Look, I understand why Whole Foods agreed to be acquired by Amazon — the traditional grocery industry is taking a beating from all sides. Competition from non-grocery retailers, new technologies and strategies designed to meet the demands of today’s time-starved shoppers are taking over, including:
- Subscription Meal Services;
- Online Grocery Ordering & Delivery;
- Curbside Pickup; and
- Big Box stores getting into the grocery game.
But being swallowed up by Amazon can be good news and bad news. While price-cutting may bring in some additional shoppers in the short term, the Amazon way of not making a profit could severely hurt Whole Foods in the long run.
For its part, Amazon is getting plenty out of the deal, including a real-world “testing lab” for its pricing strategies.
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My personal experience with the new partnership has proven unsatisfying so far. On the day that Amazon announced price slashing at Whole Foods, I also received a promo from Whole Foods to try home delivery for free. My goal was to find some of the less expensive products on the Whole Foods site and include them in my home delivery trial. No luck.
There simply was no coordination between Amazon’s promo and Whole Foods’ promo, so I was one consumer that was disappointed by the partnership that day.
Additionally, I was charged a service fee for the delivery that was routed through Instacart, which I found out midway through the shopping experience. My personal Whole Foods shopper, Rachel, was fabulous and attentive. She let me know I could have gotten rid of the service charge if I knew about it before finalizing the offer. Ugh.
But the silver lining of all this was my personal shopper, Rachel. She and I chatted via text throughout the shopping trip; and she let me know when she needed to replace an item that was not available. She also personally delivered my order to my front door and kept me well-informed of the timing. When I received my email order receipt along with the option to tip Rachel, I gave her a nice tip.
I’ve heard a lot of chatter in the industry about the highs and lows of grocery home delivery. It can be very dissatisfying for the shopper if the experience is not ideal. It also presents challenges for retailers and brands that are trying to find new ways to personalize the shopping experience while promoting their brands. Additionally, they are trying to accomplish these goals against the backdrop of completing the “last mile,” a stretch that can particularly difficult (and expensive) when transporting perishable grocery items.
I am looking forward to learning more about how brands can stand out in this digital revolution overtaking retail during the Retail Innovation Lounge at Shop.org next week, where I am moderating a session along with Brian Cavanagh from Hershey’s and Jan Rogers Kniffen, a retail industry expert. Brian will share insights into a recent survey Hershey’s conducted to understand consumers’ likes and dislikes about online grocery shopping, and how to make a brand stand out in the process. If you’re in Los Angeles for the event, join us at 9:30 am on Tuesday, Sept. 26.
