Amazon’s recent Whole Foods acquisition for a mere $13.7 billion has sparked a lively discussion around the changing architecture of the retail world and what companies must do to keep up with more sophisticated customer expectations. One would assume that this massive purchase is a move on Amazon’s part to disrupt an industry that’s been a tough nut to crack: the grocery industry. But by acquiring the presence that Whole Foods has, Amazon will likely change the game for grocers and shoppers alike.
A recent article by Jacob Passy from MarketWatch explains that this acquisition is a direct route to automation for grocers. With models already in place like Amazon Go, the traditional employee model for grocery stores will certainly be a thing of the past. Passy notes in his article that as few as three employees can operate an Amazon Go store, which poses the question – should grocery employees fear for their job security? And the answer is not exactly.
It’s certain that technology like AI and digital assistants will slowly take over mundane tasks in a retail setting like cashiering or pricing. Self-check out is a great example of this that is already widely accepted. And while those responsibilities will likely be filled by machines moving forward, that means there are opportunities for humans to innovate elsewhere and create a more impressive customer experience.
A strong example Passy used in his article is the movie theater. In most theaters now, you can buy tickets and reserve seats online, so there are fewer employees ringing up customers on-site. But because movie theaters have been able to automate the ticket purchasing process, there is more budget and bandwidth to improve food options and in-theater services. So even though there may be fewer ticket sellers at the movies, now we have ushers, waiters, bar tenders, and chefs to make our experience more enjoyable and borderline luxurious compared to older experiences.
This same principle could be applied to the grocery store model. There might be fewer humans checking out customers, but there could be more available help throughout the store or more brand representatives able to share details about featured products in the store. These are the offerings that make an experience feel tailored and high-end. These are the differentiators that encourage customers to keep bringing their business back through those automated doors.
It’s safe to say that Amazon’s Whole Foods acquisition is going to shake things up for grocers. But it’s the players that will choose to follow suit and adopt an IT-driven infrastructure that will remain competitive and keep their customers coming back for a next-level shopping experience.