Cannonball!

Amazon acquires Whole Foods... so what's the impact?

Cannonball!

For the last several years the largest internet retailer in the world, Amazon.com, has dipped it’s toe into brick and mortar retail with a few campus bookstores, and a couple others physical stores in upscale areas like the most recent opening of Amazon Books in Manhattan.

Likewise, Amazon had aspirations to open up grocery stores and convenience stores using innovative technology, focusing on automation and virtual/augmented reality. On June 16, 2017 aspirations became reality when Amazon.com announced its intention to acquire Whole Foods Market for $13.7 billion. This announcement was not dipping a toe in the water, it was a giant cannonball into the brick and mortar retail pool which created a thunderous splash that just might tip the entire industry on its head.

So Why Did Amazon Buy Whole Foods?

According to a recent Forbes Magazine article a few of the primary drivers for the acquisition were:

  1. 450 available retail stores
  2. The Whole Foods 365 brand, which is a widely recognized private label
  3. The overall strength of the Whole Foods Markets Brands

The 450 retail stores provide valuable real estate which can be transformed into local pickup centers for online Amazon orders, and addresses the logistics problem of the last mile of delivery, requiring food deliveries to be quick and fresh, that has always plagued online grocery businesses. The Whole Foods 365 private label brand could be every bit as valuable. Amazon has experienced significant degrees of success (and market share) with Amazon private label batteries, baby wipes, and several food offerings available to Amazon Prime members. It is not a far stretch to imagine a time when Amazon offers the 365 brand to prime members which has the potential to control a significant percentage of market share in food, based upon Amazon’s past success in private label. The enhancement of Amazon’s omni-channel retailing capabilities with new local customer pickup centers, flexible last mile of delivery, and highly-coveted private label brands will be a force to be reckoned with in just about every type and format of retailing.

With Amazon stepping into the food industry, analytics will keep you competitive:

Now What?

Retailers, consumer products companies, and any company in the food business have been put on notice that Amazon is coming for their margins. To stay relevant and protect margins these companies must spot and capitalize on opportunities immediately. This can be done using an advanced analytics platform which addresses the following needs:

  1. Mix & Match Data Sources – Industry-changing trends live in your data, unfortunately they typically do not live in a single, clean, prepared data set.
  2. Dynamic Data Exploration – Static reporting is not enough, allow the business user to explore their own data, and make discoveries that truly impact the business.
  3. Advanced Analytics –An advanced analytical platform will allow business users to see correlations in their data they had never thought of. This could be through visual associations, advanced data mining algorithms, natural language generation, or virtual reality.

The Qlik platform accommodates all of this and more because Qlik empowers the business user to make better decisions. If you are competing with Amazon today or will be in the future, I strongly suggest evaluating the Qlik Platform. Please take the Qlik Market Basket Analysis Solution Demo which showcases many of the capabilities discussed, and a few months or years down the road, you just might be able to avoid the splash from the cannonball.

 

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