Categories Retail

A year into Amazon-Whole Foods deal, market equation remains unmoved

We have seen how Amazon (AMZN) made a lasting impact on the retail landscape – first through its breakthough e-commerce platform, and then with the Whole Foods acquisition. By expanding its offers and discounts to Whole Foods, Amazon is now looking to further strengthen its dominance in the industry. Let’s take a look at how this deadly combo is affecting the equation in the grocery market.

Only a few days back, Amazon had announced that it is bringing its Whole Foods discounts for Prime members to ten more states including Kansas, Oklahoma and Utah. The benefits, which include a 10% discount on sale items, will now be available across half of the US.

Amazon announced its acquisition of Whole Foods at around this time a year ago. Following the completion of the deal in August, Amazon has handed out several discounts and deals to customers along with speedy delivery options. However, on a closer inspection, the combined entity has so far not been able to make ripples as was expected earlier.

Let’s not forget, this was a deal that shook up the entire food and retail industry. Anybody that had anything to do with the grocery business had panic attacks. As for Amazon’s rivals, they started scrambling for profitable acquisitions and favorable partnerships to strengthen their position against the mammoth-in-making.

Amazon and Whole Foods together have multiple order, pickup and delivery options ranging from AmazonFresh to Amazon Pantry

Walmart (WMT), Target (TGT) and Kroger (KR) began focusing more on their online services and started experimenting with different pickup and delivery options. Target’s acquisitions of Shipt delivery service is widely seen as a part of this strategy.

Amazon, meanwhile was looking for more brick-and-mortar presence and considered the Whole Foods acquisition beneficial in this regard. Amazon has some grand plans for its grocery business too, like the cashier-less convenience store, but there are things the company needs to sort out first.

Between the both of them, Amazon and Whole Foods have multiple options for online order, pickup and delivery. These range from AmazonFresh to Amazon Pantry. These services differ not just by state but also by the type of product. The order and delivery options are different for heavy household products and light food and beverage items.

This kind of complexity is hardly appreciated by customers. People want to pay for their products and have them delivered as easily as possible. Amazon is still working on it through this maze. The grocery delivery business is not an easy one, but Amazon is already a leader in ecommerce and is more than capable of figuring out its way in the grocery business too. It just has to eliminate a couple of roadblocks and make things easier for the consumer. Like for every other plan of his, Bezos can count on his investors to back him on this one too.

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