Yesterday, Amazon stunned everyone when it revealed that it had agreed to buy out Whole Foods Market for a monstrous sum of close to $14 billion. This is being viewed as a power move by the e-commerce giant, who is looking to compete against the leading retail chain giant, Wal-Mart.
Several have, however rebuked the over-priced ‘extravagant’ reputation of the organic supermarket chain as not being in line with Amazon’s vision. Whole Foods is known to attract high-income shoppers, who can afford to dole out cash on over-expensive foods and this was the center of all the jokes on Twitter. The other sections, not to demarcate them, are most likely pissed for not having access to the organic and natural products.
The same is, however, expected to change once the acquisition is completed, according to Bloomberg. It has been stated that chief executive Jeff Bezos plans on keeping the extravagant brand image of Whole Foods, for providing premium fresh groceries, intact while slashing down the prices. He plans to streamline the company’s operations, slash down the huge 87,000 headcount and also lower the prices of the complete inventory.
With this strategy, Amazon is planning to make the prices competitive and attract ‘more low- and middle-income shoppers’ to its retail stores, which may still be located in posh localities. Whole Foods was, however, costlier in 1992 as compared to today (keep the times in check) and it has been reducing the prices to keep the sales in check.
The e-commerce giant has made a significant (& its biggest) acquisition and may now be mulling the expansion of its offline grocery delivery and pickup efforts. It has already debuted this service, which enables you to order groceries from anywhere and then pick it up via a drive-through, in Seattle for Amazon Prime members.
Along with the price reduction strategy, an anonymous source suggests that the e-commerce giant may also be looking to extend its cutting-edge machine learning and computer vision technologies to Whole Foods outlets. This means it might have plans to convert some of the total 460+ outlets into ‘Amazon Go‘ self-checkout convenience stores, which allows you to buy the required groceries in a jiffy — without even having to interact with a cashier or pulling out your wallet.
All the aforementioned decisions have been planned to eventually lead Amazon to stand in competition to Wal-Mart. While we’ve already seen that the latter is trying to build its online presence, with the acquisition on Jet.com last year, the former is expanding its roots to the offline market. Wal-Mart is also planning to employ innovative new technologies to upgrade the in-store experience for its customers.