It is pretty much undeniable that Amazon is rapidly becoming one of the world’s biggest companies. But with the likes of Walmart in a bit of trouble, I’m going to explain how Amazon is going to takeover groceries in order to dominate the entire retail industry.
With Amazon’s aquisition of Whole Foods for $13.7 billion, my suspicions were confirmed about their plans for the future. Please note, I do not have inside information from Amazon, and that this is a prediction based on market trends etc.
Currently, several products such as the Echo Dot are sold within Whole Foods due to the cheap retail opportunity for Amazon to sell their tech. Also, the prices of groceries within the stores have been tremendously reduced in order to compete with other markets. But what’s noticably interesting is Amazon Prime members getting special discounts within stores in order to entice them into Whole Foods. Essentially, all of this acts as a self sustaining model to attract people to Amazon Prime in order to get cheaper discounts — therefore increasing revenue for Amazon.
You may remember this video from 11 months ago:
My assumption is that Amazon will use Whole Foods stores to integrate the Amazon Go concept into the retail environment.
During 2013 & 2014, Amazon filed patents for the required technology in order to operate the Amazon Go store. This involves detecting items being removed from the shelf, and then consequently being added to your basket. Amazon would then charge the cost of your grocery shopping to your Amazon account (as shown in the video).
As proven with Amazon Web Services, the company has a good reputation of licensing its products/patents to other companies such as NASA, Netflix etc. But how does all of this affect Walmart?
Supermarkets such as Tesco, Coles, Walmart, and other chains may not have the capability to develop their own version of this technology. And so with a proven business model, they would most likely turn to Amazon in order to license it. But why would other chains want it? Time. Amazon would be selling the consumers of Walmart etc time by offering a flawless experience without any checkout queues. Therefore making this a very attractive concept.
After all, companies could then monetize from this concept as they would know from consumer data exactly who is buying their products, and therefore create niche targetted ads at their consumers in order to generate more revenue in the future.
I don’t want to say that Grocery stores won’t exist. That’s not what I’m saying. However, I am stating that they will not be exactly the same as they are right now within 5 years. This shit is already happening with AliBaba in China. It’s just a matter of time before it happens in the Western world…
As Whole Foods begins to expand at an exciting rate, I’m very much looking forward to the day in which they allow Amazon to complete dominate the physical retail sector.