What Have Amazon and Whole Foods Been Up To?

SEATTLE -- One way to consider what Amazon’s acquisition of Whole Foods means for the retail world is to look at what the two companies have been up to recently.

Plenty of speculation about the merger has been fueled by Amazon’s recent tech-focused experiments with brick-and-mortar retail, Amazon Go and AmazonFresh Pickup, but that’s not all the e-retailer has been up to lately.

Similarly, Whole Foods Market has been busy opening small-format locations under the 365 banner and rolling out its own tech initiatives.

Click through for six examples of what Amazon and Whole Foods Market have been working on and what it might mean for their recent union …
 

Amazon has spent the past few months working on what the company calls “no-checkout” technology in its smart convenience-store concept, Amazon Go. Customers simply scan their phone as they walk in, pick up what they need and leave. Sensors in the shelves and everywhere in the store identify which customers grab which items and charges their accounts accordingly, allowing customers to leave the store without waiting in line at a checkout station.

The store was originally slated to open by early 2017, but its opening was delayed while the e-commerce giant tweaks the sensor technology so it can handle large, fast-moving groups of people.
 

Testing of AmazonFresh Pickup was announced by the e-retailer one day after news broke that the opening of Amazon Go would be delayed. Amazon then opened its two Seattle grocery pickup centers to the public on May 25.

All Amazon Prime subscribers can order groceries online and pick them up after two hours. An additional $14.99-a-month fee allows Prime subscribers to pick up their grocery orders just 15 minutes after placing them online. The technology allows customers to pick up groceries on the road without ever stepping into a grocery store.
 

Amazon isn’t just focusing on brick-and-mortar. In late May, it received a patent for a shipping label with a breakaway cover that opens up into a working parachute. The idea behind the patent is to ensure that packages delivered via drone reach the ground without sustaining too much damage.

Many have reached the conclusion that some Whole Foods locations could potentially serve as distribution centers to facilitate the last mile of Amazon deliveries. Amazon’s work with drones may not be related to the merger at all, but Amazon’s recent patent is one example of Amazon’s seriousness about drone delivery either way.
 

The small-store concept 365 by Whole Foods Market was meant to be the chain’s answer to changing expectations of grocery shoppers, but will it stay that way if Amazon ends up in charge?

The 365 stores already include a tech focus. Store features include a loyalty program, My 365 Rewards. The program is entirely digital and comes with content, recommendations and deals based on each individual shopper. Some of the stores also include a self-serve machine called teaBOT that brews drinks via touchscreen orders. Only time will tell what Amazonian ownership will mean for these relatively new stores.
 

The specialty grocer has also started adding tech amenities to regular stores. Earlier this year, Whole Foods Market opened a new location in Chicago’s Lakeview neighborhood loaded with a collection of in-store bars and restaurants. One concept included in the months-old unit is the Red Star Bar, a quick-service restaurant where customers can place orders through kiosks. Digital ordering kiosks have also popped up in The Roast, a full-service Brazilian restaurant included in the new Whole Foods location in Atlanta’s Midtown.

One important question raised by Amazon’s acquisition of Whole Foods Market is what will happen to the specialty grocer’s existing brand relationships?

Whole Foods Market’s Chicago location in the Lakeview neighborhood includes a refrigerated section loaded with grab-and-go meals from Snap Kitchen, the prepared meal business. The prepared-food packages are also available at Snap Kitchen stands in multiple Whole Foods Market locations. And what about the plant-based Purple Carrot meal kits sold by the organic grocer? Will these brands keep their shelf space or be edged out by the Amazon arrow?