We reported recently that Amazon’s acquisition of the upscale grocery chain Whole Foods had caused fluctuations in the market, especially in Australia where it was widely predicted it will upset the traditional supermarket duopoly. However, the acquisition of Whole Foods is thought to have a wider impact, with the recent acquisition potentially seeing the slashing of cashier positions as it automates jobs and cuts prices.
Whilst there is no doubt that as part of the acquisition Amazon will try to keep Whole Foods’ reputations as a retailer of premium foods, it will also try to lose its ‘whole paycheck image’ by cutting prices across its range.
Amazon experts have predicted this week that there could be a large reduction in headcount and a change of inventory to facilitate lower prices to make the Whole Foods chain more competitive with its competitors such as Walmart. Some experts are expecting that the chain may try to eliminate cashiers by potentially using self pay technology which would dramatically decrease outgoings in the long term.
Amazon already has the technology thanks to its Amazon Go convenience store technology pioneered at its Seattle store which has done away with checkouts completely. Here, the technology lets people pay with their smartphones without seeing a cashier or going to a checkout kiosk. This would not only significantly reduce costs compared to rivals but it would also be an important differentiator. Those employees that do remain would be there to help provide a premium customer service and shopping experience. However, when asked if this was their plans, Drew Herdener, a spokesperson for the retail giant said that the company had “no plans to use no-checkout technology to automate the jobs of cashiers at Whole Foods and no job reductions are planned.”
Such plans may be long off and there is plenty of time for Amazon to change its strategy as the prospective $13.7 billion deal is not expected to be completed until later in 2017. However, with Amazon’s track record, there is no doubt that whatever plans they do implement will have a good chance of success and the financial markets think the same, with Whole Foods shares surging by more than 29%.
Since its inception, Amazon has always been at the forefront of technology and has led the way in countless numbers of ways which means that other retailers and businesses could follow. It’s something that many business experts are expecting, and a recent report by one of the UK’s leading business consultancies, PwC found that more than 10 million UK workers are at high risk of being replaced by robots within 15 years, as the automation of routine tasks is gathering pace year-on-year. This represents 30% of all jobs in the UK.