I had a phone call earlier today from a journalist wanting my comments on Amazon, as apparently FMCG wholesalers across the pond are having sleepless nights about what they are doing in the market.
Should we be concerned here in the UK? Should we be looking over our shoulders? Or should we just crack on with what we are doing – business as usual? I would say the latter, but I tend to err on the positive side of life, so may be over-optimistic. Yes, Amazon have the power and size to completely disrupt the food and drink market if they want to. Yes, they will “own” the home delivery space for all sorts of products. But do consumers, particularly, at the premium end of the market trust Amazon for their speciality food shopping?
This debate has been brought on by the recent acquisition of Wholefoods by Amazon. I happened to be in the same room as John Mackey, CEO of Wholefoods, last week. He described the courtship of Wholefoods by Amazon as “love at first sight” and a “whirlwind romance”, but then he would, wouldn’t he? Wholefoods were under massive pressure from their share-holders to find a buyer as sales were tailing due to other grocers upping their game and coming into the natural and organic market in the USA. Whilst the directors may have got on like a house on fire, I know the staff at Wholefoods are bracing themselves for a huge culture clash. Wholefoods treat their staff well; the staff feel part of the mission and we, as a supplier, have always been treated well. According to several journalists’ reports, Amazon do not treat their staff well, and certainly treat their supplier appalling form some stories I have heard. Impossible to resolve queries, random extra charges levied, 120-day payment and refusing to pay for goods where there is a signed “proof of delivery” as the goods hadn’t arrived.
And customer too might raise an eyebrow or two. Amazon is far from a cuddly brand like Apple which they feel very close to. Customers of Amazon have few “feelings” for them – just that they are supremely efficient and convenient. Wholefood’s customers love the theatre, merchandising and quality of the products they buy in store.
As bricks and mortar retailers or suppliers thereof, maybe we could be encouraged that an on-line retailer has just bought 450 bricks and mortar stores. They do not think that everything will go on-line and they have realised that fresh food counters, with experts talking to them with knowledge about the products is need to sell premium products. I think they could be right about this. Let’s hope they value the staff at Wholefoods and that more of the Wholefoods culture infects Amazon rather than the other way round!