Last week, Amazon and Whole Foods announced in a joint statement that Amazon's acquisition deal would officially close on Monday, August 28. The press release included much of what consumers could expect from the deal, including a Whole Foods rewards program for Prime customers and Amazon Lockers at Whole Foods locations. Only one change, lowered prices, included an immediate timeline. On Monday, customers saw price cuts approaching 50% on some of the grocery chain’s most popular products.
At the same time, many of Whole Foods' private label products were quietly rolled out on Amazon.com. The items available for purchase range from pantry staples to frozen foods and even perishable items like sandwich meat and cheese. The various products are not all available on the same platform, however. Many items are only available through AmazonFresh, a grocery delivery service that predates the acquisition. Originally launched in 2007, AmazonFresh has gone through several iterations and subscription models, it's currently offered as an add-on for Prime customers for a monthly fee of $14.99 in select cities.
Other items are available through Prime Pantry, another service for Prime members that ships home essentials and dry goods for a $5.99 flat rate. Unlike AmazonFresh, there is no monthly subscription fee attached. While increased access to Whole Foods products on Amazon's website makes intuitive sense, CNBC also speculated that there could be more behind the deal than just integrating the two shopping experiences.
"More competitors selling in the same store could drive up demand for on-site advertising in the food and packaged goods category," Lora Kolodny, a tech reporter for CNBC explained in her article on the roll-out.
Amazon's profits come not only from customers but also businesses who are willing to pay to have their products bumped up, in much the same way Google will include ads at the top of a search. Increasing competition could have the effect of also increasing ad sales as sellers look for a way to stick out.