Amazon, the world’s biggest e-commerce company, takeovers Whole Food Markets in a stock-raising deal that instantly molds the shape of the American Grocery Competition. Instead of focusing on big-tech-companies to further bolster Amazon’s business, it opts to venture into a new scene through whole-foods and severely drops instacart in the mix.
As of this moment, it stands as Walmart’s biggest rival.
The old adage “another man’s trash is another man’s treasure” holds true for this huge story. Initially, the world and even analysts’ knee-jerk reactions are more on the puzzled side. After settling down, the wisdom of this move is slowly being revealed and it may very well be Amazon’s quick yet powerful blow to both small-time and big-time grocery delivery companies.
The acquisition allows Amazon to have a quick start to the new industry that it is getting in. Loved food brands, over 400 branches, and experienced hands puts the A to Z online store immediately in contention of the top spot.
AmazonFresh and Amazon Go instantly levels-up exponentially due to this event. The then limited drive-thru locations (only in Seattle) joins an already established market areas brought by Whole Foods.
Not just the location but the brand is boosted by the highly popular in-house labels that Whole Foods had. So much for baby steps, the inclusion of both products and people hastens Amazon’s climb on the global standings with their revenue growth already trending upwards as it is.
Realistically speaking, Walmart’s over 2 million employees are ahead over anyone by a mile. Their dated and yet people-oriented approach remains their tagline across their thousands of stores. Yet, Amazon can potentially breathe down their necks soon with their own 100,000 new talents.
CEO John Mackey gets into a win-win situation by agreeing to a huge sum but also get to enjoy the eventual development of his founded company. Contrary to his initial statement of groceries still toppling Amazon’s offerings, he has helped make the turnaround.
Amazon’s extensive experience in delivery exploits the benefits of having new stores that could also be pick-up and delivery points. This efficiently costs down in costs while gaining new areas that have existing customers.
More on the future of Instacart, the company is only on the early parts of its partnership with Whole Foods. An uphill battle given Amazon’s strength and position not only in the United States but also worldwide.
The possibility of traditionally-set supermarkets to collaborate (with Instacart as an example) in response to this news is still highly unlikely to happen.