business news in context, analysis with attitude

The Wall Street Journal writes this morning about how Amazon likely sees Whole Foods as an appealing takeover target not because of what it sells, but because of who it sells to:

"Amazon for years has been looking for more ways to gather information about how consumers shop. It has long been rumored to be on the prowl for a breakthrough deal, even as it set up its own much smaller Amazon Go and AmazonFresh Pickup stores as experiments.

"If the deal goes through, the combination likely will be powerful. Amazon and Whole Foods can join their online and in-store knowledge to better predict what goods to carry in each store, said James Thomson, a former senior manager in business development at Amazon and now partner at the brand consultancy Buy Box Experts.

The analysis goes on:

"Amazon likely will implement changes at Whole Foods based on what it finds out about the grocery chain’s shoppers, including changing prices and selection—something right now that can vary widely based on the region, according to the former employees.

"The data Amazon collects will likely help it decide which of its growing roster of private-label brands to expand and which new ones to launch, especially when it comes to consumables and food. Whole Foods already has a large private-label business.

"Bringing together online and offline data can help Amazon learn how to entice customers to make more impulse purchases online, according to analysts and retail consultants."
KC's View:

Know this. A comprehensive and intimate understanding of how people shop and what they buy is going to be a basic requirement for every retailer doing business. Putting ads in the newspaper or sending off coupons will be unacceptable in the current environment. You have to be targeted.

To use an example I've often cited here, there will be no excuse for sending cat food coupons to dog people. None.