Wendy Wallner, senior vice president, shopper & retail strategy, GfK
Speed is one of Jeff Bezos’s calling cards—and so Amazon wasted little time lowering grocery prices at Whole Foods Market, now that its acquisition of the brick-and-mortar retailer has been completed.
Among other things, Amazon knows what Whole Foods customers are thinking and what they expect from the online behemoth—for better or worse.
At some point, it seems likely that Amazon will want to sell more Whole Foods products online and make Amazon products available for pickup at WFM locations. But that may be a longer haul to the checkout counter for Bezos. Of all the things people desire and expect from the acquisition, these seem to be at the bottom of their shopping lists.
GfK surveyed roughly 1,000 shoppers on its nationally representative KnowledgePanel® shortly after the Amazon-Whole Foods deal was announced, and reaction was mostly positive. But hoped-for “wins” among consumers seemed to focus on longer-term synergies between the two companies, as opposed to immediate effects
In the good news aisle, the study’s findings suggest that Amazon and Whole Foods are a good fit. Three out of four Whole Foods shoppers had made at least one purchase through Amazon in the past month, and there was a higher percentage of Amazon Prime membership among Whole Foods customers (50%) than total U.S. consumers (37%).
Overall, 23% of the survey respondents reacted positively to the merger, while 38% of Whole Foods shoppers did so. This compares with positive sentiment expressed by 31% of Amazon shoppers and 43% of those who shop at both Amazon and Whole Foods. Just 10% of those surveyed found the news to be negative.
The biggest hopes of consumers coming from this new alliance relate to pricing, technology and online selection. Specifically, shoppers hope grocery prices will decrease and delivery will be free for Amazon Prime members. They also want to see Amazon begin to carry Whole Foods products and for the grocer to begin using new, more efficient technology in its stores.
Among consumers’ concerns—that their local Whole Foods outlets would remain open after the merger: just 20% of all respondents chose this, compared with 49% of Whole Foods customers. Moreover, nearly one-quarter (23%) of Whole Foods shoppers hope to see more stores open in the future.
In the study, just 28% of Whole Foods shoppers expressed the desire that “Nothing really changes in my Whole Foods store, I like it how it is.” So there seems to be ample room for Amazon to experiment with its newest asset.
However, a very low proportion of consumers say they are “very/extremely likely” to sign up for a grocery e-commerce service through Amazon and Whole Foods. In fact, at 9%, this interest is exactly the same percent of consumers who are currently engaged in online grocery shopping—so there’s no apparent incremental lift.
Where we do see some potential is in the “somewhat likely” bucket—with an additional 22% representing possible converts. All in all, almost one-third of all consumers are possibly in play. Consumers are not yet willing to commit to a potential Amazon-Whole Foods meal/grocery delivery service but a latent interest seems to exist.
So the jury is clearly out on the Amazon-Whole Foods pairing. The typical grocery shopper today buys at five different retailers each month (on average). They forego the convenience of buying everything in one place to instead pick and choose among retailers based on what that store is good at. They have a Target list, a Costco list, and so on.
Will added convenience of online grocery alone change that behavior? Convenience is a lot, but it isn’t everything. Time will tell.
GfK SE, based in Germany, specializes in market and user experience research.
Favorite