Amazon is gearing up to offer its Prime members new benefits centered around Whole Foods — including discounts on food items.
CNBC, citing sources, reported that the new benefits are aimed at bringing Prime more into the fold when it comes to groceries and giving its vendors, which tend to be niche and small players, access to Amazon’s shoppers. The report noted that around 75 percent of Whole Food shoppers are Amazon Prime customers but under 20 percent of Amazon Prime members shop at Whole Foods. With the new perks, Whole Foods will give Prime members an extra 10 percent off discounted food items and other products. It already started offering free delivery of Whole Foods products to Prime members in select locations around the country, 5 percent cash back when Prime members use a Visa rewards card at Whole Foods and deals that are exclusive to Prime members.
The idea behind the new Whole Foods perks is to increase its bundle of Prime offerings, for which Amazon is raising the annual fee by $20 to $119 each year. With promotions and discounts commonplace in the grocery market industry, Whole Food is aiming to use them to go after Amazon shoppers. For the vendors, it’s a new opportunity to reach potential customers and boost sales amid fierce competition. Organic brands have had a tough time getting U.S. market share — they’ve been accounting for under $500 million in sales and holding market shares of just one or two percent, reported CNBC. With the new Whole Foods perks, the brands could reach more people.
The new perks come as Whole Foods Market has informed customers that it is shutting down its rewards program, which will most likely be folded into the Amazon Prime program. According to media reports from last month, the national grocer sent an email to members stating that the loyalty program will end, and all online accounts will be closed Wednesday (May 2.) “Stay tuned for additional announcements for Amazon Prime members,” reads the Whole Foods FAQ page focused on digital coupons, rewards, and online accounts. “Any account benefits, including membership and/or unused rewards, will not roll into any future programs.” Amazon has implemented several changes since acquiring Whole Foods last year, such as price cuts on certain items and 5 percent cash back on purchases when Whole Foods customers pay with the Prime Rewards Visa.