The announcement made earlier today regarding Amazon buying supermarket chain Whole Foods for $13.7 billion sent a shockwave through the grocery industry. The purchase gives off the vibe Amazon Go technology will become available nationwide. If that indeed happens, Amazon will quickly revolutionize the grocery industry for the better.
Amazon Go is Amazon’s response to the growing concept of combining the grocery industry with modern technology. With companies offering online grocery shopping and grocery delivery services (Amazon Prime being one of them), Amazon identified a way to take another step ahead of the game.
Amazon Go is a store in which there is no checkout required. That means consumers can enter a store with the Amazon Go app on their smartphone, grab any items they want, and walk out without physically paying for the goods or interacting with a store employee. The “Just Walk Out Technology” keeps track of products in a virtual cart. That means there is automatic detection of items being removed or returned to store shelves. Once consumers are done shopping, they leave the store and their Amazon account is automatically charged for the products taken.
Despite the technology being amazing, many may wonder how this furthers the grocery industry in a time where companies are willing to deliver groceries to a consumer’s doorstep. The reality is many people are unwilling to do their grocery shopping online, even though online shopping is booming in popularity. That means the Amazon Go technology fits the model of what is currently being desired by consumers.
My personal theory, and there is no factual evidence to this theory at the time of this blog post being written, is that Amazon purchased Whole Foods for a very specific reason. That reason being to implement Amazon Go in the 400-plus Whole Food stores located throughout the nation.
The idea is brilliant. And if implemented correctly, it spells doom for competitors.
For now, Whole Foods will keep its name and operate as it has. The company’s employees will still have their jobs. However, one must wonder if it is only a matter of time before the stores take a step towards becoming self-sufficient. That means several hundred employees being let go.
The writing is already on the wall, as the stock market opened up with all grocery companies down double digits. Grocery giant Kroger is down 16 percent, Costco is down eight percent, and Wal-Mart is down seven percent. Meanwhile, Amazon is up three percent.