Amazon and Whole Foods was a shock to many people (myself included), but now that the dust has settled, it’s clear this marriage is step towards the disruption of another age-old category — grocery loyalty programs.
Amazon just announced that, starting in September, Amazon Prime customers will get discounts at Whole Foods. That means your chia seed-encrusted, kale-covered, organic tuna salad sandwich will be a little bit less expensive if you’re an Amazon Prime customer, further expanding the litany of benefits you get for being a paying member of the world’s most important loyalty program. This is probably just the first of many benefits customers will see from this merger, and it opens the door to so many other great customer benefits.
What it also does is radically change the way you look at loyalty programs. To date, most grocery store loyalty programs have been focused on discounts at the register in exchange for some basic information that allowed for online and in-store targeting and delivery of coupons. This category of shopper marketing has been evolving quickly over the last 10 years from end caps and online to further delivering value to customers. Growth has come because of the wealth of data that is aggregated through these programs, but no program has ever really had the breadth and depth of insight that Amazon Prime has. Prime customers provide insight into all kinds of purchases across all categories and channels.
Amazon Prime effectively has the single most robust view of the customer of any company in the world, even beyond that of companies like Walmart, Target and Safeway. Each of these companies routinely works with other companies to share data and activate insights but Amazon has a self-contained program with more info and more opportunity and a channel that extends beyond its borders into all areas of the web. So what does that mean for their customers and how does that affect your loyalty program experience?
Loyalty cards offer short-term value but they could offer more long-term benefits now as well. What about insights derived from inferring lifestyle choices and offering benefits on health insurance or life insurance based on this information? What if Apple partnered with Amazon to provide insights from the Health Kit to be used alongside the purchase info that Amazon has and the two companies share those insights to create more loyal and healthy customers? You could quickly get beyond the confines and category of the grocery store and expand loyalty to be an entire lifestyle of loyalists across multiple categories and connections.
Amazon certainly knows this and is finding ways to use these insights constructively. It is a notoriously quiet company so it isn’t likely to broadcast what it has planned down the line, but it is also a collection of really smart people and they know what they’re doing. They don’t take action for the sake of action; it’s always calculated and smart.
There was a funny meme posted by The Onion a couple of weeks back that essentially joked about how Amazon will eat everyone’s lunch over the coming years. They may, in fact, do that, and at the same time give you a discount on said lunch. They even make the lunch for you, deliver it to your door and eat it right there in front of you.
It’s going to be a fun run to watch!