PR pulse: Reactions to Amazon’s acquisition of Whole Foods lukewarm

by | Aug 9, 2017 | Public Relations

Amazon’s decision to purchase Whole Foods, with its 460-plus locations nationwide, brings with it seemingly unlimited possibilities for online/offline synchronicity. But how do U.S. consumers—the people who will ultimately determine the deal’s success—actually feel about the new alliance?

A recent study from market researcher GfK shows that 38 percent of current Whole Foods shoppers, and 31 percent of Amazon shoppers, feel positive about the acquisition. Those who already shop at both Amazon and Whole Foods are the most upbeat of all, with 43 percent declaring themselves optimistic about the deal. These levels are much higher than the figure (23 percent) for overall U.S. shoppers.

Across the categories, positive feelings outweigh negative by roughly 3 to 1 among current shoppers at one or both retailers; and in the general shopper population, upbeat beats downbeat by more than 2 to 1.

Reactions to Amazon’s acquisition of Whole Foods lukewarm

GfK found that 3 in 4 Whole Foods shoppers have made at least one Amazon purchase in the past month—significantly higher than the average (50 percent) among non-Whole Foods shoppers. The study also revealed a higher incidence of Amazon Prime membership among Whole Foods shoppers than among U.S. consumers as a whole (50 percent versus 37 percent).

Expanding online, offline reach

Only a small proportion (23 percent) of those who feel optimistic about the acquisition are currently shopping at Whole Foods—and only 9 percent of the total U.S. population is engaged in grocery eCommerce activity. This suggests a huge opportunity for the combined companies to grow both Whole Foods’ market share and the e-grocery business in general.

Among those who are positive about the alliance, hopes for convenience and technological innovation are high. Four in ten (42 percent) would like to see free grocery delivery for Amazon Prime members. One-third (34 percent) are hoping that Amazon will bring technologies in-store that make shopping easier; and one-quarter (25 percent) now feel reassured that they will be able to get high-quality fresh foods online.

Reactions to Amazon’s acquisition of Whole Foods lukewarm

The value of trust

“Even at this early stage, we see a great deal of optimism around Amazon’s acquisition of Whole Foods,” said Wendy Wallner, EVP of GfK’s Retail industry practice in North America, in a news release. “Those who already shop with one or both companies see a variety of opportunities for amped-up convenience and selection. The partnership makes sense to them; they want to buy Whole Foods’ products online, and they trust the quality—typically the biggest barrier with purchasing fresh groceries online.

“In addition, among shoppers generally, the potential for taking e-grocery to a level only dreamed of seems within reach. With Whole Foods’ strengths in both fresh and prepared foods, Amazon now has the ability to offer meal and grocery delivery—suddenly competing with companies like Blue Apron and covering all aspects of food e-commerce,” she added.

The GfK study shows that half (49 percent) of Whole Foods shoppers hope that the new alliance will lead to lower grocery prices. The same percentage also want to see their local Whole Foods outlet remain open—in fact, they hope that Amazon will open more outlets; and 44% do not want to see current store employees laid off. They want to see local businesses thrive and hope that sales associate morale will not suffer.

“To fulfill the promise of this alliance,” Wallner continued, “the two retailers need to pay close attention to their customers’ hopes and concerns, and avoid missteps that could deflate the high expectations of these early days. In particular, Amazon needs to recognize that Whole Foods shoppers are much different from mainstream shoppers, and that it needs to rise to this occasion by maintaining the grocery chain’s brand values and high quality standards.”

Download the report here.

The GfK study was conducted among 1,000 US adults (ages 18 and above) on GfK’s KnowledgePanel, the largest probability-based online panel that is representative of the adult U.S. population. Responses were collected from June 23 to 26, 2017.

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Richard Carufel
Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 12 years, and has interviewed hundreds of journalists and PR industry leaders. Reach him at richardc@bulldogreporter.com; @BulldogReporter

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