June 29, 2017

What does Amazon + Whole Foods mean for retail technology?



The retail world was abuzz last week with the news that Amazon would purchase Whole Foods for $13.7 billion. Recent headlines have trumpeted the death of traditional retail as stores close, and some feared this development was the nail in retail’s coffin.  But it might actually be Amazon realizing that brick-and-mortar stores are an important element of success on the path toward sustained profitability.  


Either way, this is a good development for retail overall. It forces the less competitive retailers to understand that the arc of the technology curve is now focused on them and that access to modern technology will be a crucial element of their survival.  

A 2015 Retail TouchPoints survey, Metrics That Matter to Retail CXOs, reported that 44 percent of retail executives struggled to prioritize initiatives, and 47 percent said that IT issues kept them from achieving their business goals. But with Amazon likely to bring a wave of innovation to Whole Foods stores, other retailers will be forced to sharpen their technology initiatives and investments to compete.

Amazon specializes in personalization, anticipating shoppers’ needs and making helpful suggestions. Forbes contributor Bruno Aziza says Amazon will combine its personalization prowess with Whole Foods’ customer data to “reinvent and reengineer the process of buying, moving and selling goods.” For now, though, traditional retailers still have Amazon beat when it comes to physical shopping:

  • Consumers value the immediacy traditional retail provides — two out of three consumers head to a physical store after mobile research.
  • Shoppers like to see most product categories in person before they purchase. Seventy-two percent said they like to touch and feel a product before they buy.
  • Buyers like to talk with a helpful employee when they make a purchase: 40 percent said a knowledgeable sales associate improved the in-store experience.

Capitalizing on this advantage will be imperative for brick-and-mortar retailers, and investing in technologies that truly improve customer experience is key. Technologies like locationing will come into play as retailers seek new ways to encourage store visits, but other paths toward operational excellence will help retailers cut costs and increase efficiency and productivity.  

Automating tasks, like those involved with currency management, will allow retailers to give more manpower to customer experience. Amazon recently acknowledged the relevance of cash payments with its Amazon Cash service, which allows shoppers to prepay for online purchases in cash at brick-and-mortar stores. Tightening cash processes, eliminating opportunities for error and fraud, and ferreting out the hidden costs of accepting cash will give brick-and-mortar retailers an edge by keeping operating costs down.

As you investigate new solutions to improve operations and customer experience, be strategic. It’s tempting to rush to implement some of the more dazzling customer-facing technologies on the market, but instead, seek out a comprehensive platform that supports your business from behind the scenes. Look for one that easily integrates your existing systems and devices and can seamlessly include new technologies as you grow and adapt to market change. A platform will offer tight controls and comprehensive visibility to ensure you can easily govern store activity to maximize profitability.


Amazon will bring new life to retail by reimagining technology and pushing traditional retailers to do the same. How did Uber get to be the world’s largest taxi service without owning a single car? How did Airbnb become the biggest hotel chain without owning one property? By providing a platform to consumers that simplified and streamlined an existing process. To stay ahead of Amazon, that’s just what traditional retailers will have to do as well.




Image: iStock