In case you were hibernating or out of range of cell cover or WiFi during the last few days, you know that Amazon has made an offer to acquire Whole Foods.
This places the largest online merchant in direct competition with some of the largest retailers in the US – grocery stores – and continues Amazon’s move into “bricks and mortar” businesses.
On this blog Paul and I have been writing about the importance of innovation in platforms and ecosystems.
With this acquisition, Amazon is attempting to extend its platforms into the “real” world and link up its power in the online world with physical stores. Amazon understand a lot about attracting customers to its site, and does a reasonably good job at distribution. Amazon gains a trusted “bricks and mortar” company that is respected (or sneered at) by consumers. Whole Foods isn’t nicknamed “Whole Paycheck” for nothing, and there are some interesting dynamics between a company that isn’t concerned with profits and a company well-known for top of the line products and good customer service. But we aren’t here to evaluate the integration of these companies, as much as to identify an ecosystem gap.
Amazon and the last mile problem
It had to come to this eventually. The emergence of Blockchain and distributed ledger systems illustrates how innovation is moving from focus on products and services, which are interesting but don’t provide a long-lasting competitive advantage, to a focus on platforms and ecosystems.