Online retailer Amazon announced earlier this month its plans to acquire Whole Foods, an upscale grocery chain with 460 physical stores, for $13.7 billion. Amazon is known for its use of technological innovation for behind-the-scenes efficiency, which raises a great question about what is in store for Whole Foods and its existing employees.
Bloomberg reports, citing an unnamed source, that the Seattle-based company spent time diving into Whole Foods' distribution technology to see where costs could be cut. Gary Hawkins, CEO of the Center for Advancing Retail and Technology, told Bloomberg that warehouse jobs would be first to be impacted by the merger.
"The easiest place for Amazon to bring its expertise to bear is in the warehouses, because that's where Amazon really excels," Hawkins tells Bloomberg. "If they can reduce costs, they can show that on the store shelves and move Whole Foods away from the Whole Paycheck image."
Amazon is already pushing for automation in its warehouses. Once that is perfected, automation may come to physical stores, says Austin Bohlig, an advisor at Loup Ventures. Bohlig told Bloomberg in-store robots won't replace cashiers right away, but would assist in monitoring inventory.
On its end, Amazon is testing Amazon Go — a convenience store in Seattle which lets customers shop from their phone and pick up their purchases without visiting a checkout kiosk or interacting with a cashier. This level of efficiency and automation could reduce labor costs at brick-and-mortar Whole Foods stores.
While there's no official word yet on what technology the e-commerce giant plans to implement at Whole Foods, change is coming. John Mackey, chief executive officer of Whole Foods, hinted at this in a meeting with employees after the acquisition.
"We will be joining a company that's visionary," Mackey says. "I think we're gonna get a lot of those innovations in our stores. I think we're gonna see a lot of technology. I think you're gonna see Whole Foods Market evolve in leaps and bounds."