Sparta Report

Amazon Trying to Expand Its E-Commerce Dominance With Whole Foods Purchase

Amazon is plotting total dominance of all retail, warns Slate:

But Amazon is also chasing something even larger here. Its move into groceries isn’t just about adding a new territory to its online retail empire. It’s about dominance, comprehensiveness, and the pursuit of monopoly.

Adding groceries to its repertoire gets Amazon that much closer to being a one-stop destination for everything you buy. It gets customers visiting not just occasionally, but several times a week, every week. It reinforces the behavior by which customers search for things to buy on, rather than on a search engine like Google. It builds Amazon’s two-hour delivery business, which it sees as crucial to its future.

There’s more. It encourages people to use the Amazon Echo smart speaker for shopping lists and purchases, which makes far more sense when you’re ordering groceries than it does when you’re trying to buy, say, a new lamp or a pair of shoes. Same goes for Amazon Dash, whose Wand barcode scanner the company has just resurrected. And, perhaps most importantly of all, it will force every Whole Foods customer to strongly consider signing up for Amazon Prime, which turns Amazon into their de facto source not only for online retail but for instant video and other media.

The grocery stocks are down today, but they shouldn’t be the only companies trembling: Google, Apple, and even Uber are threatened by Amazon’s growing hold over e-commerce, media, and same-day home delivery.

I don’t think this situation is that bad, at least not yet. Amazon has limited experience at best managing brick and mortar operations, and corporate mergers don’t always work out well. Wal-Mart in particular is also starting to engage in serious catch up efforts. My hope is that more big retailers will get more aggressive in taking on Amazon after this latest move. Competition is good.

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