Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
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A U G U S T 2 0 1 7 / S C T 7 These benefits are part of the reason a major real estate move by Amazon was hardly unexpected in the grocery sector, McKeska says. "I am not surprised, per se, and I don't think many grocery executives were shocked either," he said. "It has been clear that at some point Amazon was going to need to get into the brick-and-mortar busi- ness on the grocery side if it was going to have any chance of making a signifi- cant dent in terms of grow- ing its market share." The potential reverber- ations are profound and could affect the e-commerce market, the price of food and nonfood products in the U.S. and the pace of auto- mation in retail, according to Todd Maute, a partner at New York City–based CBX, a brand agency and retail consulting firm. "It will be very interesting to see what happens in these stores," Maute said. "Are we going to see Amazon try to automate the checkout pro- cess, which they're already testing at their Amazon Go store in Seattle? Will they bring in pickup and drop- off stations, Amazon lockers and the like? This really could be the jumping-off point, not just for grocery to go omni-channel in a major way, but also for some pretty big changes in how we shop brick-and- mortar stores." Maute, whose focus includes private-label products and branding, says Amazon's private-la- bel products could easily show up on Whole Foods shelves. Amazon could also leverage its economies of scale to bring down prices at the notoriously expen- sive retailer, putting more pressure on discounters and other competing chains. "Walmart, Kroger and Publix are all racing to develop click-and-col- lect capabilities," he said. "Now they're staring down the barrel of going head- to-head with Amazon on both price and, even more daunting, convenience." (Kroger Co.'s stock plum- meted by 9 percent the day after the Amazon–Whole Foods announcement.) Maute will also be pay- ing close attention to how the Whole Foods deal affects the use of the voice-acti- vated Amazon Echo device. "I can see Amazon giving you a significant discount if you start ordering your groceries by voice as you stand in the kitchen," he said. "That's the holy grail of what some people are call- ing 'v-commerce' — that is, voice commerce." Some are already calling for the Federal Trade Com- mission to put a stop to the deal on antitrust grounds, but McKeska is skeptical. Brick-and-mortar grocery is a new business for Amazon, so this is hardly Coke buy- ing Pepsi, he notes. "Know- ing how the FTC looks at these things," McKeska said, "I would be very surprised if there was any issue." n