Amazon Buys Whole Foods for $13.7 Billion

The giants are at play, and for a marketer, this is like watching the Superbowl.

Over the next few weeks, articles will be written speculating the path forward for Amazon and their decision to buy a brick and motor store. This is a major win for Amazon both short and long term.


Short Term Gains 

We heard about the Amazon Go concept where shoppers would be able to walk in, select items, and just walk out – with no cashiers or checkout lines in sight. The concept was brilliant, but Amazon lacked the footprint to make it happen. Of course, the company could have created a few stores, but to truly test the concept a large presence is needed. One could argue that just because the concept store worked in Palo Alto, that it would die in Paducah, Kentucky. Using the vast stores that Whole Food has, it gives a better picture of the entire country.


In the next year or so, we'll see Amazon starting to add technology to the Whole Foods shopping experience. The target audience of Whole Foods lends itself to be a more tech-savvy group. They also have a higher presence of people with smartphones and high-end electronics.


The change and shift in advanced technologies such as AI and augmented reality are shaping the world around us. The Amazon Go concept is not just about getting rid of the checkout line. It is also about the user and customer behavior. The same app that will allow you to "just check out" will also track your movement around the store. It will allow Amazon to know that people who walk by the cookie sections twice without making a selection go back to grab cookies when they are done shopping and then also buy milk. While some of the data mining is scary to most, it also means that the marketing and advertising that you receive are more tailored to your interests and buying habits. Imagine only receiving offers for things you like and are ready to buy.


Long Term Gains

Consumer purchasing behaviors data is the product of our age.  It's what motivates Google to make Gmail free and is driving Amazon into a brick and mortar storesThe next 5 years will likely include more shuttered retail stores, but the process of this shift is still unknown. Having a physical presence will give Amazon the data to see a clearer picture of buyer behaviors and help the company plan its future. The global picture provided by this data allows Amazon more accurate predictive analytics and forecasting of revenue – a huge competitive advantage in any market. 

On a smaller scale, our agency sees this in the way we service clients. Gone are the days where we come up with a creative campaign with radio and TV ads then simply measure their reach and impressions to decide if they were a success. It has to go deeper than that. Sure, you still have to understand how many people see it, but who sees it is more important. From there, it's all about the actions the viewers take. Did they interact with your content, social, or website? What actions did they take? How often did they engage? And when? 


When you add all of this up you get your ROI and conversion rate of your efforts. For example, if you knew that every time a person read 3 blogs on your website, opened 6 emails, and shared 2 of your social posts, they were 92% more likely to buy your product – how valuable would that be? How would that change the way you provide your services? How would it shape your business? 


This is the same thing Amazon is looking to do here. They're answering how they can better serve their customers and increase profitability. They're looking to lead the charge one what is happening to retail in the coming year. To do this, they need data, and, in this case, your basket of groceries.


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