2017Issue5_Alabama_v6

IT COULD BE A “GAME CHANGER” OR A “MASSIVE DISRUPTION” AND EVEN “CATACLYSMIC” . BUT WHEN INDUSTRY PUNDITS ARE ASKED ABOUT THE OVERALL IMPACT OF AMAZON’S ACQUISITION OF WHOLE FOODS, THE BASIC ANSWER IS “GOOD QUESTION!”

Continued on page 40 ▶ linear and incremental. That’s not the way Amazon thinks.” By and large retailers are not reinventing the way people buy groceries, he said, noting that it leaves them vulnerable to the kind of disruption that Amazon can generate. For Whole Foods, generally perceived as the gold standard in healthy eating, Amazon’s distribution efficiencies may be a way to increase sales across more demographics, and beat back competitors who have captured a bigger piece of the organic pie. Still unclear is what the reaction of the industry at large will be to this new entity and whether marketing, merchandising and expansion plans will remain relevant in what is clearly a new world order for supermarkets. “I’d like to say I’m seeing amazing reinvention taking place. But the truth is it hasn’t,” said Doug Stephens of Toronto-based Retail Prophet. “Right now innovation in grocery is largely window dressing. Chains are making stores look better, making food fresher and becoming more competitive on price. But all of these things are

The $13.7 billion purchase by the dominator of digital retailing gives Amazon a valuable imprint in the brick and mortar world – a foothold it will use to broaden sales of food and non-food products and to expand its already extensive, but costly, distribution system. The company recently announced the first in a series of steps that would validate the industry’s concerns, including lowering prices on staples like organic bananas, farm-raised salmon, brown eggs and ground beef. "We’re determined to make healthy and organic food affordable for everyone," Jeff Wilke, CEO of Amazon Worldwide Consumer. More prices will be lowered as Amazon completes the integration of Whole Foods, he added. As expected the company is also making its 365 private label available on its digital network including Amazon.com, Amazon Prime, loyalty programs which includes some 25 percent of U.S. consumers, Amazon Fresh and Prime Now, In order to facilitate the Amazon Prime loyalty program, the company will expand its click and collect model with Amazon lockers in Whole Foods stores.

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ALABAMA GROCER |