Dive Brief:
- Amazon announced it will sell Amazon devices like its Echo, Fire TV and Kindle e-reader at more than 100 Whole Foods stores ahead of this holiday season, according to a news release.
- Amazon will also launch pop-up shops at several Whole Foods stores beginning Nov. 13. The shops will feature Amazon devices as well as staff members offering demos and promoting the company’s Prime, Prime Video and other services.
- To promote its devices, Amazon is running $20 and $30-off discounts on its various products. “These collaborative programs are another step forward in the integration between the companies,” the company said in the release.
Dive Insight:
When Amazon took over Whole Foods on Aug. 28, it put up a display of Echo Dots in every store along with a sign reading “Farm Fresh.” The company took a good deal of ridicule on social media for the move, but that doesn’t appear to have deterred it from selling more devices in its newly acquired grocery stores.
Whole Foods, unlike Costco and Walmart, has a very limited selection of nonfood items, including its Whole Body section, and is not known as a seller of gadgets. So putting Kindles and Fire TVs in with local produce and bottles of olive oil seems like an odd decision.
Then again, these are in-demand products being sold to a customer base that includes many Amazon shoppers and Prime members. Moreover, Amazon’s desire to get its devices in front of consumers this holiday season outweighs any concerns over cross merchandising do’s and don’ts. The e-tailer spent $13.7 billion on a network of retail stores, and it intends to get its money’s worth.
Grocers seem increasingly open to the idea of selling more general merchandise in their stores. Kroger just announced it will launch a clothing line next fall, while Hy-Vee currently sells apparel in select stores. Lidl features a wide selection of nonfood items in its stores — everything from car mats to lawnmowers. Critics, though, argue the discounter stocks too many of these products.
Amazon’s holiday plans certainly raise questions about how much the company might change Whole Foods stores. It’s not hard to imagine Amazon making devices, demo booths and other offerings permanent fixtures inside the stores. Some wonder, in fact, if Whole Foods will become more like Apple stores in their showcasing of company technology.
The move also serves as more evidence that Amazon is less interested in burnishing the Whole Foods brand than in making Whole Foods part of its broader grocery platform. Already, Amazon seems to be prioritizing national brands over local and niche products.
Analysts with investment firm Barclays noted an uptick in sales and promotions centered on these larger brands. Amazon’s chief financial officer Brian Olsavsky, meanwhile, during a conference call following its recent third-quarter earnings report, hinted there will be “a lot of integration, a lot of touch points” involving Whole Foods, AmazonFresh, Prime Now and other services.
