Consumers are hopeful Amazon-Whole Foods merger will lead to better shopping experience
(BI Intelligence)
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Consumers are excited by Amazon’s pending acquisition of Whole Foods, and are hopeful it will improve the grocer’s shopping experience, according to a recent survey of general consumers from ChargeItSpot.
The majority of respondents, 62%, reported they’re more likely to shop at Whole Foods following Amazon’s acquisition, and 84% have positive feelings about the merger. This is a testament to Amazon’s brand, and shows how the merger could provide Whole Foods with a much needed boost as it faces falling sales and growing competition in the organic food space.
Consumers are most excited by the possibility of cashier-free checkouts at Whole Foods, with 31% of all respondents expressing interest. Shoppers are likely hoping for aquick and pain-free shopping experience, but this may be difficult to offer as Amazon’s Go technology has seen delays, and a former Amazon executive suggested that Go may not fit well in full-sized grocery stores. Even if it isn’t through Go technology, shoppers clearly expect Amazon to provide a seamless checkout experience, something it is known foronline.
Shoppers also hope that Amazon will lower Whole Foods’ notoriously high prices,with 30% of respondents seeking cheaper options. Aggressive pricing has been central toAmazon’s ascent, and consumers now expect that to carry over to Whole Foods. The company may find ways to lower prices by optimizing the grocer’s supply chain. Moreover, if it does move forward with cashierless checkout — whether through Go technology, self-checkout terminals, or other means — Amazon could absolve Whole Foods of the highlabor costs that plague the grocery segment. Such savings might be passed on to consumers in the form of more attractive pricing.
However, only 10% of respondents want Amazon to leverage Whole Foods for grocery delivery. This may pose a problem for Amazon as its biggest opportunity in grocery is likely in online delivery — the brick-and-mortar grocery market is populated with very entrenched players, and Whole Foods only has 1% of that market. Many have speculated that Amazon will add Whole Foods’ offerings to its AmazonFresh grocery delivery service, and potentially deliver from Whole Foods locations. If Amazon can leverage Whole Foods to improve its AmazonFresh service, it could potentially dominate the nascent online grocery market, which is forecast to hit $100 billion in 2025. In order to accomplish that, though, the company will need to aggressively market its online grocery offerings to generate more interest among consumers.
Ship-from-store — a fulfillment process where retailers use stock from their store's estate to fulfill orders — can help brick-and-mortars evolve and avoid stagnation. This method is an essential strategy for legacy retailers because it can help them survive digital disruption and remain competitive with e-commerce giants like Amazon.
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