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How Amazon could soon transform Whole Foods stores


Amazon, the big scary e-commerce giant blamed for killing so many brick-and-mortar businesses, has quietly established a sizable portfolio of brick-and-mortar locations.

Amazon now has 18 physical bookstores, 10 cashierless Amazon Go stores, three Amazon 4-Star stores, and nearly 100 “Pop-Ups,” mostly inside malls and Kohl’s stores. Of course, add to all that the nearly 500 Whole Foods stores Amazon acquired in 2017.

Amazon has already changed Whole Foods in a number of subtle ways—so what might it do next?

Tom Forte, an analyst with D.A. Davidson, has one theory. “I’m of the belief that five years from now, when you enter Whole Foods,” he said on Yahoo Finance’s live show On The Move, “there could be a pharmacy; they could devote the portion of Whole Foods today where you get prepared foods to leveraging the Amazon Go cashierless checkout; and increasingly they can deliver from the store.”

FILE - In this Jan. 22, 2018, file photo, workers as seen from a sidewalk window as they assemble sandwiches in an Amazon Go store in Seattle. A key executive behind Amazon Go, the online leader’s much heralded cashier-less grocery store, says she was surprised how many customers were hesitant to just walk out the store. (AP Photo/Elaine Thompson, File)
Workers, seen from outside, assemble sandwiches in an Amazon Go store in Seattle on Jan. 22, 2018. (AP/Elaine Thompson)

Indeed, it’s easy to imagine a time when Whole Foods stores showcase a little bit of everything Amazon is doing: cashierless Amazon Go convenience areas inside the larger markets; Amazon Lockers for pickup (which have already popped up in many Whole Foods locations); a dedicated section for Amazon electronic devices in each store; and even a pharmacy counter, after Amazon recently spent $1 billion to acquire PillPack.

We already know that Amazon wants to aggressively open more Whole Foods stores, and is eyeing closed Sears locations for that purpose, as first reported by Yahoo Finance.

We also know that Amazon’s macro effort is to speed up its shipping times even more, and that it can use all of its physical locations as logistical hubs to help do that. In fact, all of Amazon’s different types of stores look a little bit like each other. (In any Amazon physical bookstore, you’ll see a lot of products that aren’t books; in many Whole Foods stores, you can now buy Amazon Echo speakers.)

As Tiffani Bova, an innovation evangelist at Salesforce, remarked on Twitter this week about Amazon eyeing closed Sears locations: “Why would Amazon want the real estate? Logistics over retail space; get closer to customer; accelerate supply chain (Prime/Go/Fresh); data centers.”

Graphic by David Foster/Yahoo Finance
Graphic by David Foster/Yahoo Finance

And as Amazon gradually expands its physical footprint, Forte has another bold suggestion: Amazon should open gas stations, he says.

“If Amazon really wanted to make a splash, they could add 1,000-plus gas stations,” Forte says. “It could be a sales lift for Amazon—look at Costco, 10% of their sales come from gas.”

Daniel Roberts is a senior writer at Yahoo Finance and closely covers Amazon. Follow him on Twitter at @readDanwrite.

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