Applying this philosophy to Whole Foods could be a very big deal.
Right now, after all, pretty much everyone already agrees that Whole Foods is a nice place to shop. The issue is that it’s expensive — saddled with the nickname “Whole Paycheck.” But if you decided you didn’t really care about profits, it would be simple to address this complaint by just making things cheaper. People would like the lower prices and the increased demand they would stimulate would justify opening up more locations.
What good would a medium-sized chain of unprofitable upscale supermarkets do for Amazon? Well, optimistically it would supercharge their grocery delivery ambitions.
But critically, even if that strategy doesn’t work out, Whole Foods could deliver value to Amazon without necessarily delivering profits. The stores would create a useful additional channel for selling Kindles, Echoes, Fire TV boxes and other Amazon hardware. And by linking discounts to Amazon Prime membership, it could drive sales of those. More subtly but perhaps more importantly, encouraging Whole Foods shoppers to in some sense “log in” with their Prime accounts would generate tons of new user data that could feed the larger Amazon beast.
And of course lots of stuff that Whole Foods sells is canned, packaged, or dried — i.e., perfectly suited to Amazon’s longstanding and very successful e-commerce business. Acquiring Whole Foods’ brands and supplier networks could be very useful enhancements there.
The bottom line is there are lots of ways that a cheaper, but fundamentally similar, version of Whole Foods could contribute to the Amazon gestalt even while run as a zero-margin business.