Prime account similar to the Amazon Go grocery model – making for faster, more seamless experiences.

AmazonFresh will grow.
Whole Foods locations will enable AmazonFresh to take food delivery to the next level, with faster, fresher deliveries taking place in a truly on-demand model.

Prices at Whole Foods will drop.
Many expect this merger will make Whole Foods more affordable. That said, it’s fair to expect prices at grocery stores to drop altogether.

HOW TO PREPARE

Get to Know Amazon.
If food brands haven’t already, it’s crucially important to build relationships with Amazon, get familiar with their ecosystem, and start understanding its numerous paths to purchase.

Get to Know the Amazon shopper.
As stated in TPN’s Shopping in the Flow report from 2016, the retail purchase funnel is gone, and the buy is happening outside of physical stores through mobile devices and other in-home technology like Amazon Alexa. Brands must move to where these purchase take place… before it’s too late.

Don’t wait. It’s happening.
Amazon isn’t waiting for anyone in its efforts to extend its reach across the retail landscape. Getting familiar with the retailer today can only fuel a brand’s success for inevitable retail changes in the future.

SO WHAT’S NEXT?

More change is coming. While Amazon will continue to grow and extend its giant reach across the retail landscape, expect other heavy hitters – like Walmart, Target, and Kroger – to step up to the plate, find ways to evolve, and introduce their own retail innovations.

These are exciting times, and it’s just the beginning. While much of what this merger means is still very much unknown, one thing is certain: More change is coming.

At TPN, we’re ready for it.

Author: Rami Odeh | Digital Commerce Director | rami_odeh@tpnretail.com