Dive Brief:
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Whole Foods is reportedly considering another cross-branding offer that would give Amazon Prime members special deals and an additional 10% discount on in-store sales, according to CNBC.
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The banners posted on March 28 at a Whole Foods store in Austin, Texas, stated that Amazon Prime members would get special deals just for them, plus they would save an additional 10% on hundreds of sale prices.
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CNBC posted photos of the signage taken last week, but noted that the banners were taken down the following day. "We're not testing this offer at any of our stores," a Whole Foods spokesperson told CNBC.
Dive Insight:
This trial balloon joins many other changes that have taken place at Texas-based Whole Foods since Amazon bought the natural and organic grocery chain last year for $13.7 billion.
The company is offering Prime Now delivery services from Whole Foods stores in six markets, and no doubt some of the estimated 90 million members of Amazon Prime have taken advantage of it. Amazon also gives 5% back on Whole Foods purchases to holders of its Amazon Prime Rewards Visa Card and 3% to those who are Prime members but don't have the card.
This latest offer, no matter how briefly advertised, shows there are other special promotions in the works. It could prove popular with Prime members and be a major boost for Whole Foods, which has struggled in recent years with drawing more customers due to its relatively high prices and niche products.
Any potentially advantageous move that might give the supermarket a leg up in the competitive grocery space is on the table. A recent Barclays analysis found the price gap between Whole Foods and other national grocery chains such as Kroger is narrowing, so if the company rolls out this add-on benefit to Amazon Prime members, it could help to boost the grocer's new profile as a price-cutter.
Whether special deals and 10% off existing sales would lure more Amazon Prime members into Whole Foods stores, and further erode its "Whole Paycheck" image, is hard to tell. They already pay $99 for an annual membership — or $12.99 per month — so it might be a wash for some shoppers but a boon for others. And it's also tough to predict whether Whole Foods will bring down prices even more so that it would make a significant difference.
It's clear that Amazon is continuing to build out its industry-leading loyalty program. However, a larger question is how Whole Foods and Amazon are going to solve their ongoing culture clash. That isn't the kind of challenge that sale banners and lowered prices can fix.