According to US business news sources such as Quartz and Reuters, Amazon is working on developing new grocery store formats as part of its integration with natural and organic chain Whole Foods Market. The new concept will be where online meets offline for Amazon and its consumers, merging a variety of Amazon fulfillment and delivery operations (Prime Now, AmazonFresh, Amazon Lockers) with in-store customer experiences.
“We think we’ll also be developing new store formats,” Amazon’s chief financial officer Brian Olsavsky said when answering questions over whether Amazon had considered using Whole Foods’ more than 400 brick-and-mortar stores to establish a physical pharmacy presence, related to its pharmacy wholesaling approvals in 12 US states, Quartz digital news said.
Speaking at Amazon's third-quarter earnings the last week of October, Mr. Olsavsky, outlined everything Amazon thinks it can do with its USD13.7 billion acquisition of Whole Foods Market. He cited how Amazon’s two-hour delivery service Prime Now could work with Whole Foods.
"I will say we do see a lot of opportunity with Whole Foods; there’ll be a lot of work together between Prime Now, AmazonFresh, Whole Foods, Whole Foods products on the Amazon site, Amazon Lockers at the Whole Foods stores," he said.
"So, there’ll be a lot of integration, a lot of touch points and a lot of working together as we go forward. And we think we’ll also be developing new store formats and everything else just as we talked about in the past before Whole Foods: Amazon Books stores, Amazon Go, and the opportunity that that technology presents."
"We are experimenting with a lot of formats. I think that Whole Foods gives us a vast head start on that and a great base. And a great team to work with who has a lot of history and a lot of—they probably have 10 to 20 years of learning that we don’t have and wouldn’t have. So, we’re really excited about that and I think working together, will bring our different strengths to the table and really be able to build on behalf of customers," Mr. Olsavsky said.
Amazon is winning business from older, big box rivals by delivering virtually any product to customers at a low cost, and at times faster than it takes to buy goods from a physical store. It acquired Whole Foods in August to help it deliver groceries to shoppers’ doorsteps.
The world’s largest online retailer said net profit rose to USD256 million in the third quarter ended September 30.
In a first, Amazon broke out sales for its online retail business and its physical bookstores and Whole Foods locations. Revenue from its online stores jumped 22 percent to USD26.4 billion, the fastest growth Amazon has seen in the segment in more than a year.
Revenue rose 34 percent to USD43.7 billion in the third quarter, including USD1.3 billion in sales from Whole Foods. Analysts had expected USD42.1 billion.
Key to its success has been signing more people up for Amazon Prime, its fast-shipping and video-streaming club, whose members tend to buy more from the company. Revenue from subscription fees such as Prime grew 59 percent to USD2.4 billion.