Amazon's recent purchase of Whole Foods Market demonstrated its ambition to dominate both online and brick-and-mortar retail. Eyes are on Amazon as to what will be its next step.

Many consider the takeover as a risky move by the online retail giant. Although being known as the first certified organic grocer in the US, Whole Foods has experienced six consecutive quarters of sales decline. Whole Foods’ excessively high pricing is blamed for putting consumers off, leading to reduced foot traffic and eventual sales decline.

So why does Amazon still want Whole Foods?

While the public focuses on the high profile launch of cashierless grocer Amazon Go, few have noticed that Whole Foods’ new "365 by Whole Foods Market" – a more affordable version of the regular store – adopts a similar concept to Amazon's new addition: both include smart shopping technology that is partially or fully automated, and involve smartphone apps as part of the shopping experience. 365 uses an iPad app to replace in-store expert advice for product choices, while Amazon Go completely relies on app technology to track and record purchases so that no checkout is required.

365 by Whole Foods Market aims right at the money-saving culture in the US. Although 41% of US consumers agree their disposable income is increasing, price and promotion remain the most influential factor in their product choice across food, non-alcoholic beverage, beauty & grooming, and household care & laundry, according to GlobalData’s Q3 global survey, 2016.

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365 by Whole Foods also has the advantage of being associated with Whole Foods’ image of being natural, organic, humane, good for animal welfare and the environment, without having the high price tag for which the parent brand is infamous. It also introduced in-store "hangout" areas such as vegan café, craft beer bar, combining socialising and shopping.

In other words, 365 by Whole Foods has the whole package to appeal to today’s tech-savvy, time-poor millennials by offering convenience, health, value, and a multi-sensory experience under one roof. In particular, the designated "hangout" areas add more human elements to a digitised store, a unique feature that helps differentiate it from its competitors.

The attractiveness of 365 by Whole Foods might have been the real motive behind Amazon’s acquisition. Since Amazon Go is still a trial, it may need to partner with a more established FMCG retail brand with a similar concept to minimize risks and strengthen brand identity. If Amazon Go's futuristic approach to shopping happens to work well with 365's value-driven and hipster-targeting strategy, then Amazon's ambition of driving the evolution of grocery retail will come true very soon.