Amazon Fresh and the Amazon Go store in Seattle hinted that the retailer wanted to expand into food in a big way. Now they have proven their intent with the purchase of Whole Foods for $137 billion.
There is a problem. Unlike many of the other products Amazon sells, food will not travel well. Two-day delivery is not enough. With many goods, like frozen items, half an hour delivery is much more viable unless you have trucks equipped with both frozen and refrigerated areas.
Whole fFoods will continue to operate as a separate brand, but that brand will probably look much different five years from now, maybe less.
Picture this: much like Amazon Go, you will walk into a Whole Foods store, loading your cart as you go. The cart will have a scale that weighs your produce and cameras and scanners will record everything you put in it. When you’re done, you will simply walk out: no need to check out, the total for your grocery bill will be taken out of whatever account you have connected to Amazon.
There will be employees who will do some tasks during the day, but most of the stocking will be done at night by automated machines guided by machine intelligent computers. When you walk in early in the morning, all the shelves will be fully stocked and look pristine.
People will work in the produce and meat departments, ensuring quality and that the department looks appealing. There will be employees in the deli and the bakery areas, and you will still be able to get service at the juice bar and upstairs restaurants.
Cashiers will be a thing of the past, and the human stocking crew will be much smaller. However, Whole Foods will have an option they do not yet have: home delivery with Amazon Fresh or a similar service.
Maybe not in five years, but at least in 10, the trucks that deliver your groceries, should you not want to go shopping, will be self-driven. Smaller orders will be delivered by drone. If you hate grocery shopping, you will never have to actually go to the store.
There will still be competitors in the industry, and some people like to grocery shop, but those competitors will also have to step up to cashierless options and delivery services. Winco and Costco will survive the transition, as will a few other companies who choose to innovate fast enough.
The disruption Amazon brought to retail, the changes it forced companies to do, will now spread to food and the grocery industry. Jeff Bezos has depth, he has infrastructure, and he knows how to scale.
In response to the news, Kroger stock fell, as did Super Value, Costco, and Sprout Fresh. The deal is expected to close during the second half of the year.
Troy is a Freelance writer, editor, and author who lives, works, and plays in Boise, Idaho where he hikes, cycles, skis, and basically enjoys the outdoor lifestyle of the Northwest. Troy writes about business, sports, GIS, Education, and more. He is most passionate about writing suspense thrillers, and his work can be found at https://www.amazon.com/Troy-Lambert/e/B005LL1QEC/
