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Amazon’s New Default Setting

Posted by Patrick Moorhead on June 26, 2017

Data Driven Experiences for Bricks + Clicks

Amazon Just Turned Up the Heat on All Retailers to Embrace Ecommerce

With its proven tech infrastructure and scale, Amazon's acquisition of Whole Foods adds a highly valuable, much needed pile of bricks to Amazon’s brick+click equation, combining their industry leading customer & marketplace intelligence with a scaled distribution footprint and built-in consumer base for grocery. This move signals that it’s time for conventional retail to get serious about technological innovation, e-commerce, and consumer experience.  For conventional grocers, Amazon has just made your 3 year e-commerce and innovation strategy obsolete. 

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Image via: My Private Brand mypbrand.com

Instacart Becomes Even More Valuable to Mainstream Grocers

Instacart will now, more than ever, be viewed as a partner to get the industry up and running in e-commerce quickly and effectively. Instacart has two unique advantages to retailers; first they are partnered with 160 different retailers, so shoppers can choose their preferred retailer, and can always find what they want - something that both Amazon and Walmart will struggle to get; and second they have an engaging and constantly improving user experience - which is where the battle is going to be fought.

Data Driven Bricks and Clicks Experiences are a Must

Conventional retail's best hope for competing with this new giant lies in getting serious fast about delivering on  data driven shopper experiences that surprise and delight customers.  Understanding shopper preferences, keeping track of them over time, and providing better information on every aspect of the shopping trip, need to become a default setting in order to complete. For other retailers, adding product attribute data to both in-store and digital shopping experiences will be key to driving the relevant search and user experience required to compete against Amazon, and that’s something Whole Foods knows a lot about - they were among the first retailers to curate their assortment against a “no no list” - making shelf level product selection choices based on the labeling and ingredient attributes of the products themselves.

Product Data Takes Center Stage

Any CPG brand with a product on the shelf at Whole Foods should be immediately getting their data house in order anticipating Amazon will be ingesting their data from Whole Foods shelves and presenting it to their entire online audience. In the process, enriching  the attribute data profile of their products to meet both Amazon’s, and consumers’ increased demand for greater transparency will be the best way to proactively prepare for rapid increased focus on digital product information across the sector.  

Get ready for Amazon to take over product data ingestion for Whole Foods. Also get ready for in-store merchandising and assortment choices to increasingly be informed by browsing and buying data from Amazon (reviews anyone?), and for Amazon customer profiles to take on a new life in the aisles of Whole Foods (“customers also bought..” as shelf edge marketing).

The Bottom Line

Retailers and brands alike should feel increased urgency to get in front of this pivotal merger, get their arms around product data as not just a key capability, but frankly, table stakes, in the face of this new competitive force.

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Topics: Company Viewpoint

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