Why Whole Foods is just the start of Amazon's retail revolution

There's no doubt that Amazon is taking retail by storm with constant releases of the newest gadgets, partnerships, and investments. In the past 6 months, Amazon has released several innovations to make online and in-store shopping faster and easier.

Let's take a look at what Amazon has been up to.

Whole Foods

After Amazon's Whole Foods acquisition in 2017, the world is anxiously awaiting to see what's next.

With over 460 stores, Whole Foods has been in the market since 1978 and has consistently offered high quality, premium organic and natural products.

According to Whole Foods CEO John Mackey, “This partnership presents an opportunity to maximise value for Whole Foods Market's shareholders, while at the same time extending our mission and bringing the highest quality, experience, convenience and innovation to our customers.”

This is not the first time Amazon has tried to establish a physical presence.

Amazon Go

Amazon recently launched a cashier-less store called Amazon Go that eliminates the need to wait in line. Customers can simply walk in, grab their items, and walk out.

As of March 2019, Amazon Go has 10 locations across Seattle, Chicago, and San Francisco. According to Bloomberg, Amazon is considering opening up 3,000 Amazon Go stores by 2021.

The store offers a variety of products, including items found at typical convenience stores, prepared foods, and even some groceries. While the store doesn't pose a threat to big box retailers, it does compete directly with quick-service restaurants and convenience stores.

Though food isn't Amazon's largest revenue source, it's clear that Amazon is interested in exploring the space.

Amazon Fresh

Amazon Fresh is Amazon's grocery delivery service that initially launched in the U.S. in 2007, and in the UK in 2016.

Though Amazon Fresh got off to a slow start, Amazon has found other ways to monetize the service. As of March 2019, Amazon even announced they're going to allow sponsored products.

For Amazon to make significant progress in the grocery industry, they need to increase their footprint in traditional stores and cannot just depend on online business. Will Whole Foods be just what they needed, or will we see Amazon launch their own grocery stores?

Amazon Prime Wardrobe

As of June 2018, Amazon announced that it is jumping into the “try before you buy” clothing trend with Prime Wardrobe. This new service lets customers buy what catches their eye, and return what they don’t want. It's a free service for Prime members, and allows them to pick between 3-15 items from more than 1 million options such as clothes, shoes, and accessories.

Though Amazon-owned Zappos has successfully grown as an online shoe store, Amazon itself appears to be experimenting with different ideas to build up its clothing business.

Currently, online clothing and accessories sales make up 24% of the total in the U.S., according to Cowen & Co. By taking the hassle and regret out of returns for clothing, Amazon could make people much more comfortable pulling the trigger on an online apparel purchase. Choose your items well and you get a bonus discount, but pick poorly and don't worry. The speed and simplicity of Prime Wardrobe could be its biggest selling point.

Amazon's elimination of common online shopping annoyances, like shipping time and difficult return policies, could remove one of the last big selling points for brick-and-mortar retailers.

Additionally, because you can easily return clothes that you don’t like or want, Prime Wardrobe could make it more comfortable for customers to purchase through voice commands to the Amazon Alexa.

Amazon Alexa

Amazon Alexa is a virtual assistant first used in the Amazon Echo and Echo Dot smart speakers.

Alexa’s integration adds a new dimension – you can now ask it to add items to a list, or buy them instantly. Releasing Alexa into the vast mobile smartphone and app market could help Amazon enable experiences for a much larger set of customers.

There is almost nothing that this virtual assistant cannot do – she can be used to make phone calls, buy things, control products throughout the home, plan a vacation, order a taxi, and much more.

What's next?

From acquiring top grocery stores to creating virtual assistants, Amazon has managed to thrive in all types of retail. Not only will Amazon continue to dominate the world of online shopping, they may soon dominate physical retail, too.

Although we can’t predict exactly what Amazon’s next move is, it is clear that the giant is investing more in its physical presence and that the retail market needs to be ready to fight back.

Inspired by Amazon's leap into physical retail? Here are six retail lessons from Amazon.