Business Columns & Blogs

Amazon competitors beware. The Whole Foods deal shows it has speed as well as muscle.

Amazon's Echo and Echo Dot appear on sale at a Whole Foods Market in New York, Monday, Aug. 28, 2017. Amazon has completed its $13.7 billion takeover of organic grocer Whole Foods. Columnist Bill Virgin says the speed with which the deal was consummated is remarkable.
Amazon's Echo and Echo Dot appear on sale at a Whole Foods Market in New York, Monday, Aug. 28, 2017. Amazon has completed its $13.7 billion takeover of organic grocer Whole Foods. Columnist Bill Virgin says the speed with which the deal was consummated is remarkable. AP

Even by the accelerated standards of the Internet Age, the time line of the Amazon-Whole Foods deal was stunningly short.

The proposed acquisition was announced June 16. It was a done deal by Aug. 28. Most business deals, especially if they involve publicly traded companies and/or regulated sectors, take quarters, not weeks, to complete.

Nor was there any “we’ll ease in and take time to learn the business” period. No sooner had the closing occurred than Amazon was putting its stamp on Whole Foods, by slashing prices and using store space to promote its own products.

The rapidity with which Amazon completed the transaction and moved in should be the most significant lesson for those who observe the company or compete against it (which, trends suggest, is going to wind up being everyone in business).

It’s not Amazon’s demonstrated ability, through a combination of price, service and convenience, to move millions of American consumers to online commerce. It’s not Amazon’s expertise at supply-chain logistics. It’s not Amazon’s seemingly insatiable interest in new sectors to disrupt. It’s not even the considerable financial resources Amazon can draw upon to do so.

What’s most fascinating is how fast a big company like Amazon can move when one of those disruption-ripe sectors catches its eye, or when the company wants to try out a new idea.

This would be the point in a column at which we say that a certain news story or development gives a chance to pause and reflect — but with Amazon there’s no time for that.

Amazon would provide a wealth of material for case studies, but the company doesn’t sit still long enough. A bestselling book on Amazon, “The Everything Store,” was published in 2013; in Amazon time, that’s approaching ancient-history status.

Just consider what’s been going on with the company since the Whole Foods deal was announced.

Several more warehouse/distribution centers. More customers for its web-services business (which is paying a lot of the bills for Amazon). An online writing curriculum for teachers. More programming announcements. A roll-out of an instant-pickup service at select locations. Another bricks-and-mortar bookstore, this one in Bellevue Square. And this past week, a tie-in with Microsoft that allows communication between the two companies’ voice-recognition-and-response devices.

It’s not just in consumer realms that Amazon has been so disruptive.

The company sent out a release announcing it now has more than a million customers for its Amazon Business service (including King County), launched less than three years ago. The Wall Street Journal reported that’s causing turmoil for business- and industrial-supply companies that are having to up their game in service and response time if they want to hold on to customers.

Meanwhile, there’s been speculation that if Amazon is willing to buy a physical retailer like Whole Foods, it won’t stop there, and one enticing opportunity is headquartered a few blocks away — Nordstrom (which, as it happens, is an Amazon Web Services customer).

That’s a lot of initiatives, experiments and ventures, and between the time this is written and published there may be a few more. In three months’ time — more than it took to complete the Whole Foods deal — there certainly will be.

But what will they be?

What about financial services, a sector in which others have tried to create a national consumer brand (and largely failed)? Or cars? Or buying and selling homes, a sector that others have tried to move online and that Amazon could get into overnight with an acquisition)? Or media? Yes, Amazon is already a player on the entertainment side, and Jeff Bezos owns the Washington Post, but that still leaves a lot of room for it to expand into.

It’s not just the small fry that are plotting what to do in response to Amazon. Walmart and Google — not exactly minnows — announced a collaboration in which items can be ordered by voice through Google Assistant (a competitor to Amazon’s Alexa technology).

The ongoing lessons of the ongoing Amazon story are these: If you’re in retailing and you haven’t concocted a strategy for competing with Amazon, it might be too late. It’s not hopeless — there are ways to survive through differentiation — but anything you can sell, Amazon can, probably for less.

If you’re in any other type of business, you have time, but not much of it. Amazon has proven it doesn’t do lengthy contemplation. If it finds your sector and likes it, it won’t wait around to try its hand at it.

That may be the biggest disruption Amazon and Bezos deliver to business — the need for speed in decision making.

Whatever you decide to do in response to Amazon, do so quickly.

Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at bill.virgin@yahoo.com.

  Comments