When you work for Amazon, you rely on two decision-making maxims for everything you do.
First, you must test and gather data.
Second, you must make decisions based on that data.
With the recent announcement that Amazon will expand Whole Foods reach and create new locations, Amazon’s leadership followed this model to a tee.
This is a decision based on what the data was telling people, and people are saying that they want more touchpoints for Whole Foods’ products. Recently, I wrote an article for Love of Retail highlighting how predictive artificial intelligence (AI) can impact manufacturers and brands. Here is a great example of how the data and AI are coming together to create a solution that benefits so many stakeholders.
Amazon and Whole Foods are creating greater access for products sold in the stores. By having more physical locations, it entrenches more locations for Prime Now customers to get products delivered when and where they want it. But the VELOCITY team sees other opportunities.
Amazon is using the data to solve for supply chain efficiencies on the back end through their confidence in their data. Amazon did not specifically reduce the number of options the customer has, but it is reducing the number of vendors providing those options.
What’s more, this “clean-up in Aisle 7” is a signal that something bigger could be in store (pun intended). Something very different is on the horizon.
At VELOCITY, we believe that the level of efficiency that Amazon is creating on a cost and logistical level indicates that it is paving the way for next-level of ordering, utilizing predictive analytics. Amazon is going to focus on efficiencies and create an unmatched customer fulfillment model, which in turn will provide savings and convenience to the customers never before seen in the grocery category.
Although this will seem very new, we’re confident that when managed properly, and mirroring the clear methods that have worked for success on Amazon’s platform in the past, brands and manufacturers have a once-in-a-lifetime opportunity to create a bold brand presence within Amazon’s new system, and dominate market share within their categories.