I heard the news today, oh boy — Amazon is buying Whole Foods Market in a deal worth nearly $14 billion. The combination of these iconic companies, both of which have come of age in the last two decades, raises obvious questions. Does the transaction reflect how hard it’s been for Whole Foods to keep Wall Street satisfied with its growth and profits? (It does.) Does the deal underscore just how expansive a vision Jeff Bezos has for Amazon, his dream of it becoming the “everything store”? (No doubt.)
Amazon, Whole Foods, and the Future of the (Old) New Economy
Amazon is buying Whole Foods Market in a deal worth $14 billion, and perhaps the biggest question is what the deal says about the future of an approach to business, branding, and organizational culture that the two iconic companies have come to represent. Some observations that could shed light on this include, first, that with great disruption comes great responsibility… to Wall Street. Despite its success, Whole Foods never won over investors. Second, success sows the seeds of its own undoing, unless you keep rethinking how you succeed. Whole Foods changed the food game in America, spawning copycat brands and convincing established, major supermarkets to carry organic options. But turning breakthrough ideas into long-term success means continuing to refresh, renew, and rethink those ideas. Third, the logic of either-or competition has given way to the power of both-and competition. Whole Foods has a high-service, high-engagement, democratic culture centered around high-end physical, in-store experiences; Amazon is all about automation, technology, affordability, and speed in the virtual economy. Perhaps those models will be stronger together than they are apart. Finally, and a bit unsurprisingly, exceptional leadership really matters. Few leaders could pull off what Jeff Bezos is trying to do with Amazon, but Jeff Bezos just might be able to.