Two big purchases made late last week, including one by Amazon, have many wondering what retail will look like in the future.
If you live in the Pacific Northwest, there’s no doubt the feed on your Facebook account was filled with news of Amazon’s purchase of Whole Foods. That news at least partially overshadowed Wal-Mart’s $310 million purchase of Bonobos.
Though the price tag of Bonobos was significantly less than that of Amazon’s purchase of Whole Foods, it’s a move that analysts point to as Wal-Mart’s strategy to compete with the Internet giant.
Are we just going to end up with two retail companies?
“It’s starting to feel like that isn’t it,” Business Analyst for CBS News Jill Schlesinger told Seattle’s Morning News.
In her blog, Schlesinger writes that Americans will either be shopping at Amazon or Wal-Mart.
That’s overstating the situation, but after Amazon announced that it was buying Whole Foods for $13.7 billion and Wal-Mart … said it had purchased online men’s retailer Bonobos for $310 million, the retail landscape shifted once again.
Both companies are realizing they can’t be 100 percent retail or 100 percent brick-and-mortar, she added.
What makes Amazon such a threatening foe for other retailers is the company’s history of making things more efficient. Schlesinger points out that about 10 percent of inventory at grocery stores gets thrown out.
“If you think about inventory management, boy, who better than Amazon to attack that problem?” she asked.
However, Amazon’s purchase of Whole Foods should have others in the market worried, Schlesinger says. That includes Instacart, an online grocery delivery service that partnered with Whole Foods and Costco.
“You don’t know how things will be disrupted and you probably don’t have the money to compete,” Schlesinger said of Amazon entering the market. “They have enough money to patiently wait until you can’t compete with them anymore.”