Since Wholefoods Market have been acquired by Amazon, there are some changes that reflects the Amazon strategy in the field of sales. You could buy Amazon Echo from Wholefoods Market store. And you could get the Wholefoods Market products delivery to your home if you are Amazon prime user.
As Amazon’s classic strategy is composed of;
- Customer hooking with low price
- Locking in via getting used to Amazon ecosystem,
- Expand the own private brand products,
the Amazon is doing same things for Wholefoods Market.
It actually went that way. One month after acquisition, Amazon lowered the organic food price as 43% on average. Prior to M&A by Amazon, Wholefoods Market sold its price more that 15% compared with the retail stores in US. Even people were defining the purchase in WholeFoods Market was whole paycheck. With this lowing price strategy by Amazon, the new customer expansion was 17% and 10% customer of Trader Joe moved to the WholeFoods Market.
After hooking up customer with low price, Amazon began its ecosystem locking in program. Customer could buy the WholeFoods Market products from Amazon Fresh. As the synergy, Amazon Fresh showed its revenue USD135Million during 4th quarter of 2017 showing 35% increase compared with 3rd quarter of 2017.
Another difference was implementing Amazon Locker inside the WholeFoods Market store. This made the omni channel strategy to come true by merging Amazon.com, Amazon fresh, and the Wholefoods Market. If you are Amazon Prime customer, you can get additional discount in Wholefoods market now.
Starting from Fashion items, Amazon have been selling its own brand (private label) to diapers, battery, and cleaning stuffs. They are now trying to launch organic private brand with the purpose of cost saving. Now Amazon is reducing the local food suppliers and this is some kind of action prior to launching private brand.