Earlier this year, Amazon shook up the retail world with its acquisition of Whole Foods. What could the online giant and the high-end grocer possibly have in common – and how could they help each other?
Our survey soon after the announcement showed that many consumers were already shopping from both retailers. Hopes were high for a cross-pollination of services and ideas; consumers’ wish lists included more high-tech devices in store and free grocery shipping for Amazon Prime members.
These first-level priorities may take a while to fully develop, and some may never come to pass. So how does the Amazon/Whole Foods match square with the ways people are shopping today? Does the alliance make dollars and cents in the 2018 marketplace – as well as 2025 and beyond?
The latest results from our annual FutureBuy® study provide a fresh impression of how people are searching for and buying products of all types; and our data shows why Amazon’s big move into grocery may have been more than prescient. Here are four insights from FutureBuy that show how Amazon and Whole Foods can take their synergies to the next level.
- Omnichannel shopping rises in FMCG
Though the US has long trailed other regions in online shopping for everyday household items, American consumers are catching up. Four in 10 (40%) US shoppers said they used both in-store and online resources (“omnishopping”) to hunt for beauty and personal care products – up from 32% last year. We also saw notable omnishopping jumps in
- Packaged-food and beverages: 23% (up from 14%)
- OTC healthcare: 27% (up from 21%)
- Household washing and cleaning products: 25% (up from 15%)
If shoppers are ready to hunt for their daily home and personal needs online, then the worlds of Amazon and Whole Foods are already merging.
- “Webrooming” tops “showrooming”
According to the new FutureBuy, shoppers are almost twice as likely to search for a product online and then buy in a store (“webrooming”) as to research in-store and then buy online (“showrooming”). This means that being in both worlds – bricks and clicks – gives you a much better chance of capturing a sale, and of building brand recognition and trust throughout the purchase journey.
- Click & collect has a bright future
In the US, 40% of shoppers expect to rely on click and collect services – which allow in-person pickup of online purchases – more in the coming years. One in six (16%) shoppers is already using click and collect regularly, up more than 50% from last year (10%); and Generation Y (ages 27 to 36) is most likely to embrace the service, while Boomers are showing the slowest uptake. For groceries specifically, Gen Y is more likely to regularly use click and collect – and to report a higher anticipated use in the future. All of this evidence suggests that Whole Foods locations will grow in importance as pickup spots for Amazon purchases.
- Consumers warming to targeted ads
Though some remain skittish about data privacy, shoppers increasingly are embracing the perks of online tracking and targeting. More than four in ten (43%) say they like it when a website keeps track of their visits and recommends products – up from 35% last year. And almost one-third (30%) like it when retailers contact them on their smartphones when they are out shopping. With its in-store environment and rich data from online and in-person purchases alike, Amazon/Whole Foods will become the master of targeting across the bricks and clicks world.
Of course, some services and ideas will not be truly proven until they are launched; then consumers can vote with their wallets. But from the perspective of today’s shopping mindset, the future belongs to Amazon’s new in-store/online hybrid.
Joe Beier is EVP, Shopper & Retail Strategy at GfK.