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How Amazon is changing grocery industry in WNY

Posted: 6:33 PM, Feb 08, 2018
Updated: 2018-02-09 14:48:39Z

Amazon began delivering groceries from its Whole Foods locations in four U.S. cities Thursday. Customers in Austin, Cincinnati, Dallas and Virginia Beach were able to purchase groceries online and have them delivered to their front door .

It's a move many have been expecting since the online retail giant purchased the grocery chain last year.

"They are going to now leverage their online expertise with their newly acquired expertise in the brick and mortar Whole Foods," explained Debu Talukdar, a marketing professor in the UB School of Management. He studies the grocery industry closely.

"The disruptiveness is not going to happen overnight but you can see the signs of that," he said.

Talukdar points to national retailers like Walmart and Target increasing their focus on online grocery orders, experimenting with pickup and delivery services. Then there's regional chains like Tops Friendly Markets and Wegman's that both partner with Instacart, an app that allows for door-to-door grocery deliveries.

"They are reacting," Talukdar said. "Amazon has set the trend, the direction. The traditional retailers are reacting to that and some of them will definitely succeed. But they have been pushed now to take actions."

Talukdar expects to see the industry continue to change, albeit gradually, over the next few years. We may not notice big changes day to day, but he says the marketplace will look very different five years down the road.

"I think that this is a movie that has just started," he said. "That much I can tell you in this industry. In our lifetime we will see a lot of change."

Whole Foods deliveries are available now to Amazon Prime customers through the Prime Now service (available in more than 30 cities nationwide). A Prime membership costs $99 per year and allows access to a variety of services and perks across Amazon's different platforms.

Prime Now isn't available in Buffalo yet and the company has not said whether grocery delivery would expand to the Amherst Whole Foods.

A year membership to Instacart costs around $150, but there is also the option to pay a fee per delivery.

 

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