I Hate Shopping. Which is Why Amazon’s Acquisition of Whole Foods Is No Surprise.
Amazon has always sold us just one thing.
There’s a part of me that’s always railed against consumerism, whenever I test drive a Tesla or cruise J. Crew or bounce on a don’t-touch-me couch over on Melrose I swear I hate it. In reality, I love a well-earned acquisition whether it’s machinery or gum, though not the day of reckoning, come to Jesus or whomever, when Mastercard texts my now-due statement, which leads me to buy another fidget spinner.
The anti-consumerist in me wants to live a life of magic, as Henry David Thoreau describes in Walden:
Instead of studying how to make it worth men’s while to buy my baskets, I studied rather how to avoid the necessity of selling them.
I can just about smell the peace, though isn’t the craving of that existence the same as the craving for an iPhone 8? It’s great till you get it. It’s like the tiny house movement. Who wouldn’t want to be mortgage-free? The tiny house movement is of course selling the idea of unpurchasing by purchasing it. But the real deal is you are mobile-home living, begging to roll into somebody else’s land and plug into their grid. #IRL, few of us want to live in our bathroom, which is what a tiny home forces you to do.
But But But
Here’s another overdue statement: we shop too much. I know, I know, it’s capitalism and it drives the economy and personal freedom, do what we want with our money, yada yada. How else would our equities and 401ks and IRAs and expectations be on the up-and-up without mega-corporations boosting their top-line revenue? What else do we rest our head on at night if not our savings, that might also hold a share or two of Starbucks?
Except many retail companies are not like Starbucks, whose stock has increased upwards of 10% since January 1. Many retailers are headed in the other direction. There’s Sears and JC Penney and Macy’s, and I don’t have to analyze any of them to tell you a lot of them are in deep shit. Also in deep shit: lots of malls.
(Side note: malls are not in decline because we don’t like to shop, malls are in decline because they are largely horrible, outdated experiences. But not all malls are horrible. Check out The Grove on any Saturday afternoon, which has essentially become the Main Street Los Angeles never had.)
But not Amazon. Amazon operates differently than most other large cap companies. Matthew Yglesias over on Vox does a great job explaining why Amazon’s no-margin approach to its business has led to much success.
So it’s no surprise that Amazon is a shopaholic itself.
So it’s no surprise that Amazon, the king of shopping in our modern media culture, is a shopaholic itself. Over the years, it’s bought Goodreads and Zappos and Twitch among many others. And now it’s got Whole Foods, or will as soon as regulatory bodies say ok. The stock market already has.
Cha-ching, changing expectations
Here’s how shopping used to work:
1/You go get it. Driving, parking, shopping, line-waiting, driving. OR,
2/You order it and it comes to you. Shipping charges, waiting, returning.
Either way, this requires waiting and/or effort.
Essentially, Amazon started with #2, and chose books (books are easy to ship, easy to store, and don’t spoil). But longer-term, Amazon asked itself, what if we took the best of #1 (no waiting) and the best of #2 (no effort) and combined them? That’s e-commerce, and that’s Amazon’s long game. What Amazon is really aiming to sell is no waiting and no effort.
Amazon is really selling no waiting and no effort.
Of course, vision and reality have always been long-distance frienemies. Amazon’s biggest challenge for twenty years has been geography. It still takes time to get things to us. Amazon has invested billions in distribution centers outside major metropolitan areas, offers same day delivery for many things, but it’s not good enough, when we want things right now.
Enter Whole Foods
Whole Foods is a high-end grocery store, stuck with the “whole paycheck” label (somewhat undeserved), with a lower barrier to entry than one might imagine (I’ve always thought this was Whole Foods’ Achilles heel; what would stop Walmart from selling organic spinach at a lower price? Nothing). And Whole Foods has seen declining same store sales for its 440+ stores, so something isn’t working.
Of all the things that Amazon has excelled at, groceries have not been one of them; yet we spend enormous amount of money on groceries, we buy them every day, and we will never stop buying. Amazon Fresh is in constant beta, Amazon Go is not yet open to the public (I covered the opening last December), and groceries fundamentally do not work the same way as books (groceries are hard to ship, hard to store, and do spoil).
What Whole Foods has is geography — those 440+ stores in high-value locations — the thing Amazon has never had. When we think of it this way (groceries + geography) an Amazon Whole Foods match makes a lot of sense, and nobody saw it coming, including me. Reinventing large-scale grocery shopping, of course!
Don’t Blame Amazon
We are a consumerist culture. Materials things do not buy happiness, but we also can’t wait to buy more stuff. That’s the complexity of being human: ironic conflicts of interest make us worthy of study. And groceries, well no matter what, we need ‘em.
I’m not going to predict anything about next year or next week or even tomorrow, but I am going to take lessons from the past. Amazon has a track record of innovation. It has destroyed industries and rebuilt them in unpredictable ways (see Barron’s infamous-for-being-wrong 1999 cover story, Amazon.bomb). So keep watching.
Many companies are great at understanding consumer behavior. Amazon is a rarer bird: the company has actually been successful at changing consumer behavior.
I hate shopping. I love Amazon. It is figuring out what’s wrong with shopping and fixing it. Maybe it’s not the things I acquire, but the process by which we have been forced to acquire them, that chafes.
Either way, now I’m listening to Walden on Audible. Oh, Amazon owns Audible too. See what they did there?
Our team of writers at Mistress has covered the changing modern retail scene extensively: