Whole foods can also be used as a delivery net work

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Whole Foods can also be used as a delivery net- work for Amazon's other non-grocery products. Amazon has been trying to open warehouses closer to customers so it can deliver orders in as little as two hours, and Whole Foods stores will bring Amazon physically closer to its shoppers. The stores could become locations for returning online orders of all kinds. Amazon could also use them to cut deliv- ery times for online orders. Several analysts have observed that Whole Foods' urban and suburban locations are so valuable for Amazon's delivery business that the deal could be worthwhile even if Whole Foods pretty much stopped selling food . When Amazon bought Whole Foods, it acquired 431 U.S. upper-income, prime- location distribution points for everything it does. \Vith V,Thole Foods' footprint in affluent areas and Amazon's expertise in supply chain and delivery, it could upend both food retailing and food delivery. One expert has called Amazon a "life bundle," par- ticularly ror affluent Americans. Amazon Prime could become the cable bundle of the future-an annual subscription to a group of diverse services that give Amazon a dependable revenue stream and a grow- ing, loyal c llstomer base. More than half of American households ",,rjth incomes over $100,000 are already Prime subscribers, and they spend more than $1,000 a year using this service. Affluent families regularly spend $500 a month at Whole Foods. Once Amazon owns Whole Foods, its richest customers could be ex- pected to spend thousands of dollars a year through Amazon. As Whole Foods customers are urged to sign up tor Amazon Prime-ane! as Prime c ustomers get enticing deals at Whole Foods-Amazon' s penetration
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Chapter 3 Information Systems, Organizations, and Strategy 117 lf the upscale market should grow, even as it offers li scounts to lower-income Americans. Amazon started making changes to Whole Foods · soon as the acquisition was completed in August .! 0l7. The day the acqu isition went through, prices f many Whole Foods staples dropped. Prices of o me items decreased by up to 40 percent. An identi- '!l basket of items from a Whole Foods lo cation in Bro oklyn went from $97.76 pre-acquisition to $75.85 . (J· t-acquisition. In November 2017, Whole Foods n nounced another round of price cuts, with a focus 11 holiday staples and best-sellers as well as Vlh ole ~o ods' private-label 365 line of products. In February 2018, Amazon and ,,,Thole Foods <l u nched a test to deliver groceries and other goods .. ur ectly from Whole Foods in four cities across the ited States. Whole Foods was basically used as an mazon depot. Customers can or d er fresh produce, afoot!, meat, flowers, baked goods, and dairy prod- ~ t S for delivery, with items arriving at their door- .ep within two hours. The company plans to roll u t the service through Prime Now to more cities.
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