The New York Times reported on Friday that Amazon is buying the Whole Foods grocery chain for $13.4 billion, and the blockbuster deal has become the front page story on the pop culture scene over the weekend. The one big question about the acquisition that remains unanswered, however, is what exactly the online retail giant wants the upscale supermarket chain for. The probable answer can be determined by rounding up a few of Amazon’s prior pursuits, and it not only awe-inspiring but has legitimately huge ramifications for the future of the entire retail industry.
Although non-edible items have traditionally been Amazon’s specialty, it is not a complete stranger to groceries. In fact, the corporation founded by Jeff Bezos has launched culinary ventures on three separate occasions.
Amazon Go is the first of these ventures. In 2016, writes Business Insider, Amazon opened a physical grocery store in Seattle, but with a big twist on the traditional shopping establishment formula: there were no cashiers. Customers had to open the Amazon Go app on their smartphones and scan a special QR code at the door that would log them into their Amazon account before entering the store. Using a combination of computer communication and sensor technology, Amazon’s app would be able to tell when the customer took any item off the shelf. It would then put that item in a digital shopping cart associated with their Amazon account. When they left the store, each of the items they picked out while inside would be charged to the credit card or balance Amazon had listed for the customer’s online account.
The one Amazon Go location opened last year in Seattle was a sort of alpha test, open only to Amazon employees, but the company said when they announced the idea that they would be opening more stores of the same type to the general public “in early 2017.” It may have taken Amazon a bit longer than they had expected to iron out the wrinkles in Amazon Go before public release, but Friday’s Whole Foods purchase seems like it just might mean the time has finally come for the futuristic idea to be unleashed on the nation.
Another of Amazon’s forays into the alimentary domain is Amazon Fresh. Founded in 2007 and rolled out slowly over the past decade, reports Ars Technica, the service allows customers willing to pony up some extra money to order groceries online and have them delivered to the customer’s home. Since the available products, such as milk of meat, are perishable, they are kept fresh during shipping and are generally delivered within twelve hours if needed.
It was just this March that Amazon launched Fresh Pickup, a physical convenience store that allows customers to pick up their grocery orders there. The upsides are that it is cheaper than the Amazon Fresh service that delivers to your door and it is even faster — you can have your pickup ready at the store within 15 minutes of placing the order.
A third Amazon grocery shopping option is Amazon Pantry. It is not strictly limited to food but to all groceries instead, and it simply allows for a wider selection and faster delivery time of such products than normal Amazon.
Now imagine all three of these services — Amazon Go, Fresh, and Pantry — being merged into one store. Maybe the automated shopping made possible by Amazon Go would make up the majority of the shopping experience, while delivery windows in the store would be present for the other services. And now imagine every Whole Foods location in the country (Quartz reports there are 430 of them from coast to coast) becoming one of those futuristic Amazon hubs. It would certainly be the talk of the town in any community that got one.
Brown Political Review notes that the establishment of nearly 500 automated grocery stores would do more than just get people talking, though; it could cause huge waves in the retail industry at large. If the “automated retail location” idea is popular and takes off, it will result in the loss of millions of jobs in retail locations across the board, not just in grocery stores. The Bureau of Labor Statistics reports that about 10 percent of Americans work in the retail sector, and most of their jobs will become unneeded if sensors and computers are taking care of most consumer needs.
The gargantuan business transaction announced on Friday may go down in history as the beginning of a new era for American industry. Hold onto your hats and stay tuned to the TInquisitr for more updates on Amazon’s grocery business as they are made available.
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