How Amazon Will Drastically Change the Way We Shop for Groceries

How Amazon Will Drastically Change the Way We Shop for Groceries

By: Justin Black

    Overview: 

As you may know, Amazon recently acquired the multi-National Corporation, WholeFoods in a nearly 14 billion dollar acquisition. And as of today August 28, 2017, Amazon has officially begun it's relentless growth into the grocer and produce market. Amazon has already begun to release it's developing business strategy in hopes to not only retain current Whole Food's customers, but additionally break into new market segments with the technological expertise that the company has become extraordinarily praised for. 

    Amazon's Business Strategy:

Amazon is considered to be the world's busiest E-commerce platform today, and currently resides as one of the most successful companies in world history. They have been able to achieve economies of scale so efficiently, that you can purchase nearly any product at a discounted price, and those products can be sent to your front door within hours for free (Depending on your location). Amazon has warehouses filled with so many products and merchandise, that some of their warehouses can be up to 28 times the size of the White House. And in these monstrous Warehouses, they have one of the most efficient models for maintaining inventory, processing products, tracking trends in the market, and ultimately delivering the products to their customer's satisfaction. So with all of this in mind, you can begin to shape your own idea of how the acquisition of Whole Foods will revolutionize the manner in which we buy our food. 

   Amazon and WholeFoods Today:

Now that Amazon has complete control in WholeFoods operations, the E-commerce giant will most likely introduce it's own staple on the grocery industry. Already, we've seen WholeFood's prices on several common goods such as avocados, eggs, fish, beef, and many other products dip in price by nearly 45% in some circumstances. This is in large part due to Amazon's revolutionary ability to obtain and distribute these goods at a low price from it's own suppliers. 

In today's economy where there are so many substitutes in our highly competitive market, many consumers rely on price differentiation to determine where they shop or what brands they buy. Essentially, if Amazon can sustain selling these goods at a discounted price like this, the consumer in America will be incredibly encouraged to shop at their stores. Additionally, with Amazon's E-commerce ability, we will likely see the company introduce ways to shop via the internet. Such programs already exist to some degree in companies like Publix or Kroger, but Amazon has an exceptional ability to get their products to the customers at an advantageous manner. What I mean by this is Amazon has already proposed business strategies for its customers to shop for their groceries at the convenience of their mobile phones or computers. Amazon has approached the problem of retail in a scientific way from day 1. Rather than compete with other retail giants directly, they approach their consumers with affordable pricing due to their supply-side driven cost strategies, coupled with their innovative business proposals. 

   My Personal Expectations:

It's easy to sit here and say that I would expect Amazon and Whole Foods to innovate the grocery industry within the next 10 years. Anyone can blindly assume this and make this claim without merit or pragmatic support. I'm here to explain why I think this acquisition could change our world through thorough research and my own interpretation of whats available today. Along with many others, it's obvious to see why brick and mortar retail stores have been overcome by E-commerce giants such as Amazon or Alibaba. What's particularly interesting to me, is how prominent E-commerce is in our daily lives. However, there's been an exponential increase in Mobile commerce in recent years. Desktop PC use has continued to drop, and comparatively mobile devices are now the most used technological device. With this being said, Amazon has proven to be properly equipped for these technological advances, and they already have their mobile app easily accessible and the interface is easy to use. With convenience in shopping and price differentiation being two of the biggest influences of consumerism today in America, Amazon is poised to continue their dominant expansion of E-commerce into the Grocery segment of the economy. I'm confident that this company will make grocery shopping so easy and cost efficient for it's customers, that the rest of the grocery industry has already begun to panic.