With the news today that Amazon would be purchasing Whole Foods in a deal valued at $13.7 billion, the online retailer has made a clear commitment to physical retail. Amazon has experimented with grocery store concepts in the past; we reported on their checkout-free Amazon Go concept store late last year.
But more importantly, Amazon now has a brick-and-mortar foothold in valuable locations around the country where well-heeled, tech-savvy Millennials and Gen Xers are raising families and shopping for all kinds of items - not just organic groceries. Amazon was also recently granted a patent for software that prevents in-store shoppers from comparing prices online, suggesting that their commitment to physical stores is strong enough that they are willing to put time and energy into stemming the showrooming trend that has plagued other retailers.
Amazon maintains that, for now, Whole Foods will retain its current branding and identity. And with Whole Foods' trusted brand and name recognition, this sounds like a savvy short-term move. Amazon's greatest strengths are in back-end software, logistics and distribution, and these could be used to improve the stores' performance behind the scenes while also turning them into distribution points for the existing Amazon Fresh online grocery service.
With this acquisition it seems certain that Amazon is going to become a much bigger part of its more affluent customers' lives in the coming years.