How Amazon Just Permanently Solidified Health & Wellness at Retail

June 21, 2017
Retail Industry Insights

By Monica Amburn, MS, RD, LDN

Real talk today, everyone. Because last Friday the retail game changed for all of us. And by now you’ve likely read a few articles on how the Amazon/Whole Foods deal will impact the supermarket retail industry, and our own Supermarket Guru, Phil Lempert, is sharing his insights with us today as well. But, my inner optimist (call her Pollyanna, if you will) thinks that this deal has just completely, and likely unintentionally, revolutionized the nutrition game in retail for good. 

Yes, we know why Amazon would see Whole Foods as a desirable acquisition target: entree into brick & mortar retail, almost immediate scale for online ordering and delivering of fresh foods in all major US metro areas, and a no-brainer way to increase overall online grocery business in a relatively short amount of time. Make no mistake, Amazon made a very smart move.  And yet, very few analysts have mentioned the potential implications for health and wellness at retail, as most likely don’t see this as a decision-driving factor for such an acquisition. While the wellness play may not have been a motivator, this is the silent part of the deal that makes me most excited, for these three key reasons.

#1 – “Healthy” and “Better for You” foods may drop in price

Is this not the holy grail for dietitians? I mean, what could be better when counseling shoppers than eliminating (or at least reducing) the argument that “healthy is more expensive.” But how could Amazon help make this happen? By being the behemoth they are, they could easily put pressure on their suppliers (we’re looking at you, UNFI) to lower their prices, while lowering their own profit margins as well, to make both grocery shopping at Amazon and Whole Foods more attractive than traditional retail. And we know that traditional retail will fight for these reduced prices with their suppliers as well, theoretically resulting in more affordable prices in traditional stores as well. 

#2 – Whole Foods has been stabilized

Whole Foods has had a rocky past in financial performance for various reasons, including their overall pricing strategy, store comps, and a few not-so-great media exposures ranging from overpriced pre-cut produce to the “Whole Paycheck” reputation. Amazon stepping in immediately gives investors and shoppers alike a sense of relief, as we all know that Amazon knows how to make shoppers happy. And if Amazon is willing to invest in a new company, they are going to course-correct any pain points so that they can continue to do what they do best – make shoppers happy. By doing this, they will also be preserving the most famous health and wellness retailer brand, and infusing it with life. Which means the rest of the traditional supermarket industry must not only continue to promote health and wellness, but figure out how to compete on a more meaningful scale in this space beyond just item and price. All traditional retail needs registered dietitians/nutritionists to do this both effectively and responsibly, so see this as a possible source of job security for the years to come.

#3 – Nutrition is now a retailer search engine “must have”

Let’s play a game: Open up your web browser and enter amazon.com/grocery. Scroll down and keep your eye on the left column. You will quickly find that Amazon has created search functions for various nutrition and lifestyle attributes, such as Non-GMO, Organic, Gluten Free, Calories per serving, and so on. It is very comprehensive. Interestingly enough, Whole Foods and Instacart (for Whole Foods online ordering) have not yet mastered this “search by nutrition attribute” capability, but it is just a matter of time before this is remedied by Amazon’s know how. And this will eventually become a search function feature that all retailers will be expected to provide.

This is where healthyAisles® and Vestcom can immediately step in to help traditional retail to be competitive against such search function capabilities. Now with over 75 attributes in our nutrition and lifestyle attribute library, we can immediately work with retailers to use the same nutrition information promoted at the shelf edge, and convert it to search engine-ready data that online shoppers will be looking for. And as evidenced by Amazon’s savvy, and unintentional-yet-powerful commitment to health and wellness, we see this feature as a new standard of “business as usual” for years to come. 

In summary, this moment could very easily be viewed as “the best of times, and the worst of times” for those of us working in retail. No doubt, there will be plenty of aftershocks from the Amazon/Whole Foods deal for the foreseeable future in traditional retail. But in the end, this level of disruption will most likely make supermarkets all the better for shoppers. And in the process, health and wellness will become further engrained in the business model of retail, making the value of dietitians in retail that much greater. Call me Pollyanna (or crazy), but in the end, I think this is mega acquisition is awesome news for nutrition at retail. 

Monica Amburn, MS, RD, LDN is a former supermarket dietitian, and currently the Senior Director of Health and Wellness for healthyAisles® at Vestcom. Monica works with the healthyAisles® team to develop and deliver custom healthyAisles® shelf-edge and online attribute programs to over 30 banners and 15,000 stores nationwide. Monica can be reached at mamburn@vestcom.com for any healthyAisles® marketing, sales or information requests.