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IRI is out with a new Market Shift Study, looking into “the impact Amazon’s recent acquisition of Whole Foods Market is having on the retail landscape, as well as shopper behavior and expectations.”

According to the study, “While synergies of the acquisition, such as benefits to Amazon Prime subscribers in Whole Foods stores, are not yet fully realized, they have already begun to shape behavior. For example, 71 percent of Whole Foods shoppers with Amazon Prime memberships are more satisfied with their experience at Whole Foods and are more likely to shop there.

“Furthermore, anticipated benefits, such as free grocery delivery, are expected to motivate over 60 percent of shoppers to buy more of their groceries at Whole Foods Market stores.”

As the study comes out, MarketWatch reports that Whole Foods has emailed the members of its loyalty marketing program advising them that “it will discontinue its rewards program and digital coupons starting May 2,” and will shortly thereafter supplant the program with Amazon Prime.

According to the story, “all arrows now point to consumer-facing changes in the near future, with predictions of new programs for Prime members already in the air, along with talk of a ‘disgruntled’ supplier base. Exclusive discounts of as much as 10% for Prime members were tested at an Austin, Texas, store.”
KC's View:
This has been inevitable, from the moment that Amazon acquired Whole Foods. In the end, cutting a few prices and streamlining the supply chain will be small potatoes (albeit small organic potatoes) compared to how Amazon should be able to impact on Whole Foods by connecting it to Prime.

The big opportunity will be the use of consumer data to communicate more effectively with shoppers and reward them. They’ll have to be careful about this, since we’re in a moment when data usage and privacy are top of mind issues. But there are some real opportunities here.