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When Amazon Purchases Whole Foods: A Prediction
You may have heard in the news recently, Amazon is purchasing Whole Foods.
Or at least trying to. What surprised us about this was the reaction we were hearing from others. Such positivity! “This is amazing”, “This will revolutionize grocery shopping”, “Amazon is genius”, such positive praise for the pairing of brands. Call us rebels, but we aren’t as thrilled about this news.
Amazon and Whole Foods are different brands. We don’t mean that in a “duh” regard that they obviously are two different brands because they are different companies; we mean they are DIFFERENT brands. It’s like pairing up GUCCI and Kohls.
If I shop at Amazon, I want things cheap, fast, efficient. I want the best deal as quickly as I can get it. I want convenience. I want everything I want, one click away from my doorstep. I might shop in bulk, and I do not believe in spending more money on something just for a name or an “organic” label. I probably order out and cook a lot of spaghetti and eat processed food without thinking about the fact that it’s labeled “processed.”
Conversely, if I shop at Whole Foods, I want ‘good’ things. I want ‘better’ things. I want healthy, wholesome, raw and rich. I like organic. I probably shop at Target even though I can get the exact same things for cheaper at Wal-Mart. I might have a primarily vegetarian lifestyle, or eat meat that is grass-fed. I might enjoy yoga or spin classes and a nice glass of wine.
We’re not saying that someone who shops Whole Foods would never order on Amazon, but the branding exists and when merging brands, the bigger brand always wins. Our prediction? Amazon will eat Whole Foods.
“We sell the highest quality natural and organic products available. We satisfy, delight and nourish our customers. We support team members. We create wealth through profits and growth. We serve and support our local and global communities. We practice and advance environmental stewardship. We create ongoing win-win partnershipswith our suppliers.”
“[Our vision is] to be the Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online. We strive to offer our customers the lowest possible prices, the best available selection, and the utmost convenience.”
There are a few things we can glean from these statements alone.
1) Quality and Cost are two different values. If you’re in business, you’ve probably seen the scope triangle of time, quality and cost. You can’t have it all. If I’m shopping, I am either going to end up with the cheapest chicken breast, or the finest quality chicken breast. I may be able to find the highest quality chicken breast within the lowest possible price point- but something has to give. That said, there have been a few murmurs that high prices are what spurred Whole Foods’ demise, so maybe Amazon can find a happier balance and capture a different market.
2) Different views on team members. If you peruse the internet for testimonials of working conditions, you’ll find that the workers at Whole Foods have very different stories from those at Amazon. As seen in Amazon’s mission and vision statements, they are customer-centric, meaning the ultimate goal is to serve the customer, even at the expense of exhausting the staff. While Whole Foods also wishes to serve the customer, note the difference in wording- “We satisfy, delight and nourish our customers.”
They also have built in to their value statements that they support team members. They hold to the philosophy that happy team members = happier customers. Part of why Amazon is able to remain customer-centric without it affecting the energy seen by customers is that they are all online. We never have to see it. We see a product, we get a product. We have no clue who is working behind the scenes to achieve this.
If they purchase Whole Foods, this philosophy will have to change. A toxic or stressful work environment is immediately detectable to the customer-base, especially since those who are already faithful Whole Foods shoppers are very used to seeing team members happy and free.
3) Goals do not align. The goal of enabling customers to find ‘anything they want online’, and the goal of selling (in-house) the ‘highest quality natural and organic products available’, while both great goals, are vastly different. Again, something has to give. Either Amazon will need to start selling higher quality, or (more likely) Whole Foods will need to source more options. This again attracts two very different customers, a perfect recipe for a brand identity crisis.
4) Commandeering is different than partnering. Whole Foods states that they like to create ‘ongoing win-win partnerships’, whereas Amazon prefers to take over. These are two very different models of building business. Again going back to the principals of cost vs. quality, Amazon purchasing Whole Foods means they will be looking for the most cost-effective suppliers, which likely means termination of several existing win-win partnerships. With Amazon there is no win-win, there is only WIN.
Don’t get us wrong, we’re big fans of Amazon (especially Prime), and we are also fans of Whole Foods. We just don’t think the two should marry, and we speculate the honeymoon will be short-lived.
What do you think of this recent merger? Share your thoughts below!