Amazon sold almost $500k of Whole Foods private label items in week one post deal, says One Click Retail

10-Sep-2017 - Last updated on 11-Sep-2017 at 16:42 GMT

Amazon moved quickly to add Whole Foods private label items to its Prime Now and Prime Pantry platforms post the acquisition, notching up sales of almost $500k in week one, but ran into inventory issues pretty rapidly after underestimating demand, says ecommerce data firm One Click Retail.

One Click Retail has been closely monitoring Amazon’s sales data since the Whole Foods acquisition and has noted some significant impacts felt thus far, CEO, Spencer Millerberg told FoodNavigator-USA.

First, Amazon had an entire ‘mod reset’ that resulted in over 2,000 Whole Foods items available on Amazon in week one, he said. “This resulted in almost $500K of Whole Foods items sold in the first week after the merger with top selling items including water, turkey breast lunch meat, frozen berries, canned beans, coconut water and tomato paste.

“To see this kind of interest is unusual, it’s three times the response we’d typically see on new items added to Amazon.

“Items were almost entirely sold via Amazon’s secondary platforms of Prime Pantry and Prime Now [rather than Amazon.com], and Amazon was unprepared for the reality of the sales. Inventory was very, very limited. Of the top 100 selling [Whole Foods private label] items on Amazon, only 7% remained in stock [after the first week].”

Further acquisitions on the cards?

While there has been an enormous amount of media hype following the Whole Foods deal – which gives Amazon almost 500 new locations to serve as pick up points for online orders or as delivery hubs - Millerberg said Amazon would likely need to acquire more physical locations if it wants to really move the needle.

“Walmart is all about suburban and rural customers, whereas Amazon [Fresh/Prime Now] is about urban locations with high density, and if Amazon is going to really reach the masses [with fresh food] you’ll have to see more acquisitions with substantial real estate in those areas where they don’t currently have a presence.”

No one size fits all solution to food ecommerce

What the Amazon/Whole Foods deal makes clear is that there is no one size fits all model when it comes to food ecommerce, with multiple options being explored from click and collect models to home delivery, store picking and warehouse picking, he added.

“Walmart has something like eight different options. There is no one answer to fit every single need. You can’t deliver a fridge pack of coke or a pack of gum profitably using any of the methodologies that Amazon has been testing. Neither Amazon Fresh nor Prime Now have generated significant traffic or traction, so I think Amazon saw that they were only going to really move the needle with a bricks and mortar presence.”

As a percentage of the overall grocery retail market, Amazon’s $420m in Q2 grocery sales in the US were pretty small fry. But its 50% year-on-year growth is making the whole industry pay attention, says One Click Retail. Read more HERE.