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Echo: It’s Omni-Channel Time – Amazon’s Purchase of Whole Foods

By : Dirk Izzo

June 17, 2017 05:01 PM

Today, Amazon unveiled plans to purchase its first bricks and mortar retailer by announcing its intention to acquire Whole Foods Market. This announcement sent shockwaves through the retail industry and from my vantage it underscores an important shift we’re seeing throughout the retail space -- the coming together of the digital and physical worlds (i.e. the omni-channel experience).

 

At NCR, we view this news as yet another step by one retailer (albeit a big one) toward the omni-channel environment that consumers want.  From our perspective, consumers want a blended retail experience that caters to their taste, timing and physical proximity. In some instances, they want their replenishable goods delivered to their doorstop and other instances they want to touch and feel a product before they purchase.  Today’s move by Amazon, much like you are seeing with other large grocers and retailers, is to better position itself to meet the consumers buying interests, on their terms.  It certainly also helps Amazon better meet their “last mile” challenge.  If the deal goes through, Amazon’s new retail presence is likely to serve as an incubator for determining how the online titan can better meet consumer purchasing desires when it comes to consumables while also capturing as much of the $800 billion grocery business as they can. 

 

At NCR, we see this as a winning combination for retailers generally. The center of grocery stores where consumers shop for replenishable goods such as paper towels, cleaning products, bottled water and the like will be significantly reduced in the future because consumers will choose to purchase those online and have them delivered to their doorstep. It’s a store plan modification that will allow Amazon to use the newly created open space to do more localized fulfillment and for staging just in time delivery.    

 

This is a game changer other retailers will be paying close attention to. With the addition of more physical locations to serve their customers, Amazon has the potential to deliver a whole new level of consumer experience by leveraging this added channel.  They are best positioned to make the digital-physical experience shine. Omni-channel is about transacting with consumers on their terms and also providing the retailer the opportunity to engage with a consumer in a personalized manner.

 

If done right, the benefits for retailers and consumers is huge.  Take me for example; I’m a big fan of oatmeal for breakfast and I have a particular brand I like best. In an omni-channel environment as I browse the oatmeal aisle, the technology in the store and on my phone will know my buying preferences and it can send me a coupon or a special offer that will incentivize me to try a different brand. It’s how food manufacturers can partner with retailers to grow revenues and acquire new customers.

 

Physical and digital channels are required to reach the mass-market in the most effective ways; even in an increasingly digitized world.  Ultimately, the most effective go-to-market for most businesses require both physical and digital channels to work seamlessly and efficiently on behalf of the consumer.  Amazon’s announcement today places them in the center of the super competitive grocer space with a unique omni-channel offering. 

 

At NCR, we have been at the center of innovation for nearly 135 years. It has been part of our strategy to help our customers cross the divide between physical and digital. We know a good retail play when we see it and this proposed deal could serve as a true accelerator of the omni-channel experience for every retailer.  

 

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