How Will Things Change For Shoppers After Amazon Buys Whole Foods?
RACHEL MARTIN: Amazon recently announced its plan to buy Whole Foods, giving the web giant a physical presence in nearly 450 locations across the country. The big question, though, is how are things going to change for everyday shoppers now that a technology company is taking over? Here's NPR's Jacob Margolis.
JACOB MARGOLIS, BYLINE: The grocery business is still figuring out how to use tech to make shopping more convenient for everyone. But the question is, will that process accelerate now that Amazon, a tech company, has moved to acquire Whole Foods? Both companies, by the way, are supporters of NPR.
EUGENIA BERCHENKO: I come here to get this. I cannot get it anywhere else.
MARGOLIS: What is it?
BERCHENKO: It's a - sheep milk yogurt.
MARGOLIS: Eugenia Berchenko just walked out of a Whole Foods in Los Angeles, irritated that she had to go to the store just to pick up one thing.
BERCHENKO: So I have to make a special trip to, you know - to buy this. I would love to get it just on my phone.
MARGOLIS: The obvious way that Amazon could make grocery shopping more convenient for some people is through improving online delivery. And Amazon has a lot of experience with that.
BRENDAN WITCHER: The ultimate way of grocery shopping would be saying - Alexa, send me my grocery list, add garlic, remove tomatoes. And that's your entire weekly shopping right there - done.
MARGOLIS: Describing Eugenia's dream is Brendan Witcher with Forrester Research. Amazon's been delivering groceries in some markets for about 10 years, but they haven't exactly upended the industry. Groceries are hard. The margins are small, and the goods are highly perishable. Analysts say that the near 450 Whole Foods brick-and-mortar locations could help streamline the process and help Amazon with speed and freshness.
KURT JETTA: There's no evidence to suggest they'll even be successful, much less dominate.
MARGOLIS: Kurt Jetta with TABS Analytics is skeptical that Amazon will have a big impact on the grocery industry. He says only a small portion of shoppers, mostly the wealthier ones, actually buy their groceries online right now. So there's a limited market for what Amazon wants to do. And there's another thing. People like to touch.
MICHAEL HEALY: I actually like going to the grocery store.
MARGOLIS: That's Michael Healy at the same Whole Foods in Los Angeles.
HEALY: It's a good opportunity to get out of the house and stretch the legs and, you know - I like - I'm a very visual person, so I have to look around and see everything I'm looking at.
MARGOLIS: People like to know what they're buying. And the majority of them still do that in the store, an experience that could change as well. For Whole Foods shoppers, that could mean lower competitive prices, something that Amazon's done when it's entered other industries. But it could also mean more tech at the shelf level, kind of like what they've implemented at a concept store in Seattle. That's according to Bob Hetu with Gartner.
BOB HETU: There is a technology that enables the awareness that a product has been removed from the shelf, and added to the customer's basket or returned to the shelf.
MARGOLIS: At that same store, Amazon's been testing tech that automatically charges people for goods when they walk out, tech that the company has struggled with but that it says it has no plans to implement. However, it gives you an idea of where they could go. Another thing - if you've ever used Amazon before, you've experienced their recommendation engine. Imagine that in the context of groceries.
HETU: If they look at a Whole Foods purchase history and see produce, kombucha and an online purchase history that includes yoga mats and fitness accessories...
MARGOLIS: Then it's possible that they could build a profile of you where they would recommend things like health-related coupons or items, says Ryne Misso with Market Track.
RYNE MISSO: It's almost as if they are providing you what you need before you even know you need it.
MARGOLIS: What tech will be used and how it'll work is unclear. The deal hasn't even been finalized. But other companies like Walmart are working on their own services in the space as well, signaling that Amazon won't be the only one trying to bring in tech-inclined consumers. Jacob Margolis, NPR News, Los Angeles.
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