Earlier today Amazon announced that it is acquiring Whole Foods. I can’t count how many different lines of business Amazon has but this is yet another step in its quest to capture every consumer dollar spent. Unsurprisingly, people spend the most on necessities which is basically food and housing followed by clothing and transportation. In 2015, a whopping $600B was spent at grocery stores in the US - and this doesn’t include eating or drinking out. Amazon has massive ambitions and getting into these categories is a necessity. Amazon has already been getting into food and clothing but this is a huge step into the brick and mortar world which will open up a ton of possibilities.
There have been a lot of interesting observations about the value this acquisition brings Amazon. These range from giving Amazon distribution locations in urban areas to doubling down on grocery delivery with AmazonFresh. I like to think that the fact that anyone can come up with a justification is proof enough that the acquisition makes sense. This is especially the case given Amazon’s history of jumping into adjacent markets and businesses. Relentlessly executing in one area gives Amazon the ability to leverage that experience and infrastructure to attempt something new (Brad Stone does an incredible job of covering this in The Everything Store). Amazon started with books, introduced other goods, then after figuring out their logistics expanded this to third party sellers. And in their spare time they somehow managed to build AWS. No one but Amazon knows how Whole Foods fits into Amazon’s vision but I wouldn’t be surprised if this leads to even more Amazon domination.