By now you already know that Amazon is taking over Whole Foods. It’s big news and welcomed by many who think Amazon’s ownership of Whole Foods will be good overall.
As I’ve been thinking of this it’s dawned on me that there’s possibly a big long-term strategy that’s been revealed by this massive purchase. I’m going out on a limb with this, but here’s what I think.
Amazon wants to put most brick and mortar retailers out of business. Then, once they are mostly dead, they will come in and open their own retail shops.
It’s already happening in books.
The company started out aspiring to be the world’s largest bookstore (online). They’ve certainly achieved that and in the process have put most retail bookstores out of business or in serious trouble. Barnes and Noble made just 22 million dollars in profit for their last fiscal year coming off a 6.3% decline in annual sales. They expect further declines ahead. Guess what Amazon’s doing in response? Opening bookstores! You can see here that they already have 8 stores with 5 more on the way.
Now there’s nobody who’s a bigger Amazon fan than me. I’ve been a Prime member for more years than I can recall. I just had a box of coffee delivered to my house on a Sunday. I get a box of various sundries automatically delivered every month on the same day. I listen to Audible books continuously.
But, I’m starting to worry that Amazon’s end game is to put as many retail shops out of business as possible so they can put in their own stores. The reason they bought Whole Foods is because they couldn’t get serious traction going with their own grocery delivery service, but they obviously strongly believe in retail. At their size, they can basically buy who they can’t replace.
Is Amazon too much of a good thing? Do we really want to buy everything from them? What will retail look like in 10 years as Amazon enters fashion, food, appliances and whatever else comes to mind? I’d love to hear your thoughts on this. As SMBs and consumers, I believe we need to be concerned with the topic of Amazon dominance and talk about it.
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