THE SYMBIOTIC RELATIONSHIP BETWEEN AMAZON AND WHOLE FOODS

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A few months ago, Amazon purchased Whole Foods.  In my view, it was a good “save” for Whole Foods – whose management had been floundering for years, taking down a company that had had a very promising start and was popular with customers.

Now, Amazon has brought Whole Foods back to life by lowering prices and making other organizational changes.  But, also, Amazon wouldn’t be Amazon unless they were working to enfold the Whole Foods customers into their online network.  Thus, they encourage Amazon Prime membership to these customers by offering Prime members free 2-hour delivery for Whole Foods orders over $35.   And they provide 10 percent discounts on sale items at Whole Foods stores, plus offering weekly discounts.  The process goes both ways – Whole Foods customers are drawn into the Amazon processes, such as Prime membership, and Prime members who have in the past had no reason to shop at Whole Foods now have reason to do so.  The push in both directions can also drive customers to other of Amazon’s businesses such as the pharmacy operation and a wide variety of products online not offered at the Whole Foods chain.  There is speculation that this arrangement represents such a positive, symbiotic relationship that Amazon will move to enhance it by expanding their number of Whole Foods stores.  Currently, there are 484 stores in the U.S.; speculation has it that Amazon might be aiming for 1,500 nationwide.  Onwards and upwards – Amazon is always focused on enhancing their singular view of the business world: Comparing money that customers spend on Amazon to the money that is not spent on Amazon.  Expand the former; diminish the latter – simple!

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