June 22, 2017

by Jacob Ritter

In a press release that was announced earlier this June, Amazon is officially buying Whole Foods Market for $13.7 billion plus its debt. This is one of the most outstanding strategic plays that has occurred by the e-commerce giant and they will only get more competitive from this point moving forward.

What could this new acquisition mean for other companies in both the grocer and e-commerce industries?

  • Walmart has a lot to fear with Amazon still dominating the e-commerce domain, even though they are trying to gain a stronger foothold in that market
  • Other companies will need to rethink their “consumer-stay-at-home” approach since delivery of both food and other goods to buyers’ home will only increase as time goes on

Ever since Walmart tried to take over Amazon’s e-commerce market by offering free, two-day shipping on orders over $35 (without any membership), Amazon needed to find a way to ensure they remained competitive in the industry. This new acquisition is aimed at doing what Walmart does, but better. Walmart has long been known as “the place you go to buy anything and everything”. From Xbox’s to eggs to dog food, Walmart is one of the best places to one-stop shop and Amazon is trying to beat them at their own game.

“A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well.”

— John Bezos

Some interesting things that could occur with the new merger is that Amazon Prime members could get discounts on Whole Foods items, and Whole Foods may contain more than just food. They may become brick-and-mortar locations and/or storage warehouses for Amazon to store AND sell their products (which may mean Utah residents and others could get the same-day shipping feature that the residents of Seattle have the luxury to enjoy).

So what do you think? Do you think this new merger is going to benefit you in your daily life by making one-stop shopping more accessible and more affordable? Will Amazon recreate the future of grocery stores and what consumers expect to see from other companies (such as exclusive online membership deals like PrimeMusic and PrimeVideo)? Will this break their company if Walmart can outperform them or will this new acquisition break Walmart? There are a lot of crazy possibilities to consider, but only time will truly tell what the addition of Whole Foods Market will have in store for the future of Amazon and its competitors!