If Amazon understands one thing, it is innovation, and if there is one thing Amazon has always been capable of doing, it is proving critics wrong. After all, almost 20 years ago, a number of people balked at the idea of buying books, CDs, DVDs, and other merchandise on the Internet. 15 years ago, Amazon was one of the first large companies to launch a cloud computing platform, and 10 years ago, when many people didn’t see the need for an eReading product, Amazon launched the Kindle line of products.
Much like the previous introductions that Amazon has brought to the market, the $13.7 billion acquisition of high-end grocer Whole Foods is currently being met with the same scepticism. While this is quite a substantial and publicity-generating move, it is more of a progressive one than a case of Amazon jumping into a new market.
Before looking at Amazon’s past endeavours, let’s look at how the overall eGrocery market is evolving and growing. As of 2013, online shopping accounted for 3% of all US grocery shopping and for nearly $7 billion in sales. However, by 2023 (only 6 years from now), those numbers are expected to rise to 14% and well over $30 billion, respectively. Considering that the growth will continue after 2023 as well as the value of any expansion outside of the US, this $13.7 investment could easily pay for itself.
Though it was soon to be overshadowed by the Kindle launch in November of 2007, Amazon’s first grocery shopping and delivery experience actually goes back to August 2007, when AmazonFresh was first beta tested in Mercer Island, Washington. This service, involving the home delivery of fresh grocery items and a subset of additional goods from Amazon.com, is now available in 13 American cities as well as London, Berlin, and Tokyo. Expanding on this, in 2014, Amazon introduced its Prime, a service – currently in the US, Western Europe, Japan and India – which allows for the express shipping of non-bulk dry and non-perishable goods from a specific selection on Amazon’s native website for a flat fee. The final pre-Whole Foods venture (in early 2017) is Amazon Go: at the size of a typical convenience store, the store uses computer vision, deep learning algorithms, sensor fusion, and smartphone usage in order to automate many of the non-shopping time-consuming steps involved in a visit to the grocery store.
As for how the Whole Foods acquisition will work alongside of Amazon’s developing grocery dynamic, the company is, unfortunately, being very secretive about long-term plans. However, looking at previous developments, there are a number of promising ideas. Considering Whole Foods’ prominence as a natural, organic grocery store as well as Amazon’s shipping and logistical expertise, this could potentially make better eating choices accessible (as well as affordable, with Whole Foods’ 365 Everyday Value line of products) to more people. Conversely, with the technology Amazon is currently experimenting with in the Amazon Go project, even everyday “pick-up” trips to a grocery or convenience store could be made significantly more efficient and offer more choice. Overall, knowing what Amazon has done when involved with other markets, the effect will surely involve better options for the consumer when it comes to price, quality, and time.
And with Amazon and other retailers utilising every possible bit of information about customer purchasing habits, and knowing exactly what each of its users buys, and when, we could predict the future of grocery shopping as fully in-app operated, self-serviced, and completely customer-tailored, coming along with personalised recommendations, based on not only taste and preferences, but also biometric data and health goals; with community centres enabling shoppers to share the full scope of experiences with all members of their circles; and services dedicated to answer all the high expectations of the 21st century customers.
