How Regional & Independent Grocers Should React to the Amazon/Whole Foods Deal

Whole Foods store. (Copyright: Getty Images.)

Mark down this date: June 16, 2017. That was the day it became even more critical for regional and independent grocers to become digitally focused. The Amazon announcement that it will acquire Whole Foods for $13.7 billion — its biggest acquisition ever — certainly heightens the need for grocery retailers to move faster in their digital efforts.

We’ve been saying it for some time. But now, when the biggest tech titan in the world appears to be tackling grocery retailing head on, you need to ask yourself: what must I do to keep pace?

We feel strongly you can control your own destiny by taking advantage of the brand equity and customer loyalty you already have – and using that to pursue your own “digital grocery” initiative.

What’s Loyalty Worth?

Local brands still matter and always will! Some 96% of grocery shopping still happens in brick & mortar stores. That means locally — in stores with locally known brands. Many of those stores have nationally known names, too, of course. But consumers know those names locally and regionally, and maintain strong loyalties to them.

More and more consumers are starting to buy groceries online. Nielsen predicts 20% of consumers will be buying groceries online by 2025. So, as the popularity of online shopping increases, regional and independent chains need to take advantage of the hard-won brand loyalty they’ve built up over the years with their consumers. Don’t let it go to waste!

A recent story in GEO Marketing looked at the Amazon/Whole Foods deal:

“Rival chains and independents should be thinking about finding partners that not only help them implement cutting-edge technology, but also help them think about how to operate in a new environment such as eCommerce,” it said, after interviewing GrocerKey.

“It requires an entirely different operational approach than they’re accustomed to operating in to serve their customers in-store,” GrocerKey CEO Jeremy Neren said. “It’s also important to consider that strengthening your digital presence does not simply mean eCommerce. It means providing more touchpoints to reach consumers — eCommerce is a component of that, but you must also consider how to augment the in-store experience via digital touchpoints such as value-added native mobile apps.”

Partner Up!

Yes, Whole Foods’ rivals and any regional and independent chains that haven’t implemented eCommerce should be finding partners to help them with cutting-edge digital technology. eCommerce requires an entirely different operational approach than you’re accustomed to. And building a digital presence goes beyond eCommerce.

What to learn more? Contact us today and we’ll tell you how you can become a digital grocer!