Walmart and Google are teaming up in the wake of Amazon’s purchase of Whole Foods. So what is cyber-physical shopping really about? Are retailers who don’t team up with cyber-giants like Amazon and Google going to be seriously hurt in the battle for the buyers?
Amazon, Google, Whole Foods, and Walmart all claim they want to make shopping easier by making grocery shopping from Walmart and Whole Foods available online. Google is even offering a voice phone ordering service. Do people really hate grocery shopping so much they’d allow others to choose their groceries? Is this really the beginning of the end for stores that don’t have a cyber-partner?
Walmart and Google certainly have the numbers. Walmart currently has the lion’s share of the grocery market, with 14.5 percent. Walmart also has 4,700 stores in the United States according to NPR. Google is the largest gateway to the internet and has been for well over a decade.
Amazon is already a retail giant taking in 76 percent of all online retail according to Wired. Amazon has bought Whole Foods, a more niche-oriented grocery store. With only 2 percent of the grocery market, Whole Foods stores appeal to a pretty select clientele. Their top quality food products are often said to be pricey. Amazon, however, wants to change all that. Amazon is reportedly slicing Whole Food’s prices.
Whole Foods only has 470 stores in the United States, according to NPR, compared to Walmart’s 4,700 stores. With 10 percent of the stores, Whole Foods appear to be selling more groceries per store than Walmart, pricey or not.
While Google and Walmart attract the masses, Amazon and Whole Foods have accessed the elite few who can afford the best foods. However, if Amazon slashes Whole Foods’ prices enough, then just perhaps they could attract even more customers.
Whole Foods already has a reputation for being the best. If Whole Foods’ prices matched Walmart’s, and the number of Whole Foods stores expanded, they could possibly gain a greater foothold.
Google and Amazon certainly made interesting choices. Amazon could have chosen to team up with Walmart’s biggest grocery competitor, Kroger, who controls 7.2 percent of the grocery market share. Instead, Amazon bought out a niche grocery store with only 470 stores.
So why are Amazon and Google buying or teaming up with stores like Walmart and Whole Foods?
Does Amazon just want people to be able to afford to eat healthily by making Whole Foods affordable? Is it for the convenience of being able to use Whole Foods as a distribution point for Amazon orders?
Is Google really so excited about the new order by the phone technology that they want to test it on Walmart, the biggest retailer in the country? Do Google, Amazon, and Walmart just want to free Americans from the chore of grocery shopping?
Amazon is just using Whole Foods for data mining, alleged NPR, saying that many Amazon Prime customers shop at Whole Foods. NPR quotes an information expert, Professor Lee McKnight of Syracuse University.
“[Amazon] wants to tie those two databases or datasets together, which makes it more valuable, because now you have this more rounded picture of what the person is doing online and offline.”
Google and Walmart would be a masterful combo for data mining. After all, if there is anything at all Google could not find out about someone, Walmart might just have that information. But is there really any data Google doesn’t already have?
Amazon has chosen Whole Foods to be their partner, and quality seems to be the main thing Whole Foods is known for. Whole Foods, overall, seems more like an Apple kind of purchase, with its organic and pristine reputation.
With Amazon and Google teaming up with Walmart and Whole Foods, Lee McKnight feels other retailers might need a cyber-partner as well.
“If you’re not Walmart if you’re not Amazon and Whole Foods, who’s your cyber partner to make you stand out in this evolution? I’d be wetting my pants now.”
Walmart has always made it hard on their competition. Walmart changed the way people shop and effectively squeezed out the little guy more effectively than any other big box store or supermarket. Walmart wants to be the only store anyone needs and that has hurt local economies. Business Weekly cites a study showing that in 20 years’ time, a Walmart store decreases a community’s output by $13 million and costs that community $14 million in lost wages. David West, executive director of Puget Sound Sage, explained to Business Weekly.
“This study shows that communities will be much worse off, with lower wages and less money in the community, after a Walmart opens.”
But will Amazon’s purchase of Whole Foods hurt ALDI and other smaller discount grocery stores across the country as much as Walmart has? Well, only if Amazon slashes those Whole Foods prices considerably, spreads like wildfire, and cuts wages for Whole Foods employees.
Still, with Walmart teaming with Google and Amazon buying Whole Foods, perhaps local business communities should be concerned.
[Featured Image by Sue Ogrocki/AP Images]