Amazon and Whole Foods Market Supermarket Disruption Starts Now

On Monday, Amazon and Whole Foods Market became one, and the eCommerce food wars are officially on. The acquisition was announced just this June and has been fodder for lots of discussion and speculation over the last few months.

Last week Walmart upped the ante on the food front with Google Home integration rolling out later this year and adding more delivery trials in two cities.

Recently Target acquired a delivery logistics software vendor that will help it roll out more delivery options.

And Instacart, a company that partners with grocery chains, just expanded to another 540,000 households in the San Francisco Bay area. The company plans to offer food delivery to nearly 80% of the U.S. population by 2018.

Among its grocery partners, Instacart claims Kroger, Costco, Wegmans, Publix, Albertsons, Harris Teeter, Jewel-Osco, Safeway, Stop & Shop, Whole Foods Market and recently added Aldi to the list. Not all partners are available in all cities of their network as each grocery chain manages the roll out of delivery services.

But with Amazon and Whole Foods Market now officially one, Instacart and its partners will have to step up the game if they wish to compete against Amazon.

AMAZON PRICE WAR JOB #1

Amazon and Whole Foods Market already announced that this week prices are falling on popular food staples in fruits, vegetables, 365 Everyday Value products, dairy, fish, and meats.

This price reduction follows an Amazon typical game plan to enter a market by pricing products aggressively to gain market share.

MORE AMAZON AND WHOLE FOODS MARKET INTEGRATIONS TO COME

Both companies are in the process of integrating their IT systems, and that will lead to Amazon’s Prime Membership becoming the Whole Foods Market customer rewards program. The plan is to provide Prime members additional in-store savings and other in-store benefits.

Amazon also plans to install Amazon Lockers in select Whole Foods Market stores. Amazon Lockers is Amazon’s pick up location program if you do not wish to have your Amazon orders shipped to your house or office.

Whole Foods Market private label products, including 365 Everyday Value, Whole Foods Market, Whole Paws and Whole Catch will become available through Amazon.com, AmazonFresh, Prime Pantry, and Prime Now.

Amazon is also installing Amazon Echo store displays in Whole Foods Market, with playful tag lines of “Farm Fresh” and “Pick of the Season.”

“It’s been our mission for 39 years at Whole Foods Market to bring the highest quality food to our customers.”

“By working together with Amazon and integrating in several key areas, we can lower prices and double down on that mission and reach more people with Whole Foods Market’s high-quality, natural and organic food. As part of our commitment to quality, we’ll continue to expand our efforts to support and promote local products and suppliers. We can’t wait to start showing customers what’s possible when Whole Foods Market and Amazon innovate together.”

John Mackey, Whole Foods Market co-founder and CEO

THE FUTURE

Amazon and Whole Foods Market will start to integrate distribution and logistics, that will improve efficiencies and also lower more prices.

Whole Foods Market will continue to operate under the Whole Foods Market label with headquarters staying in Austin, TX. The company will continue to expand store locations and with the lower prices push, likely will become a larger competitor to regular grocery store chains.

It is inconceivable that Amazon will allow Instacart as the delivery partner for Whole Foods Market too long. With Amazon Prime delivery and AmazonFresh expanding, it is only a natural progression to include Whole Foods Market.

Now that it is here, the game is on! What do you think about Amazon and Whole Foods Market taking on the grocery business? Let us know in the comments section below.

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