The next phase of Amazon's union with Whole Foods has begun.
Starting Wednesday, Amazon Prime members in Florida will get an additional 10 percent off Whole Foods products that are already discounted. The grocer typically has hundreds of products on sale at a time. It is also offering weekly deep discounts on some of its most popular items.
The promotions will begin to expand to all Whole Foods and Whole Foods 365 nationwide starting this summer.
The perks, first reported by CNBC, demonstrate Amazon's intention to marry the power of data, its membership program and loyal Whole Foods shoppers. They are its most cohesive and consistent effort to do so to date.
Shoppers can access the discounts by scanning the Whole Foods Market app or providing their phone number at checkout.
Amazon has already begun to offer other Prime benefits in Whole Foods: 5 percent cash back when members use its Visa rewards card in stores, exclusive member deals like roses on Valentine's Day and free Prime Now delivery of Whole Foods products to members in 10 cities.
Those cities now include Cincinnati, Dallas and Austin, Texas, though Whole Foods expects to scale the program more broadly.
Amazon does not yet offer Prime Now delivery in Florida, the site of the launch of its latest discounts. The Florida grocery market is largely dominated by Publix, though some of Whole Food's steepest competition has come from natural grocer rivals like Lucky's Market, which has a partnership with Kroger, and Earth Fare. Shoppers in the state tend to be price-sensitive, industry sources say.
A mighty punch
In the grocery industry — where spoiled tomatoes can crush already thin margins — shoppers' data play a compelling role in helping to efficiently stock shelves. To know shoppers is to influence them, allowing grocers to strategically offer deals when buying has dropped off.
Meantime, many shoppers now browse groceries online, but most purchase in person. The ability to combine digital coupons with brick-and-mortar shopping, therefore, gives Amazon and Whole Foods a mighty punch.
Still, it can be a delicate balance to strike. Brick-and-mortar stores are not as equipped as online retailers to react to the swift impact of digital ads. Whole Foods has struggled with empty shelves recently, in part because it wasn't prepared for its new Amazon-driven demand.
Membership programs have long been a focus among grocers. Whole Foods' loyalty program was relatively young and considered weak by industry insiders. The program ended May 2.
For Amazon, the data it gets from its Whole Foods program is one more tool to better understand how its Prime members shop and how it can get them to buy more.
It also strengthens Amazon's increasingly powerful bundle of Prime offerings, which Chief Financial Officer Brian Olsavsky recently called "the best deal in retail." Olsavsky's comments came as Amazon said it would raise Prime's annual fee by $20 to $119 per year. In addition to free two-day shipping, the e-commerce giant offers streaming of music and movies, and Thursday night football games through Prime, unlimited photo storage and other perks.
"Our vision is that every day Prime makes your life better, easier and more fun, and shopping at Whole Foods Market with exclusive deals and savings is all of this and more," Cem Sibay, vice president of Amazon Prime, said in a statement Wednesday morning.
The first week of discounts include the following items through May 22:
- Sustainably-sourced, wild-caught halibut steaks: $9.99/lb., save $10/pound.
- Organic strawberries: 1pound for $2.99, save $2
- Cold brew coffee at Allegro coffee bars: 50 percent off 16 ounces.
- Kind granola: 11-ounce bag 2/$6
- 365 Everyday Value sparkling water: 12-pack case buy one, get one free
- Magic Mushroom Powder: 50 percent off