Amazon is serving up a new discount plan for Prime members at Whole Foods Markets.
SAN FRANCISCO — Amazon Prime members will soon get 10% off some sale items at Whole Foods supermarkets along with discounts on selected popular items. The program launches in Florida Wednesday and will extend nationwide this summer.
To get the deals, Prime members will need to download the Whole Foods app on their phone and input their Amazon login. That will create a code on their phone that the Whole Foods cashier can scan at checkout.
Customers can also link their Prime account to their phone number so that when they shop at Whole Foods they only have to tap in their phone number at checkout, a system common to many grocery store loyalty programs.
The announcement marks the most aggressive stance Amazon has so far taken to integrate the two companies, at least from a consumer perspective, said Bob Hetu, a retail industry analyst with Gartner.
“There have been gradual steps towards integrating Amazon and Whole Foods. But this is a more meaty idea, tying together this idea of providing fresh foods at a good price to Prime members,” he said.
The biggest question is whether the program will do much to bring more Prime members to Whole Foods. While Hetu expects a relatively high proportion of Whole Foods shoppers are Prime members, it’s not clear the reverse is true.
“They’re probably trying to influence those people, but the question is, is 10% enough to do that?” he said.
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Even if it doesn’t bring in hordes of new shoppers to Whole Foods stores, the system will give Amazon enormous insight into its Whole Foods shoppers, one of the main motivations for supermarkets to keep the programs running.
“The purpose of the card is to fool the customer into thinking they are getting a good deal. Well they are, if they only buy the handful of good deals on the card and nothing else,” said David Livingston of DJL Research, a grocery industry market research firm.
On the other hand, the knowledge the store gains about its customers, including where they live and how much they buy, can be very valuable
“They sell that data to vendors. Such as if a person buys one brand of cola, the competing brand of cola may put an offer on the card to try to get them to switch,” he said.
The Prime member deals will be prominently featured in stores and can also be accessed via the Whole Foods Market app, Amazon said.
Since Amazon bought Whole Foods Market in August of last year, it has been reducing prices at the stores which, though popular, had long been known by the nickname “Whole Paycheck.”
Amazon wouldn’t say exactly when the program would finish rolling out nationwide, but it’s worth noting that its big shopping event, Prime Day, typically falls in mid-July.
“You would expect us to not disappoint customers on Prime Day,” said Cem Sibay, vice president for Amazon Prime.