Amazon.com Inc.’s (AMZN) acquisition of Whole Foods Market has already resulted in an increase in foot traffic to the tune of a 25% rise since closing the deal on Aug. 24.
Foursquare Labs, the location intelligence technology company, complied location data during the first two days after Amazon became the owner of the organic food supermarket chain and found that price cuts lured more shoppers to the stores. The data, which is analyzed anonymously, was compared to the same time frame a week earlier, reported Bloomberg. The 25% uptick is good news for the e-commerce giant, which is trying to transform how we shop in physical stores. While a portion of that increased foot traffic could be more about curiosity than eating healthier, the lower prices are also likely helping. (See also: How Amazon Benefits From Lower Prices at Whole Foods.)
Price and Value
When the Seattle-based online retailing giant announced the closing of the deal, it revealed plans to slash prices for popular products at Whole Foods. It is also planning to expand its Amazon Prime rewards program to Whole Foods customers and is establishing lockers for e-commerce deliveries at the retail chain. Prices for popular Whole Foods products, such as organic salmon, baby kale and bananas, were lowered on day one and expectations are high that more of the same is coming. According to Bloomberg, price cuts were as high as 43% on a range of items on the first day under Amazon.
"We are determined to make healthy and organic food affordable for everyone," said Jeff Wilkes, CEO of worldwide consumer at Amazon, in statement at the time. A strategy consultant who worked at Amazon earlier said that prices for popular products could go down by as much as 25%. (See also: Amazon Announces Lower Prices for Whole Foods Products.)
An uptick in foot traffic this early on is seen as a confirmation that Amazon can successfully operate physical stores. Foursquare found foot traffic was up 35% in Chicago, reported Bloomberg. What remains to be seen, however, is if shoppers will continue to purchase organic food from the chain. “A lot of people went to see what they could see,” said Jennifer Bartashus, an analyst at Bloomberg Intelligence, in the report. “The question is if they think the prices are low enough to change their shopping behavior—it takes a very long time to change a consumer’s perception of prices and value.”