Amazon, Whole Foods and the Transformation of Retail - The View from Social
When major business news breaks, it tends to go wild on social media with speculation, jokes, (in)expert commentary and much more. Amazon’s acquisition of Whole Foods was no exception and we decided to analyze the buzz using social listening to see what we could learn.
Retail is going through a pretty substantial transformation - a subject we cover in more detail in our latest retail report - and the question is becoming: "Will Amazon just take over everything?"
How the News Spread on Social
On June 16th, news broke of an acquisition that had the potential to reshape the retail industry. Amazon was buying Whole Foods for $13.7 billion, and social media went to into meltdown with opinions and jokes aplenty.
Here a couple, that I think give a nice flavor of the kind of snap discussions that were taking place.
Amazon did not just buy Whole Foods grocery stores. It bought 431 upper-income, prime-location distribution nodes for everything it does.— Dennis K. Berman (@dkberman) June 16, 2017
How Amazon really bought Whole Foods pic.twitter.com/Mls8eT5iDW— Ken Rutkowski (@kenradio) June 16, 2017
Overall, there were around a quarter of a million mentions of the deal across online and social media on the day of the announcement, with discussion peaking moments after the first report:
Although the drop in conversation looks pretty significant, this is mostly because the peak was so high - news media, in particular, are still pumping out articles on different aspects of the acquisition at a rate of around a thousand per day across the English-speaking world.
When the news hit, it spread instantly and within 10 minutes it had reached across the globe. The GIF below shows exactly how quickly this happened, with each dot representing a new post on the topic - and it all happened within that first 10 minutes.
Drones, Prices, Competitors - Deal Could Have Many, Far-Reaching Outcomes
One of the many fascinating aspects of this deal is just how many things could happen next. With Amazon’s relentless attitude towards innovation, everyone's now expecting drone delivered groceries, ordered after a brief discussion with Alexa.
It seems to have given people a glimpse into the future . This tweet from Mashable kind of sums it up:
So exactly what were people talking about? It ranged from drones and Alexa integration to robot cashiers, but the biggest conversation point was how this would affect traditional retailers like Walmart, Target and Kroger, and the possibility of Whole Foods lowering their famously high prices:
But more recently, the discussion has switched again, with the focus now on the impact robots may have on the Whole Foods business, with robot usage in warehouses getting wide coverage across the media.
It’s an example of the many faces of this deal, and no doubt the focus of attention will continue to shift around as news of Amazon’s plans keep coming.
It’s not looking great for Walmart, Kroger and Target
What does this mean for the retail industry?
The main thread of responses suggest things aren’t looking good for other retailers, and the markets agreed, with share prices in Walmart, Kroger and Target all plummeting following the announcement.
Whole Foods’ share price, by contrast, soared, and has stayed at a high level ever since. What may be even more telling is that Walmart did actually announce an acquisition themselves - on June 16th, they bought menswear brand Bonobos for $310m - but it was completely overshadowed by the admittedly much larger Amazon Whole Foods deal:
Will Amazon Now Take Over Retail Entirely?
It will no doubt take some time before Amazon’s intentions become clear, but in the meantime, speculation will continue.
Here are a few things that social media has been discussing as Amazon continues to transform retail.
Long considered one of the few things online shopping couldn’t replace - trying on clothes before you bought them - Amazon just announced Prime Wardrobe: a “Try Before You Buy” box. Shoppers will be able to order 3-15 items of clothing to test out, keeping only the items they wish to purchase.
Since the announcement of Prime Wardrobe, there have been nearly 20,000 mentions of the service online. Many of those mentions include clothing subscription services Stitch Fix and Trunk Club, once viewed retail disruptors, which are now about to have their model disrupted by Amazon as well.
Brick & Mortar Bookstores
Ironically, as Amazon was a significant player in the reduction or flat-out demise of major booksellers (Barnes & Noble, Borders - companies which at their peak also put many independent booksellers out of business), Amazon is now getting into the brick-and-mortar bookstore business.
Not everyone is thrilled. The New Yorker’s Jia Tolentino claims “Amazon’s Brick-and-Mortar Bookstores Are Not Build For People Who Actually Read,” in an article that reached nearly 16.2 million people. The stores focus on a book’s ratings (only 4+ stars) and data to suggest new books (“If you like X, then you’ll like Y”), rather than carrying a large inventory like traditional booksellers. Prime members receive discounted pricing.
So that's our take on the social media reaction to the Amazon - Whole Foods deal, and what could come next for Amazon and the retail industry. We'd love to hear your thoughts, and for more information on developments in retail beyond Amazon, take a look at our latest retail report.
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