The Wall Street Journal has a piece worth reading about how Amazon’s bricks-and-mortar bookstores, of which there are about a dozen, may offer up clues as to what it plans to do with Whole Foods now that it owns the food retailer.
A prime example - pun intended - would be its ability to use dynamic pricing to offer better prices to members of its Prime program than to non-members.
In addition, unlike traditional retailers, Amazon encourages showrooming, which is the practice of comparing prices while in the store and actually making the purchase online.
“Most traditional retailers use decades of in-store sales data to inform their selection and pricing,” the Journal writes. “With Amazon, online sales data drives decisions. Amazon is beginning to reap information about Whole Foods sales online after introducing the grocer’s private-label goods on the online retail giant’s site immediately after the acquisition.”
A prime example - pun intended - would be its ability to use dynamic pricing to offer better prices to members of its Prime program than to non-members.
In addition, unlike traditional retailers, Amazon encourages showrooming, which is the practice of comparing prices while in the store and actually making the purchase online.
“Most traditional retailers use decades of in-store sales data to inform their selection and pricing,” the Journal writes. “With Amazon, online sales data drives decisions. Amazon is beginning to reap information about Whole Foods sales online after introducing the grocer’s private-label goods on the online retail giant’s site immediately after the acquisition.”
- KC's View:
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One of the interesting things about this story is that the Amazon Books stores apparently are pretty good at some level of localization and customization - the selection in Chicago will be different from that in Seattle, for example - while at the same time there have been reports that under Amazon’s ownership, Whole Foods plans to do less local sourcing and put more emphasis on centralization. This would be a mistake, I think, and maybe if Amazon Books over any clues to Whole Foods’ future it is that it is likely to loosen the reins when it makes sense, and tighten them when appropriate.
Which, by the way, makes Whole Foods potentially more competitive, not less so.
