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Barbara Thau , CONTRIBUTOR
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Target democratized high fashion and home design long ago. Now Amazon is knocking upscale food off its pricey perch and bringing it to the masses via Whole Foods.
While traditional supermarkets and discounters like Kroger and Wal-Mart have been selling “better,” affordable food for several years now, Amazon’s industry-shaking acquisition of Whole Foods last month is quite another thing.
Unlike Kroger and Wal-Mart, Whole Foods’ DNA is upscale premium products and prices, and a high-end brand perception.
Now Amazon is figuratively saying to shoppers who can’t shell out $5.99 for ornamental kale, “You too, can be a part of the foodie grocery club—at newly affordable prices.”
Amazon wasted little time cutting prices at Whole Foods (a.k.a. “Whole Paycheck”) on grocery staples like bananas and eggs while promoting the supermarket on its own website, juicing store traffic by 25%.
The Democratization of Designer Home Goods, Then Fashion, And Now Food
Amazon’s makeover of Whole Foods is reminiscent of how Target brought couture to its discount aisle with limited edition, lower-priced lines from designers like Jean Paul Gaultier.Target’s pioneering move to bring high-end names to everyday shoppers didn’t start in fashion but in the home department.
In the late 1990s, Target launched a housewares line from iconic architect Michael Graves, marking the beginning of its designer home and apparel collaborations. Later came fashion lines from Gaultier, Missoni, Lilly Pulitzer, among others, bringing products with high-end/high-brow roots to a mass merchant’s audience at discount-store prices — a new concept at the time.
But while being able to afford a lower-cost version of a Missoni sweater in its signature zigzag pattern is nice and all, the Amazon-ing of Whole Foods has deeper social and economic implications.
Eating well is expensive. Foods with perceived health benefits — fresh produce, meat and seafood, rather than prepackaged fare — cost more. And lower-income shoppers have long been deprived of quality eating options.
Whole Foods acknowledged this much back in 2013. That’s when the grocery chain started entering areas such as Detroit, setting up shop in food deserts, “an unlikely place for a Whole Foods,” Walter Robb, then co-CEO of the retailer, told me at the time. These poorer neighborhoods where life expectancy rates are lower don’t have ready access to healthy, fresh food.
The democratization of healthier foods is poised to spread exponentially with Amazon running things. Although Whole Foods currently operates only 460 stores, Amazon’s reach is massive, multidimensional, and includes the intangible space it holds in the consumer psyche.
The e-tailer is projected to account for 50% of all U.S. e-commerce sales by 2021; an estimated 64% of U.S. households are Amazon Prime loyalty members.
And although Wal-Mart is the country’s biggest retailer, Amazon dwarfs its product selection. Wal-Mart sells roughly 17 million products, a pittance compared to Amazon’s 357 billion, according to ScrapeHero. Now Whole Foods fare will add to that number, as its private-label food will sell on Amazon, just as Amazon lockers will be installed in some Whole Foods stores.
And who’s to say how the Whole Foods brand pops up in Amazon’s own growing fleet of stores?
Amazon’s lifestyle dominance — from changing how we shop (online) to how we read (via e-books) — and cultural influence – it owns The Washington Post and produces shows like Transparent — has earned it a prominent spot in the collective consumer conscience.
That influence is now spreading to how we eat. “We’re determined to make healthy and organic food affordable for everyone,” Jeff Wilke, CEO of Amazon Worldwide Consumer, said in a statement. “Everyone should be able to eat Whole Foods market quality.”
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