Amazon’s grocery swoop could ‘transform’ sector
Amazon’s buyout of Whole Foods Market could transform the groceries industry, Marks & Spencer’s top marketer has said.
In an interview with Campaign at t he Cannes Lions International Festival of Creativity last week, Patrick Bousquet-chavanne explained that the move will help Amazon’s strategy for a “quality supply chain” behind Alexa, its voice-activated personal assistant.
Amazon announced a deal to buy Whole Foods for $13.7bn (£10.8bn) two weeks ago. The premium supermarket chain will continue to operate as a standalone brand led by chief executive John Mackey.
Bousquet-chavanne, executive director of customer, marketing and M&s.com, said: “It’s a very strategic move for them, transformative potentially for the industry as a whole.
“Food online is not a new attempt for them – Amazon Fresh has been going for some time. The challenge is the economic model, the cost of the last mile.
“If you look at the network of Whole Foods, it’s less than 500 stores, so I don’t think they are taking a large retail footprint, which I think is very smart.”
He added that the move marks a “convergence of two opposite and yet complementary strategies” whereby traditional retailers are changing their business models to become fully omnichannel and the tech giants are trying to set up bricks-and-mortar retail operations.
Bousquet-chavanne explained: “We have to look across all the product categories while at the same time reshape the physical space to cater for the digital world. Then you have the digital pure-plays considering a physical retail play because we all know physical retail will always be there.”
Marc Pritchard, chief brand officer at Procter & Gamble, also praised the move. He said: “The brilliance of it is critical integration. In a way, what it means is every manufacturer has to step up their game.”