Amazon has Rocked the Healthy Food Marketing World by Acquiring Whole Foods Market
As a Whole Foods Lover, I am actually a little surprised that Amazon only paid $13.7 billion dollars, I feel like I’ve spent that much there! But I couldn’t be happier. I feel like this is exactly the right thing for Whole Foods. And it is clearly a big deal.This acquisition has made the news every day since it was announced. Rocking both the retail and grocery world. Stocks prices at stores like Target, Walmart and Costco fell sharply, as did Kroegers.Mark Hamrick, a Senior Economic Analyst at Bankrate.com, is calling this “an earthquake rattling through the grocery sector as well as the retail world.” - so dramatic!Amazon’s massive success created a path for Amazonfresh to move into Brick & Mortar, so this merger seemed like a natural next step. It’s also brilliant when it comes to taking the risk out of home delivery of produce. Random produce at my doorstep? No thanks. Whole Foods at my doorstep? Yes, please.
Why this Will Have a Happy Ending
I see a long happy marriage ahead, especially as a I learn more about the strategy for this merger. Diana Sheehan, the director of retail insights at Kantar, said that the profile of a Whole Foods Shopper is similar to an Amazon Shopper.Matt Sargent, the senior vice president at Frank Magid and Associates, reported to Food Dive that 28% of Whole Foods shoppers are already shopping Amazon for groceries.Whole Foods stands to gain a tremendous amount from Amazon’s prowess online and in the technology world, while Amazon gets the organic and retail expertise that makes Whole Foods so Irresistible.CEO John Mackey’s take on the merger: “This partnership presents an opportunity to maximize value for Whole Foods Market’s shareholders, while at the same time extending our mission and bringing the highest quality, experience, convenience and innovation to our customers.” This really sounds like a match made in Heaven.Diane Sheehan believes that “Amazon is saying, ‘We’re in it to win it, and we’re going to do whatever we need to do here, and you need to start taking us seriously.'”
Competitor’s Beware!
Scott Galloway, professor of marketing at NYU Stern School of Business, said “this is a frightening day for every retailer that is not Amazon.”This deal has the potential to heighten the already competitive war between Amazon and Walmart. Right now, Walmart is “the top seller of groceries in the U.S. and the world’s largest retailer.” — expect Amazon to try to change that.And with Groceries making up 56% of Walmart's revenue, they could be in some serious trouble.And Target stands to lose a lot as well. Lots of opinions are swirling around, one points out that Target has between 12 and 18 months to refocus its grocery strategy,
How can Marketers Compete with Amazon & Whole Foods?
With stocks already dropping and retailers in an absolute frenzy, marketers are going to have to get pretty innovative.Stay tuned because next week, we’ll release the results of our proprietary I-Factor® study on the the top 7 retail and grocery brands. And guess who’s included? Get ready for scores and consumer insights on Whole Foods, Walmart, Amazon and Target.And if you want to protect your brand and make sure you are truly Irresistible, Contact me to set up a free consultation.