Ashwin Deshmukh, director of insights, Hungry
If the robber barons of the last century or the cable moguls of today had Jeff Bezos’s media instincts, maybe people wouldn’t hate them so much.
Amazon seems to have pioneered a new PR angle for M&A with the close of its Whole Foods purchase: Slash prices deeply, tell everyone about it. The press around the drop in price on everything from bananas to the foil of millennial-wealth, the avocado, is the stuff corporate dreams are made of. Finally, someone figured out how to make “synergy” something consumers care about.
The overlap between the Whole Foods and Amazon Prime customer has led to some really obvious solutions that the crunchy fancy demographic is loving. Pickups, returns, loyalty, combined datasets for enhanced recommendations, that all seems to be going over pretty smoothly. Much hairier will be the actual decisions around the kind of consumer experience Amazon can create in-store and online, and what verticals they can mono-maniacally go after.
Here are some ideas, and places, Amazon should probably investigate for new acquisitions.
Food
The decline in Whole Foods’ growth being linked to everyone else getting better at what they specialized in, organic produce and premium packaged goods, is really well documented. Less well grasped is just how bad, or mediocre, the prepared food options became over the years.
As Safeway and the other old-line grocery stores dedicated more and more square footage to the high-margin prepared foods, Whole Foods customer abandoned it. Poke around the mildew-colored greens and gummy mac and cheese and you’ll see why. Please don’t even bring up the pizza or call it that. The BBQ station is called, wonderfully, BBQ.
This is an easy fix. Hire Loreen Moyal of Paperwhite to make something much more seamless. Look to innovative food halls like Dekalb Market in Brooklyn on how to bring in unheralded local talent. Fixing the salad bar should be pretty easy, and make this a place for sampling dressings from companies like Tesse Mae. And desserts, millenials love desserts, and love holding them up on Instagram.
Coffee
If you know that “Allegro” is the name of Whole Foods’ coffee brand, you’re likely a customer from before they bought the brand in 1997, or someone who doesn’t really care about coffee. Allegro’s roasters and suppliers have been complaining for years that Whole Foods violates its own standards on freshness.
Blue Bottle would have been an excellent buy here, but Amazon can press its delivery and subscription advantage in unique ways. Discovery of new roasters, or a membership to the coffee bar, can come along with getting your beans from Amazon. If you buy something on the enterprise or SMB delivery side, it could be a really powerful model to challenge the dominance of JAB Holdings, a European company that has snatched up Inteligentsia, Stumptown, Keurig and Peet’s.
Beauty and Supplements
The saddest section of them all, until recently, relegated to the worst parts of the store. Part of this is not totally on Whole Foods: The brands in the category of natural or safe personal care have an aesthetic close to whatever was cool in Seattle in 1994. Utne reader chic.
But the explosion of companies like RMS and Nu Cosmetics, bringing a luxurious feels to products that are also good for you, is a big area of untapped opportunity. Credo would be a great buy, and could lead to a really great store-in-store dynamic, with a customer who samples and lingers.
Health Technology
Amazon scored points for cheekiness by merchandising its Echo devices with embedded Alexa software (on sale, natch) alongside the produce. Creating a live-testing environment for connected health products could create a contextual business. Want to lose weight? Here’s the menu and the Wi-Fi scale connected to your shopping list. Food allergies? Brush the Nima sensor across some artisanal bread.
A broader ambition could be for Amazon to be a counterbalance in the category to Apple, as the Apple Watch continues to eat one-off monitoring devices.
Conclusion
At the end of the day, Amazon owe it to consumers to not just turn Whole Foods into a jumping off point for its quest for grocery domination, but to offer a better shopping experience than Whole Foods traditionally has been able to. Amazon has the means and the talent to do so, and to show the world that they’re not just geniuses at making money, but that they’re better than any other company at giving consumers what they truly want.
Hungry is a New York-based digital agency that specializes in strategy, design, development, SEO, paid social media and digital marketing.
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