Amazon is in the process of acquiring Whole Foods, a popular supermarket chain in America. The Seattle, Washington-based e-commerce company said on Friday, June 16, that it intends to buy Whole Foods for $13.7 billion, a huge capture of brick-and-mortar stores that could expand Amazon's retail business further.
The acquisition stands as a huge boost for Amazon's strategy to integrate the brick-and-mortar model into its business. For 10 years, the company has offered a type of food delivery service via Fresh, but that simply won't do, it seems.
As Reuters reports, Amazon used "aggressive pricing" to turn itself into a retail juggernaut, noting that the company has recently been experimenting with brick-and-mortar outlets. Whole Foods, a pioneer in natural and organic products, has 456 stores, which young, high-end shoppers flock to. Amazon could integrate it with technological advancements to improve the shopping experience, and, in turn, help Whole Foods rein in revenue.
Amazon Not Planning To Replace Whole Foods Workers
But despite the Whole Foods acquisition and, by extension, the potential technology Amazon could implement in brick-and-mortar outlets, the company said it currently has no plans to automate the jobs of cashiers in Whole Foods stores after the acquisition. So, no — you won't be greeted by robots when you go inside a Whole Foods outlet. What's more, it also isn't planning to lay off employees, according to a spokesperson.
That said, there is some speculation that Amazon could end up changing its plans and ultimately use advanced technology inside Whole Foods stores.
Take Amazon Go, for example, the company's high-end shopping service that allows shoppers to walk in, get whatever stuff they need, and then go — no checkout lines, no cashiers. The service requires an app to be installed before entering the store. Then it uses sensors, computer vision, and deep-learning technology to track shoppers and what items they pick up.
Amazon Go doesn't employ robots to stock shelves — at least not yet. Amazon's warehouses, on the other hand, do use these robots to keep things moving. It's easy to imagine that Amazon might later decide to integrate this technology from its warehouses to its Amazon Go shops, and probably Whole Foods stores, too.
For now, though, Whole Foods cashiers and other employees can take a sigh of relief.
Amazon's Perfect Chance To Expand Its Physical Retail Business
The New York Times says Amazon wants to, or already has created plans to expand its e-commerce business into physical retail. The company is slowly building a fleet of outlets, cementing its supermarket dreams.
Whole Foods, a pioneer in organic products, as mentioned, started its business in 1978 in Austin, Texas, building its brand on healthy eating and fresh, local produce, though often with steep price points. The company, however, has faced fierce competition from neighboring retail chains, particularly Costco, Safeway, and Walmart. These three have begun offering some of what Whole Foods offers, forcing the supermarket chain to cut prices.
Acquiring Whole Foods will provide Amazon more physical locations to experiment with, and eventually expand its retail business.
"They're going to be within an hour or 30 minutes of as many people as possible," said Mikey Vu, from consulting firm Bain & Company.