Abstract
Amazon’s 2017 purchase of Whole Foods Market seemed to suddenly make this commercial giant a notable player in food retail. However, as we demonstrate below, this development was neither sudden nor surprising. Amazon’s business strategy has paved the way both for this acquisition, and for the other surreptitious ways in which it is chipping its way into food retail. We argue that these developments are motivated by Amazon’s goal of becoming a one-stop-shop for all consumer goods for as many customers as possible, which would in turn allow Amazon to expand as the key global broker for consumer data. Although Amazon’s tactics have little to do with food itself, the implications to food retail and more generally to food systems around the globe could be momentous.
Highlights
When Amazon purchased Whole Foods Market (WFM) in 2017, its entry into the fresh food sector and the addition of physical locations received much media attention
In this paper we explore Amazon’s foray into food retail to ask: What drove Amazon to move into food retail and what steps has Amazon taken to enter and expand into this market? What is enabling it to succeed in monopolizing purchasing habits, and what are the potential implications if the power of the world’s largest internet company is not checked? We argue that the complex interplay of technology, data capabilities, and lax regulatory regimes are both driving and enabling Amazon to vie for consolidated control of food retail
Review Political economists have been fascinated by Amazon as the embodiment of market concentration and datafication of the consumer (Culpepper & Thelen, 2019; Mosco, 2017; Srnicek, 2017)
Summary
When Amazon purchased Whole Foods Market (WFM) in 2017, its entry into the fresh food sector and the addition of physical locations received much media attention. Amazon devices (Echo, Dash buttons, and Alexa Home Systems) were integrated into the physical WFM stores for purchase and Amazon began “the technical work needed to recognize Prime members at the point of sale” Amazon’s greatest expense is and has always been shipping, and despite its success in obtaining greater market share in groceries, it has struggled to overcome multiple challenges (like other e-commerce retailers), including consumers’ lingering preference to shop offline for their groceries ( meat and fresh produce) (Galloway, 2017) What this adds up to is “stickiness”—using online and offline economies of scale to keep customers coming back and maintaining Prime’s ability to stay flexible and adopt innovations and new business ventures to reinforce customer loyalty
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