Amazon’s Whole Foods Plan: Out With Coupons, In With Robots?

Photo credit: Erik Charlton, which he captioned “as seen in an Amazon lobby.” CC BY 2.0.

As you might remember, Whole Foods is Amazon now. The speculation around what might happen next is fascinating, and here are some of the more interesting predictions:

Bloomberg Businessweek thinks we’re going to start to see a lot of robots; first in warehouses, and then navigating Amazon Whole Foods aisles like real-life Wall-Es:

Experts say the most immediate changes would likely be in warehouses that customers never see. That suggests the jobs that could be affected the earliest would be in the warehouses, where products from suppliers await transport to store shelves, said Gary Hawkins, CEO of the Center for Advancing Retail and Technology, a Los Angeles nonprofit that helps retailers and brands innovate.
[…]
After automating warehouses, Amazon may bring the robots to the stores. But don’t expect them to replace cashiers immediately. The first ones will likely navigate aisles to check inventory and alert employees when items run low, said Austin Bohlig, an advisor at Loup Ventures, which invests in robotics startups.
“These robots can operate alongside people inside a store, but Amazon will want to make absolutely sure they are safe,” he said.

When I had the opportunity to use a hotel concierge robot earlier this year—and by “use” I absolutely mean “play with”—I tried deliberately stepping into the robot’s path. The robot stopped moving until I got out of its way, which was what I was expecting, but I could see this being more of an issue in crowded grocery aisles where people are often unaware of the other humans in their space, much less the robots. (Maybe the robot stops moving because I’m blocking its path, but the person on the other side of the robot doesn’t notice that it’s stopped and trips over it, etc. etc. etc.)

Anyway. What else is going to change once Amazon Whole Foods gets rolling?

CNBC thinks Amazon Whole Foods will end couponing as we know it, first because Amazon will be able to offer fluid pricing and second because—as I learned when I tried to find actual grocery coupons and not loyalty card deals—couponing is losing popularity on both the consumer and the retailer end:

Couponing has already been on a steady decline as the economy improved following the Great Recession. Overall coupon redemption fell more than 4 percent in 2016 from 2015, while the average face value for coupons as well as the total volume of offers were lower in 2016, according to Inmar, a leading coupon processor.

CNBC suggests Amazon Whole Foods will lower prices through “price matching,” but now that we know that Amazon has this patent to prevent you from checking other retailers’ websites while in-store, I’m not necessarily sure that price lowering is their goal.

And yes, the fact that we don’t really know Amazon’s long-term goal is part of the problem:

When Amazon announced last week that it will acquire Whole Foods Market, a grocery chain with over 450 retail stores and deep industry talent, for $13.7 billion, Amazon’s stock price rose 2.4% on the news, increasing its market capitalization by $11 billion. At the same time, the price of SuperValu plummeted 14.4%, Kroger dropped 9.2%, and Sprouts fell 6.3%. You could almost hear the three-year plans of every grocer, and nearly every other traditional retailer, grinding through the shredding machines.

The Harvard Business Review story also contains this sentence, which… um…

Nobody in the industry should be surprised that the future of retailing is moving toward a fusion of digital and physical experiences.

They just mean that your phone will send you special deals while you’re in the store, right? But they had to call it an “experience,” because that’s the word that people claim we’ll pay money for.