Amazon & Whole Foods Acquisition … Change has never happened this fast before, and it will never be this slow again …

Amazon just announced the acquisition of Whole Foods for $13.7 billion. If you happen not to be a retailer let me frame this piece of news in another way. It is the same as if Apple were to announce the acquisition of Tesla – derailing the entire car industry overnight - or if Google were to acquire Samsung – cementing Android as the future operating system built into every possible wearable.

Steve Allen
 Senior VP IORMA

But it isn’t just the retail industry which is in shock, the Unilevers, General Mills, and Krafts of the world are equally affected. Overnight Amazon built an express highway from their warehouse to the home of the consumer and elevated home delivery to a next generation. If you’re a brand owner, this move is also likely to skip conventional brands altogether – all in favor for private labels. I mean what would hold Amazon back from elevating all Whole Foods private label brands to a top position online – sidelining all conventional players?

If you’re one of the lucky few (and that means not a retailer) here’s the good news – you survived this round. But chances are high that your industry soon will be featured. What to do about it? Why not try an experiment I did exactly two decades ago?

In 1997, three years after the invention of the World Wide Web – or what we call the Internet today, a gentleman from the LEGO company passed by my office, asking me for my advice on what LEGO’s future should look like. My reply – imagine plastic would be banned 5 years from now – what would LEGO do differently? That question, later on, became instrumental in LEGO’s digital innovation work. By forcing a future scenario to the present time – LEGO, well in advance, began thinking of what likely would happen with their brand in the year 2020.

LEGO never became a digital company – but did indeed cherry-pick all the best from the digital world – and years later, managed to identify the fine delicate balance between clicks and bricks, which I explored in Small Data.

The reality is that whether you’re in banking, shipping, hotels, airlines…. Well, in fact, any industry– your role should be to simulate the very same question onto your field. Try asking this question – what would be the most uncomfortable headline you could possibly imagine in tomorrow’s newspaper? Perhaps select a company that has a solid foot in the future, representing what everyone in the industry wants – including you. Then select a company that has an equally solid market share – and is truly loved by the consumer today. Then combine both – and you’ve just woken up to your ultimate nightmare.

Ask yourself what this constellation represents – and why it is so scary – then let this become the roadmap for your brand and innovation strategy.

Imagine if WalMart had acquired Amazon 10 years ago – possible? Sure! Or if VISA would have acquired PayPal? Instead, WalMart, as many market leaders tend to believe, thought they could do it themselves. Today – a decade later they’re still struggling to catch up – after four internal attempts to enter the e-commerce industry. VISA is fighting to understand the consequences of Apple Pay. Marriott is struggling to understand the true consequences of AirBnB.

Which brings me back to Amazon. With AmazonGo – their still-to-be-proven clicks, bricks & mortar store in Seattle, the organization didn’t tick the box of success with a pilot store. Instead, they jumped the queue, adapted an already pre-existing and pre-proven business model, and combined the best of both worlds into one. I bet you’ll soon witness WholeFoodsGo – where no cash registers will exist – infusing Amazon’s incubator payment model into the current retail format. And I bet you’ll soon see the drones coming, WholeFoods Dash arriving, WholeFoods one-click…

See how easy it suddenly is to imagine the future? Then don’t wait – as Graeme Wood once wrote: “Change has never happened this fast before, and it will never be this slow again”.


 

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