Today Amazon announced the death of the pure-play e-Commerce business model. Amazon will acquire Whole Foods Market for $42 per share in an all-cash transaction valued at approximately $13.7 billion, according to the Amazon press release.
It also confirms what we’ve known at Promoboxx for a long time. With over 12,000 active retailer locations partnering with Promoboxx, we’ve proven that local, independent retailers are essential to increase sales and build loyal brand advocates.
This is an industry-changing move by the world’s biggest and best-known e-Commerce company. Amazon, whose market value surpasses the 12 largest traditional general retailers combined, has spoken: e-Commerce alone is not sustainable for growth in a market that values the service, customer experience, and community involvement that independent, brick-and-mortar retailers excel at — especially for considered purchases.
Whole Foods is a great example of this and a natural partner for Amazon, also being one of the biggest and well-known brick-and-mortar grocers in the United States. Whole Foods is known for its mission to provide quality products and make a difference in local communities. Every store looks and feels unique to its community because Whole Foods empowers each of its 465 retailer locations to partner with local printers.
This acquisition validates the market shift back to brick-and-mortar retailer locations. e-Commerce isn’t going away, but it is important to recognize how it has failed the considered purchase market. Consumers go through a complex in-store and online journey as they consider their needs, evaluate their options, and eventually make a purchase. Local, independent retailers are better equipped to address this market need. Retailers are pillars in local communities, and they have a direct, personal connection with local consumers who actually buy the product.
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This move by Amazon really isn’t shocking. We learned earlier this year, too, that they are exploring the idea of launching new brick-and-mortar stores that sell home furnishings and appliances — i.e. the types of considered purchases customers want to see in person at a specialty retail location.
What Amazon is telling us is simple: Retailers are important even to the largest e-Commerce company in the world. This move by Amazon only solidifies what we already know at Promoboxx, that retailers are an essential component of the shopping and consumer industry.
