Presentation video - https://www.youtube.com/watch?v=dXIWcKyIpT8
In what was the biggest purchase in Amazon history, the online retail giant swallowed up grocery chain Whole Foods for a small sum of 13.7 billion dollars.
The news streamed in last week was very well documented but, with this massive move into grocery, what does this mean to us in advertising? What about the companies our agencies represent?
This keynote covers the perceived strategy behind this acquisition and focuses on how this move is set to change the categories and brands we work with each day.
Difference Between Search & Browse Methods in Odoo 17
Amazon's Purchase of Whole Foods - Impact on Advertising and Marketing Industries
1. Amazon + Whole Foods:
What does it mean for us?Analyzing the historic purchase that is set to transform industries.
Carter JensenPublic House - June 27, 2017
2. A Quick Warning
Presentation previews, like this, are only a small portion of the
overall keynote experience. Some slides may seem to be lacking
or bare. That is by design.
Many of the visuals included within are simply meant to spur
thought and further support the intended conversation.
With this said, enjoy! I hope this preview gives a good idea
of the journey I look to bring audiences through and the
inspiration that can come from a presentation like this.
4. Amazon.com’s objective is to be the leading online retailer
of information-based products and services, with an initial
focus on books.
Our vision is to be earth’s most customer-centric company;
to build a place where people can come to find and
discover anything they might want to buy online.
We seek to be Earth’s most customer-centric company.
Before we start…
Amazon wants to take a cut of all economic activity.
5.
6. A Solid Move
Strategically driven acquisition leads to new opportunities.
What Happened?
So, can we address what happened last week?
An Odd Purchase
The acquisition was out of character.
The Industry Effect
How is Amazon eating the world and what do we need to know?
Next Steps
Determining actionable takeaways.
25. Grocery is hard.
E-commerce can win on selection.
Sit in warehouse forever.
Constant across all channels.
Easy shipping.
Expire quickly.
Variable, involved product.
Shipping difficulties.
Groceries are a fundamentally different problem that need a fundamentally different solution…
Ben T / Exponent
29. The Obvious
Retail FootprintIn later-2016, Amazon announced plans to unveil a mobile-checkout-based
grocery store in Seattle, and it has opened bookstores in cities such as New
York and Chicago.
By acquiring Whole Foods, Amazon gains some 465 physical stores to
build out its vision for the future of retail.
Time
33. The Obvious
Faster Delivery
Amazon’s services promise to deliver certain products, ranging from paper
towels to electronics, in an hour or less by sourcing them from 70 local
fulfillment centers.
With its purchase of Whole Foods and the hundreds of grocery stores it
operates, Amazon has an opportunity to expand the products it can
deliver under Prime Now.
Time
34. The Obvious
Better Grocery Selection
Adding Whole Foods' selection of items to its AmazonFresh grocery-delivery service
could give the company an advantage against quickly rising competitors such as
Peapod, FreshDirect and Google.
Time
36. Whole Foods is a new
customer. Amazon paid
for its supply chain.
With the addition of Whole Foods to the Amazon portfolio, the
online retailer has gained an incredible supply chain of fresh
foods. This new resource, paired with the scale of Amazon’s
commerce services will provide near-infinite opportunities.
Whole Foods, as a grocer, will be looked at as just one, of many,
customers to help feed the demand for this new structure.
37. Customers Amazon Delivery
Services
Restaurants Schools Anything
Amazon Grocery Services
Modular
Suppliers Store Brands Name Brands Localized Suppliers Regional Suppliers Small Business Anything
Groceries Fruit Vegetables Meat Non-Perishables Supplies Etc.
Ben T/ Stratechery
46. Amazon is doing it’s best to become Walmart
before Walmart can become Amazon…
47. 13.7 Billion is a lot of money.
Nothing compared to the lifetime value to a prime customer.
48. Overall Stronger Home Presence
Amazon already sells buttons you can press to magically reorder household items, wands
you can wave over a product's barcode to add it to your shopping list and more. All these
gadgets act as clever ways to point consumers to Amazon's online megastore; the addition
of Whole Foods’ groceries only makes it more appealing.
Business Insider
49. Amazon did not buy a retailer…
The bought an entire customer.
51. Back in 2006, when the iPhone was a mere
rumor, Palm CEO Ed Colligan was asked if
he was worried…
Stratechery
“We’ve learned and struggled for a few years
here figuring out how to make a decent
phone,” he said. “PC guys are not going to
just figure this out. They’re not going to just
walk in.”
52. Apple reduced the phone to a simple app.
What will Amazon do to grocery?
54. Delivery will just be one simple offering, and Amazon will
dominate. Unlike Instacart, whose business model is built
upon another business entirely.
55. With a diversity of meal-kit options available fresh from
Whole Foods, Blue Apron is set to gain significant
competition from the recent acquisition by Amazon.
57. Expansion of Preexisting Services
Pickup | Delivery | Pricing Structure | Member Benefits
Key to Amazon is the supply chain and other logistics behind the scenes.
58. Prime Offerings Bridge to Physical Retail
Consumer and Business Effects
Pricing | Delivery Options | Diversity of Product | Data | Zero Margin Theory
62. Grocery home delivery is
still incredibly difficult.
Competing retailers may still have time to maintain
and develop an edge over Amazon. The acquisition of
Whole Foods alone will not instantly make grocery
delivery a success.
63. Reinvention, especially
in grocery-related
categories, will be key.
In a notoriously stagnant category, reinvention will be
key to survival. The entry of Amazon into the
marketplace will spur action, developing a need to
adapt in order to stay relevant.
64. This is not just an impact
on grocery, it is an
impact on all of retail.
With the acquisition, Amazon now has direct access to
nearly all U.S. consumer wallets, eliminating the need
for many to go anywhere else for purchases.
65. The emerging
omnichannel model.
We must realize that retailers cannot survive solely
through e-commerce or only through brick-and-mortar
– it must be a combination of both.
Walmart is not the future of retail nor is Amazon the
future of e-commerce, brands today must evolve to
offer customers a seamless experience in both online
and physical worlds.
This will be no small task for retailers to accomplish.
Sadly, a fairly large number will not make this
transition. The stakes have been raised.
66. Focus on the
experience.
Whole Foods was catered, specifically, to the overall
customer experience. A strategy that has served them
well and continues to align with emerging customer
demands. As retailers look to future success, they must
maintain a focus on this experience, an offer that is
very difficult to mimic via online channels exclusively.
68. 1. Escalate points of differentiation with a new mindset of
rapid transformation to the demands of the modern
customer.
2. Maintain a focus on the experience. Amazon could not
compete, so they put up the cash to buy-in.
3. Focus on Amazon. We may be able to beat them in some
categories, but we also must join them where possible. Be
a consumer and a brand expert, from both sides of the
equation.
4. Focus on the competitors. It’s a big world and we are not
alone in the fight. Download Jet. Dissect some of your
favorite retailers. Amazon is not perfect.
Points of Action
70. Amazon + Whole Foods:
What does it mean for us?Analyzing the historic purchase that is set to transform industries.
Carter JensenPublic House - June 27, 2017