We had a feeling this was coming. When Amazon bought Whole Foods in June for $13.7 billion, we couldn’t help but wonder if Amazon would allow Whole Foods to continue charging their famously high prices. Amazon’s become the behemoth it is today using low prices and convenience, after all. Turns out not only will Amazon be lowering prices, they won’t be wasting any time in doing it.
The two companies announced this week that the proposed acquisition has been approved by shareholders and has cleared regulatory hurdles, clearing the path for the sale to close next Monday. More importantly, the two companies announced lower prices effective next Monday. And yes, they called out avocados in particular.
Here’s the good stuff: the joint press release states, “Customers will enjoy lower prices on products like Whole Trade bananas, organic avocados, organic large brown eggs, organic responsibly-farmed salmon and tilapia, organic baby kale and baby lettuce, animal-welfare-rated 85% lean ground beef, creamy and crunchy almond butter, organic Gala and Fuji apples, organic rotisserie chicken, 365 Everyday Value organic butter, and much more.” Basically, everything you hated buying at Whole Foods because you knew you couldn’t really afford it is now coming down in price.
Here’s something else that won’t surprise you — Amazon is just getting started. They plan to implement Amazon Prime as a sort of rewards program, in what could end up being something vaguely like a Costco membership. That won’t happen immediately, but it’ll be one of the first Whole Foods projects Amazon starts working on. You’ll also start seeing Amazon Lockers appear in Whole Foods locations, allowing you to have packages shipped there for more secure pickup. On top of that, Amazon will start selling Whole Foods through all of Amazon’s online retail options, including Prime Now and Prime Pantry.
Where will it go from there? We’d look to what Amazon proposed last year. The Amazon Go store concept featured shelves stocked with items bearing electronic tags — customers could simply walk in, log in with a tap of the their phone at the entrance, grab items from shelves, and walk out. There are some enormous implications there — not only would the stores require no (or very few) employees, they would use sensors to see which items customers consider for a long time and choose not to buy, and which they ignore altogether. That information can be used to adjust prices or ditch products in a more efficient manner.
We mentioned that Amazon would have a lot of kinks to work out before that concept could become reality. Apparently, there were even more kinks than we thought — the first Amazon Go location was supposed to open in Seattle earlier this year, but has since been delayed. Still, if Amazon does manage to figure it out — and far be it from us to suggest they can’t — that model could end up being the future of Whole Foods.
Via Business Insider