Amazon Buys Whole Foods: Hip, Hip Hooray For CX!

In case you missed it, Amazon.com is buying Whole Foods for $13.7 billion, and the news immediately drove down the stock price of competing supermarket chains.

My take: I love this move. I’m not talking about what it means for Amazon, which spent about 3% of its net worth on Whole Foods. Instead, I’m focusing on what it might mean to the supermarket customer experience (CX).

The supermarket CX has become so repetitive that consumers don’t expect too much new from it. That’s part of the reason why supermarkets perform so well in the Temkin Experience Ratings. They were the top performing industry this year. (In case you’re interested, Amazon Fresh is tied for 6th and Whole Food is tied for 11th out of 21 supermarkets in the 2017 ratings).

Supermarkets may have changed their product mix over the years, but the experience hasn’t dramatically changed in decades. The physical environment has certainly improved, becoming larger and brighter, but what a customer goes through inside of a supermarket is roughly the same.

Your grandparents went into a (probably smaller) market with a list of things they were planning to buy. They grabbed a cart and wandered up and down aisles, periodically grabbing an item to either read its label or to place it into their cart. They tended to repurchase many items, and would hunt around the store to find any new items on their list. When they were done, they’d take their cart to a check out line where a clerk would ring up their order and someone else would bag their groceries.

Maybe the biggest changes in the CX are that the clerk now scans the product instead of keying in the prices, and your grandparents likely had their groceries carried out to their cars. So, overall, the CX may have even declined slightly.

A lot has changed since your parents were small children, so it makes perfect sense that the supermarket CX is do for a makeover. And what retailer is irreverent enough to disrupt the long-held status quo? Amazon.

Let’s just imagine what some of the changes could look like when Amazon.com updates the supermarket CX:

  • You develop your list of groceries online (easily reselecting repeat items) and you’re provided with a supermarket map of the items, and informed if some of the products are out of stock. You may even be able to pick up the entire order at drive through.
  • Based on your selections and your known preferences (e.g., gluten free, nut allergy, Whole 30 diet, etc.), Amazon.com will make recommendations for products that you may want to add or replace from your list.
  • If you’re looking to cook a nice meal at home, then you can tell Alexa your menu and how many people you’re cooking for and Amazon will create a full list of ingredients. You can deselect any items you already have and it will create a new shopping list. Alexa may even suggest changes and additions to your menu.
  • Or lets say that you don’t have any idea what to make for dinner. Alexa may just come up with some suggestions based on your known preferences (and potentially on knowing the preferences of your guests as well).
  • These same capabilities will of course be available via a mobile device while you’re in the supermarket.
  • And forget checkout lines. As you leave the supermarket, all of your groceries will be remotely scanned and your Amazon Pay account will be charged.

These potential changes only describe the supermarket CX. Amazon.com may also turn these stores into pickup centers for other types of things that you order online. So there’s even more to imagine.

The bottom line: Supermarkets are overdo for a CX makeover.

Written by 

I am a customer experience transformist, helping large organizations improve business results by changing how they deal with customers. As part of this focus, I examine strategy, culture, interaction design, customer service, branding and leadership practices. I am also a fanatical student of business, so this blog provides an outlet for sharing insights from my ongoing educational journey. Simply put, I am passionate about spotting emerging best practices and helping companies master them. And, as many people know, I love to speak about these topics in almost any forum. My “title” is Managing Partner of the Temkin Group, a customer experience research and consulting firm that helps organizations become more customer-centric. Our goal is simple: accelerate the path to delighting customers. I am also the co-founder and Emeritus Chair of the Customer Experience Professionals Association (CXPA.org), a non-profit organization dedicated to the success of CX professionals.

One thought on “Amazon Buys Whole Foods: Hip, Hip Hooray For CX!”

  1. IMO and experience it’s dangerous to equate transaction ease with customer experience and assume that one leads to the other. This article completely assumes that the only reason people go to the supermarket is to purchase groceries – that may be the main reason but it isn’t the only one. If it was then there would be no brand loyalty, customers would just go to the nearest supermarket with a carpark.
    Amazon works well online because it focuses on transaction ease and has revolutionised the delay between online purchase and receiving your goods (remember 28 days wait for your catalogue purchases anyone?) but it is already falling flat in it’s physical stores because it is ignoring the physical, psychological and emotional factors that build CX and loyalty.

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