Amazon delivers latest Prime perk to Whole Foods’ curb

Discussion
Photo: Whole Foods
Aug 08, 2018
George Anderson

Amazon Prime members across the country may soon have a new way to get their groceries. The company announced it is rolling out grocery curbside pickup at Whole Foods in Virginia Beach, VA and Sacramento, CA.

Subscribers to Amazon’s program already have the option of receiving free Prime Now deliveries from Whole Foods within two hours of ordering in 24 markets across the U.S. Amazon plans to expand curbside pickup to Whole Foods locations already offering home delivery.

“Different customers have different needs,” Tanvi Patel, head of business development for Prime Now, told USA Today. “Customers prefer the convenience to pick up groceries on their way home, on their way to the park or on their way to a friend’s house.

Curbside pickup from Whole Foods is available between 8:00 in the morning and 10:00 at night. Prime members park in a designated area and mark their parking spot in the Prime Now app. Pickup is free on orders of $35 or more. Those with orders under $35 pay $1.99, while those who need to pick up groceries inside of 30 minutes pay $4.99.

Amazon and Whole Foods are relatively late to curbside pickup, with plenty of the retailers’ grocery competitors already offering a similar service. Amazon’s decision to offer the service, however, may have less to do with Kroger, Target, Walmart, etc. and more to do with its own Prime members.

Estimates put the percentage of Prime members who shop at Whole Foods at 20 percent. In June, Mark Mahaney, the lead internet analyst for RBC Capital Markets, told CNBC that as many as 30 million Prime members live near a Whole Foods, but don’t shop at their local store.

By offering added discounts and services such as home delivery and curbside pickup, Amazon is attempting to convert more of its Prime members into customers of its grocery chain. RBC’s Mahaney believes the result could be a doubling of Whole Foods’ customers within the next five to 10 years.

DISCUSSION QUESTIONS: What do you see as the keys for Amazon to attract Prime members to Whole Foods? Will free curbside pickup to be a significant draw for Prime members to shop at Whole Foods?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"It will take time and significantly lower prices to change people’s overall impression of Whole Foods."
"While this service is not new or revolutionary, it’s just one more reason for Prime members to switch."
"This strikes me as a benefit to certain customers but a logistical nightmare for Whole Foods."

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15 Comments on "Amazon delivers latest Prime perk to Whole Foods’ curb"


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Mark Ryski
BrainTrust

I have no doubt that the percentage of Prime members who switch to Whole Foods will only increase as Amazon continues to offer new services like free curbside pickup. While this service is not new or revolutionary, it’s just one more reason for Prime members to switch, and if there’s one thing Amazon is especially effective at it’s leveraging its very loyal Prime membership base.

Jeff Sward
BrainTrust

I’m a Prime household in the process of switching more and more grocery shopping to Whole Foods. An astute shopper can find plenty of value at Whole Foods. And Amazon keeps making it easier. Now if Whole Foods could only replicate the amazing sourdough bread at my other grocer. A couple of superior products will keep me shopping at my current store. Double win for my household.

Neil Saunders
BrainTrust

This is a useful service but it is not revolutionary; many other grocers already offer this. While I am sure that it will help Amazon grow the number of Prime shoppers who go to Whole Foods, much more work is needed to drive sales. As much as I hate to be a stuck record, the main issue is still price: Whole Foods is out of kilter on many everyday items and until this is corrected, growing shopper numbers and spend will remain challenging.

Chris Petersen, PhD.
BrainTrust

No surprise here on accelerating pickup at Whole Foods. The surprise is that it took this long. It is also clear that Amazon realizes that it must compete with Walmart and the grocery chains on convenient pickup. However, this is not just another grocery pickup model. It is another component in building and leveraging the Prime ecosystem. Whether it is Whole Foods pickup, Amazon Fresh delivery or streaming music and movies, Bezos’ ultimate goal is to make Prime so attractive and relevant that it would be almost impossible to resist becoming member. Said another way, this is a cog in the Prime machine and very effective at leveraging profitable members.

Cathy Hotka
BrainTrust

This strikes me as a benefit to certain customers but a logistical nightmare for Whole Foods. Here in steamy DC it will be 95 degrees this afternoon; how will Whole Foods handle an order that includes milk, butter, ice cream (things that conceivably could be held in a freezer case) and fresh corn and tomatoes which shouldn’t be kept in a freezer?

