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Amazon's First Prime Day with Whole Foods Marks New Retail Era

Nimah Quadri
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In celebration of Amazon's AMZN Prime Day coming up, for the first time Prime members will be able to earn up to $30 in free cash when they shop at Whole Foods this week. Customers can look forward to a package of deals, which will not only advertise Prime Day, but also increase sales and traffic at Whole Foods.

Since the day Whole Foods was bought by Amazon, there have been a number of changes for the better. According to CNN, the company cut prices by as much as 50%, added the feature of free two-hour delivery with Prime Now, and started including a variety of Prime-exclusive deals. This all happened within the past year, and Amazon is still finding ways to grow through Whole Foods.

Since this is the first year Amazon is incorporating Whole Foods into its Prime Day, Prime members have the added benefit of shopping at Whole Foods with extra deals. Currently, Amazon is offering three deals for those members who shop at Whole Foods from July 11 through July 17. These deals include receiving $10 in Amazon cash if you spend $10 at Whole Foods, receiving $20 in Whole Foods cash, and getting  10% back for any Amazon Prime Rewards Visa card members.

What Prime Day Means for Whole Foods & Amazon

Although this is something new for both Amazon and Whole Foods, it is a clever initiative to attract new Prime members.  Currently, Whole Foods has 467 stores in the US, which accounts for about 2% of the country’s grocery sales; however, this number could go up thanks to Amazon.  

If Amazon keeps up with its small initiatives like this one, it could help drive higher sales at Whole Foods. According to analyst Michael Pachter, Amazon has a relationship with about 60 million households in the US, and these people are big consumers—hence, Amazon’s effort to drive that traffic to physical stores with Prime Day.

Our consensus estimate for Amazon's physical store revenue, which is mostly made up of Whole Foods, sits at $4.3 billion for the June quarter. If Amazon can beat those expectations and carry that momentum into the Prime Day quarter, investors could be impressed.

Plus, if these deals at Whole Foods turn out to be successful, Amazon could potentially make this an ongoing initiative.  As a means of promotion, Whole Foods has also made a separate page on its website dedicated to Prime Day. On the page you can find all the deals, as well as a featured list for many of the discounted products that will be available to Prime members this week.

Future of Amazon

Amazon’s main goal is to attract and lure in as many customers to become Prime members and eventually make Whole Foods their go-to grocery store. Amazon’s continued success with Whole Foods thus far could only mean well for their future, and the new Prime Day initiatives are just one example of that.

Currently, AMZN is a Zacks Rank #3 (Hold), with a VGM score of ‘D’.

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