ANALYST CORNER How Amazon Is Transforming Retail

Author: Jeff Kagan / Source: E-Commerce Times

Amazon’s plan to buy Whole Foods Market has raised many new questions. If the company is successful in making the acquisition, and then successful in operating the business, it could transform the entire grocery industry.

If we pull the camera back, we can see how success on the grocery side could foreshadow Amazon’s success in many other parts of the retail environment, furthering the expansion that began two decades ago in the book business, when Amazon challenged Borders and Barnes & Noble.

However, as successful as Amazon is in many different arenas, it is not successful with everything it tries. Remember the Fire Phone Amazon released a few years ago? It was a big flop. Amazon pulled itself out of the wireless handset business so fast it made our heads spin.

Not that Amazon is the only company to fail at wireless. Comcast, Time Warner Cable, Facebook and others met with the same fate. Just because a company is a leader in its field, that does not mean it can be successful in other sectors. It must prove itself in each market it enters.

Still, the grocery business is part of the retail world, and Amazon so far has been very successful at turning the retail world on its head.

Amazon Go and Whole Foods

Amazon’s entry into the grocery business threatens current industry leaders like Kroger, Publix, Walmart and Target. Amazon began experimenting in this segment a while ago with a store called “Amazon Go.”

Amazon Go is a different kind of grocery store. Customers walk in, grab what they want, and walk out. Their smartphone app automatically rings up their purchases. Is that the model Amazon will…

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