Amazon buys Whole Foods in retail game changer ๐Ÿ“น

Wayzata celebrates Hotel, worldwide commerce shifts during the same hour

This morning while I was attending the Ribbon Cutting Ceremony for Wayzata’s Hotel Landing–the news broke that Amazon, the e-commerce juggernaut, had acquired Whole Foods. It’s breath taking news to anyone who is interested or followed both the surge in e-commerce and the decline of traditional retail in America.

100 years from now, when the Wayzata Historical Society is looking back on the opening of the Hotel Landing, it will also be known as the day that Amazon bought Whole Foods and got local in the largest way possible as they try to duke it out with Wal-Mart for the supremacy on the sales of everything.

A New York Times article highlights the forces at play: “The online retailer (Amazon) is on a collision course with Walmart to try to be the predominant seller of pretty much everything you buy. Each one is trying to become more like the other–Walmart by investing heavily in its technology, Amazon by opening physical bookstores and now buying physical supermarkets… …their rivalry sheds light on the shifting economics of nearly every major industry, replete with winner-take-all effects and huge advantages that accrue to the biggest and best-run organizations, to the detriment of upstarts and second-fiddle players.

What does it mean for retail in Wayzata?

Let me start by saying it’s not good news for retailers in Wayzata who have already been struggling to keep up with Amazon, it’s Shakopee warehouse, the United States Postal Service, UPS, FedEx and the like. While up until now the concern has been for predominantly mom and pop shops in Wayzata who are not able to survive, it now appears even bell weathers like Lunds & Byerlys are in the cross hairs.

Local retailers and restaurateurs should weigh very carefully any planned and strategic partnership with Amazon who is vendor and competitor at the same time–stealing analytics, keywords, and intellectual property and using it to control the results in Google.

A blanket of conglomerate entities control:

  • The internet pipeline to your home with the vendor selling your web browsing history (In Wayzata – Mediacom)
  • All browsing and search history including friends, family members, interests (Google, Facebook)
  • Deflationary price pressure on all consumer goods via Amazon’s data collection, pricing and delivery prowess, and distribution centers within a couple of miles of your home
  • Couple that with Wayzata’s lease rates / real estate prices and it becomes apparent that local retail is going to be very challenging in the future

Amazon is targeting the Food Supply and everything else with deflationary pressure

CNBC analyst Sara Eisen posed the following points in terms of the competitive threat this represents: Kroger, Target, Costco,

  1. Amazon has deep pockets, which means that they can lower prices on food costs and an industry already facing enormour price competition is now shocked with even more pressure on profit margins
  2. The downward pressure on food prices may gain new customers in the organic segment and take them away from traditional grocers and retailers and food companies
  3. They could bring Whole Foods on a much larger scale as Amazon Prime has complete national scale online

What does this mean for future of retail? Is the future a blend of e-commerce and physical location? What kind of pressure is this going to put on General Mills and Cargill two major employers in our area heavily involved in the food business?

Amazon has also received a patent to block you from comparison shopping on your phone while in the store entitled “Physical Store Online Shopping Control.” The company can sense when a smartphone user is trying to access a competitors website from the store enabled WiFI network. Expect even more control to occur on your mobile device in the future, as entry into a store will likely require the consumer to consent draconian terms of service in order to shop physically within the store.

Local leaders have been worried about the effects of Total Wine opening at Ridgedale and competing with Wayzata Wine & Spirirts on a small scale. They should be far more worried about what appears to be a Rockefeller / Standard Oil like desire to control every aspect of the retail chain.

Jim Cramer detailed the phenonmenon on CNBC this morning, “This is it, this is what everyone was wondering might happen. They (Amazon) will dominate food within the next two years. Wow!

The coming effect on retail is mind boggling. Stay tuned to Wayzata.com for even more on this developing story.

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