I do the grocery shopping for my household.
And that means that every time I go to the store, I eventually must play the checkout game.
[ad#Google Adsense 336×280-IA]I have to examine the lines and find the one that I think is going to move the fastest based on the number of items each person in front of me has… whether they’re a “talker” or not… and whether they’ll freeze up the register by paying with a check.
Some people were confused by Amazon’s (Nasdaq: AMZN) recently announced $13.7 billion buyout of Whole Foods (Nasdaq: WFM).
I was not.
And that’s because I believe that we’re well on our way to a cashless society.
For the most part, we’re already there. No one carries cash anymore. And among the younger generations, the idea of carrying a wallet is becoming outdated.
If you haven’t noticed, whenever you’re out shopping, more and more, people are paying with their smartphones. And most retailers – even grocery stores – offer tons of mobile coupons.
I don’t often cheer acquisitions. But this is one that sparked me to send an email with a couple of exclamation points.
It’s one of those things I’ve been waiting for from Amazon.
Last year, Amazon began live testing a grocery store concept, Amazon Go, in Seattle, Washington. It’s all about “walk out” technology.
There are no cashiers or registers.
As shoppers enter the store, they tap their smartphones at a turnstile. This links to their Amazon accounts. And the shoppers simply pick the items they want off the shelves and walk out. The store keeps track of what was purchased and charges their Amazon accounts.
No fuss. No muss. It’s the grocery store of our dreams where there are no lines at checkout.
Amazon Go is the brick-and-mortar of the future. But Amazon isn’t the only company using the internet to improve the grocery shopping experience.
Already, there are grocery delivery services like Peapod and Fresh Direct, as well as grocery pickup services. Even Wal-Mart (NYSE: WMT) and Kroger (NYSE: KR) have been focused on online sales.
Currently, 25% of all Americans buy at least some groceries online. In fact, in 2016, the amount of groceries purchased online was equivalent to the sales of 764 grocery stores.
Over the next decade, the percentage of Americans who purchase some groceries online will increase to 70%.
And by 2025, 20% of all grocery shopping will be done through digital channels. That’s a fivefold increase from the current 4.3% of all grocery dollars being spent digitally.
But here’s where the worlds of Amazon and Whole Foods collide… They’ve both pioneered mobile payment for groceries.
There’s only one brick-and-mortar store that sees more Apple (Nasdaq: AAPL) Pay transactions than Whole Foods does…
Last year, the monthly number of Apple Pay transactions increased 50% over 2015. It still has a long way to go to unseat standard credit card purchases.
For Whole Foods, 1.7% of all credit card transactions were made with Apple Pay. That’s more than four times the national average.
This data backs up something that I see firsthand… Consumers love shopping at Whole Foods because you don’t need to bring your wallet. The grocer has gotten customers to embrace technology.
This is why I wasn’t surprised by the Amazon purchase of Whole Foods – and why you shouldn’t be either. The two companies were working toward the same goal.
On the announcement, Whole Foods popped. And its competitors cratered.
Grocers like Kroger were already under attack by Amazon, Wal-Mart and Target (NYSE: TGT), as well as high-end chains like Whole Foods. Now two of those forces have combined. And Amazon’s foray into the real world – the brick-and-mortars – has a secure foothold… including a customer base that already embraces the technology Amazon wants to unleash.
Source: Investment U