Amazon’s surprise acquisition today of Whole Foods Market just shows that Amazon is ahead of the curve. Yet again.
It’s also a proof point that brick-and-mortar isn’t dead; it’s growing. The retail brands that have been struggling are not surprising. The brands that are closing their doors are the ones you would expect, because no one has loved them in a long time.
Instead, retailers today must have a very clear digital strategy to survive, which places brick and mortar as a secondary adjunct to a well-designed experience ecosystem.
Adding Whole Foods Market to Amazon’s family of brands not only expands its physical footprint—it also addresses Whole Foods’ core problems: how to do what they do and deliver value.
As times got tougher, Whole Foods couldn’t deliver the additional value that consumers are seeking. The core of Amazon’s business is value and convenience.
Whole Foods will likely evolve into the checkout-free Amazon Go model. Whole Foods’ experience and reach within retail is what Amazon didn’t have before, and now they can integrate their technology into physical retail.
Think of the Dash Buttons, among Amazon’s other innovations, and how all of these innovations can also be tied to your Whole Foods account. Think of how your Amazon Prime membership ties into your local grocery store. Think about what role Alexa could play at checkout.
Retail used to be based around the brick and mortar store, with a digital strategy added after the fact. Now digital is the pillar, and brick and mortar is one of the strategies. Digital-first is the way of the future. The new retail experience is this ecosystem, and only focusing on one channel will lead you down the wrong path.