Friday, February 09, 2018

The Amazon-ification of Whole Foods - The Atlantic

For a bigger-picture Amazon perspective (from January), see Amazon Has a Plan to Become Profitable. It's Called Advertising (Bloomberg)

"But it would be a bigger mistake to analyze Thursday’s news in a vacuum, because this announcement is bigger than heirloom tomatoes and two-hour delivery windows. In the broader context of Amazon’s ambitions—to build an operating system for the home, to expand into pharmacies and health care, to become a hit-making television production studio—this is the logical next step in turning Prime into the ultimate “life bundle,” a single membership program to bind consumers to every possible commercial need. As Amazon extends into more product areas, it can own both the search platform and the product, so that when a dad says to the smart speaker on his counter, “Alexa, I need brown rice and pork,” the product that arrives is an Amazon-branded box containing Amazon–Whole Foods–branded rice and pork.

This sort of vertical integration is invaluable for Amazon. For one thing, the creation of an on-demand Whole Foods product makes the company’s Prime subscription more valuable. Enriching Prime is arguably Amazon’s most important goal, given the lifetime value of a Prime subscriber. What’s more, as Amazon becomes the top-of-mind destination for not only books but also toiletries, medicine, and chicken breasts, it becomes the first-stop destination for all of its customers’ searches."
The Amazon-ification of Whole Foods - The Atlantic

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