It took Amazon founder Jeff Bezos only 46 words this morning to explain why his company has agreed to buy Whole Foods Market for $13.5 billion. Bezos kept his remarks vague enough, however, that everyone else can't stop speculating about the deeper meaning of this grocery mega-deal.
What big insights deserve the most attention? I've been culling through everything from the top newspapers' coverage to a feisty assortment of blog posts, tweets and reader comments. Amid all this chatter, here are five insights that stand out.
- Someone moved my Camembert! For long-time Whole Foods shoppers, the notion of any changes at their favorite grocery store is as distressing as long-line tuna fishing. You can find much indignation and anxiety in the comments section of The New York Times. Overblown worries? Probably. Bezos's general pattern in acquisitions has been to leave management teams alone (i.e. Zappos) or to ramp up growth and quality (i.e. The Washington Post). Even so, today's anxieties can't be ignored. As William C. Taylor argues in a Harvard Business Review post, "with great disruption comes great responsibility." Amazon will need to deliver more than press-release promises if it wants Whole Foods' existing customers to accept the transition.
2. Traditional grocers should be calling emergency board meetings this weekend. On its own, Whole Foods accounts for less than 2% of overall grocery sales in the U.S. But the big-time arrival of Amazon in the grocery business triggered a massive selloff of food-retailers' shares today. As this recent Forbes piece points out, Amazon has been out-innovating all kinds of leading retailers for the past two decades. The Amazon formula of expanded selection, lower prices and enhanced customer appeal can be very tough to beat.
3. America wants faster checkout lines. One way or another, Amazon will oblige. A great way to take the pulse of American shoppers is to look at the annual customer-satisfaction surveys conducted by the University of Michigan. Last year's report indicated that grocery shoppers were pretty happy overall with convenience and quality -- but were most likely to grumble about the speed of the checkout process. Self-scanning systems often malfunction; checkout clerks make do with the same tools they've had since the 1990s. Amazon's inventive engineers won't let the status quo persist for long.
4. Whole Food's real estate, by itself, makes the deal compelling. We can go dizzy trying to track all of Amazon's initiatives to speed up deliveries and position inventories closer to customers. To some extent, it doesn't matter whether we're focused on drones, Amazon Go, Amazon Fresh or other variants. No matter what piece of Amazon's big strategy matter most, having access to more than 400 Whole Foods stores situated in prime urban or suburban locations is bound to be a plus.
5. "I work in grocery" is the new "I work in tech." That snappy insight comes from Aaron Levie, the quick-witted software pioneer who founded Box.com. Wordplay aside, he's making a deeper point. It's been a long time since grocery stores attracted top-flight talent. Low wages and an inability to improve productivity have fed on themselves. If Amazon sees $13.5 billion of opportunity in the grocery business, perhaps other people will, too. Whether you're a shopper, a city planner or just a citizen concerned about the imperiled state of everyday jobs, a talent infusion can't happen fast enough.