Steve Montgomery
BrainTrust

Curbside pickup for the supermarket industry might have once been needed to win service but today it’s almost needed to play. Will its addition to the list of benefits for Prime member influence some customers to do some or more of their shopping at Whole Foods? Perhaps but not in significant numbers. Those Prime members that are willing to pay the price at Whole Foods are likely already doing so.

Meaghan Brophy
BrainTrust

I see price point as being the reason more Prime members don’t shop at Whole Foods. Amazon Prime members love a good deal, and Whole Foods still has the “Whole Paycheck” stigma. Conveniences like home delivery and curbside pickup will help attract a few more Prime customers, but it will take time and significantly lower prices to change people’s overall impression of Whole Foods.

Ken Lonyai
BrainTrust

Curbside pickup at Whole Foods is no game-changer and is, in fact, catch-up to others like Walmart that have been offering the service.

As a twice-weekly Whole Foods shopper, I see firsthand that if they want to get past curious Prime shoppers and build a sustainable base, they have deeper problems. Just last week we bought the same brand, same SKU item at regular price from a competitor and saved 25 percent. It was organic but had nothing to do with the organic price myth because it was the same organic product. Instead, it was Whole Foods overcharging. Coupled with OTS (order-to-shelf) inventory problems and increased employee turnover, Prime gimmicks are not going to keep customers shopping there, a sentiment echoed colloquially by a couple of local employees we know.

Ken Morris
BrainTrust
Ken Morris
Principal, Boston Retail Advisors
1 year 1 month ago

Giving customers more options for obtaining their grocery orders is a smart strategy, as everyone has their own preferences. Curbside delivery may attract a few more Amazon Prime members to try Whole Foods, but I doubt it will move the needle much.

The biggest obstacle for attracting new customers to Whole Foods is the pervasive perception that their products are too expensive. Amazon has offered discounts to Prime members for certain items, but it hasn’t been enough to attract more customers to switch to Whole Foods. Consumers are creatures of habit and it takes a lot to change habits!

Richard J. George, Ph.D.
BrainTrust

First, is anyone surprised by this move? This is one area where Amazon/Whole Foods has lagged behind traditional food retailers. Second, Whole Foods’ image as fresh and natural gives it more credence for the picking of perishables than might be the case with Amazon Fresh. Third, click and collect always presents the opportunity for a quick visit into Whole Foods for some unplanned, high-margin products.

Shep Hyken
BrainTrust

Reasons for Prime members to do business at Whole Foods:

  1. It’s Amazon! The customers are already members and do business with Amazon. There’s a reason they pay an annual fee. They like what Amazon offers.
  2. Discounts. Prime members get discounts that non-members don’t.
  3. Convenience. Amazon is all about making doing business with them easy. Curbside pickup of an advanced order is very convenient.
Camille P. Schuster, PhD.
BrainTrust

Attracting more Prime members to shop at Whole Foods means more business for Whole Foods. If the market for delivery or pickup is growing and Amazon makes Whole Foods a competitive player and if Whole Foods’ prices go down, the number of people shopping at Whole Foods could significantly increase.

Lee Peterson
BrainTrust

Home delivery of groceries is THE battlefront between Amazon and Walmart going forward. 53 percent of Walmart’s business is grocery and they simply must protect that. If Amazon bites into their grocery business due to home delivery, it’s going to be a long road for Walmart going forward. BUT, if Walmart can do it first: that’s a different story.

gordon arnold
Guest

These are all great perks for the faithful fewer. The purpose of the proposed exercises is to attract and hold more market share. Utilization of ceremonial promotions that require commitments beyond a single participation rarely provide abiding growth. It may be time to re-badge and drive Whole Foods in the direction of the seemingly price driven customer(s).

Susan Viamari
BrainTrust

Whole Foods shoppers are largely motivated by quality, and Prime members are largely motivated by convenience. If Amazon and Whole Foods can find a sweet spot that integrates the two and price it right, they will grow a broader shopper base. Like many have commented here, traditional offline stores are racing to catch up to e-tailers, and e-tailers are racing to catch up in brick and mortar. As a consumer, it’s a fun race to watch and reap the benefits of convenience, personalization and savings.

wpDiscuz
Braintrust
"It will take time and significantly lower prices to change people’s overall impression of Whole Foods."
"While this service is not new or revolutionary, it’s just one more reason for Prime members to switch."
"This strikes me as a benefit to certain customers but a logistical nightmare for Whole Foods."

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