Now that Amazon has acquired Whole Foods, experts are
expecting another wave of consolidations as other grocery giants such as
Walmart, Kroger’s, Target, and Sprout’s are facing the pressure of competition
from Amazon’s growing dominance in the grocery space.
Last year, Amazon increased its ad spend by 30%, and the
Whole Foods deal will add a competitive advantage with a brick and mortar
presence. The influence of Amazon in brick and mortar will be an interesting
trend to watch. This is pure speculation, but digital innovations
with Amazon Go could be implemented in Whole Foods or other future brick and
mortar acquisitions. Whole Foods is primarily located among
affluent populations in high income, high density, high education metro areas,
where the customers are often cash-rich and time-poor. Amazon Go fulfills the
need for convenience. Using the same technology as driverless cars, it allows
customers to swipe on the Amazon app, take what they want from shelves and walk
out without inconvenient check-out lines or register hassles.
Amazon can acquire higher quality first-party data, and gain
a competitive advantage among other retail giants by integrating their online
shopping platform with the brick and mortar experience. It will be interesting to see how other retailers respond to the growing threat of Amazon's grocery expansion.
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