- Amazon will introduce its second Prime loyalty integration at Whole Foods stores — this time for Valentine's roses, according to a press release. Starting tomorrow and running until Feb. 14, Prime members can get two dozen Whole Trade certified roses for $19.95, a savings of $5 off the full listed price. Bouquet wrapping and arranging will be available.
- Whole Foods first Prime discount came just before Thanksgiving last year, with members eligible for 50 cents per pound off organic and antibiotic-free turkeys. Those price cuts were accompanied by others throughout the store.
- “As we continue to integrate with Amazon, we plan to share additional savings, values, and promotional events with our shoppers and Prime members while continuing to support responsible ecosystems and communities worldwide,” said A.C. Gallo, president and chief operating officer at Whole Foods Market, in the news release.
Whole Foods is gearing up to take full advantage of the Amazon’s Prime program. By focusing on select products during two holiday seasons, the retailers are making sure shoppers are making that important connection between stores and the super-popular loyalty program ahead of a wider integration.
By promoting turkeys at Thanksgiving and now roses for Valentine’s Day, the retailer is offering significant discounts on fresh products consumers might be reluctant to buy online, thus attracting more Prime members who are not regular Whole Foods shoppers into its stores. The discounts are hefty enough that the retailer’s regular shoppers who aren't already Prime members might consider signing up.
At $8.25 a month or $99 for a year, Prime costs significantly more than other grocery loyalty programs (which are usually free). But the service's multitude of offers, from discounted shipping to video streaming and music, is unparalleled, and most importantly brings customers into the broader Amazon ecosystem. The most attractive offer most store programs offer outside their four walls is discounted gasoline.
While there is significant overlap between Amazon Prime members and Whole Foods shoppers – more than half, or about 60% of Whole Foods customers already are Amazon Prime members – an estimated 38%, or 5 million households, are not members, according to Morgan Stanley. As a result, tying Prime in with Whole Foods will help both entities build business.
Competing supermarket loyalty programs have been mostly stagnant for a long time. While their programs are free, there is more awareness on the part of consumers that the retailers are harvesting their data in exchange for various discounts. Supermarkets need to do more to persuade consumers that these programs are worthwhile. Amazon charges a significant fee for Prime, and still gets consumer data, but it offers far more in return.
There is some concern that Amazon might cannibalize Whole Foods’ market share. For example, products from Whole Foods’ private label 365 Everyday Value line are now offered by Amazon. But Amazon has been bringing new products into Whole Foods, such as gadgets and pop-up shops.
Prime could also help Whole Foods with its high-price image. Amazon has already been reducing prices in an effort to win customers from traditional supermarkets, and although research shows these cuts aren't impacting overall price levels, they're still driving traffic.
One question that remains is, how will Whole Foods stores verify Prime members? There are no cards that come with the program, and typing in an email address at the register doesn't seem very frictionless. During the Thanksgiving promotion, there was some confusion over how to actually claim the turkey discounts. Amazon said it would send a special email to Prime members, but it wasn't clear how members should use that email to claim their discount.
Whole Foods and Amazon will likely sort this out, just as they will likely sort out the out-of-stock issues that are plaguing stores right now. Grocers might be tempted to take comfort in Amazon's inexperience in this industry, but this would be a mistake. The e-tailer's resources, its technical wizardry and customer focus make it a threat to redefine the shopping experience in loyalty programs and beyond.