Since Friday morning a big chunk of our research team has been focused on analyzing Amazon's proposed $13.7 billion takeover of Whole Foods (click here for a one-stop shop for all of Kantar Retail's analysis).   At the same time I recorded a 35 minute podcast on the topic, but realize that 35 minutes of me talking to myself might not be everyone's cup of tea!  So, below is a "Top 10 list" of the key implications we see from this truly transformational moment in the global retail world:

1)      Amplification – Whole Foods is still a remarkably niche format in the US – only 9% of American HHs shop at Whole Foods every month, and only 7% of THOSE HHs buy most of their groceries there (0.63% of the US population).  76% of WFM shopppers shop Amazon, only 12% of AMZN shoppers today even shop in Whole Foods.  The opportunity to bring this proposition to geometrically more people is staggering.

2)      Democratization – Amazon’s economic model  will allow WFM to be more price competitive (obviously) and in different ways, bringing a naturals lifestyle to a much larger audience (which today the mainstream retailers had been doing a pretty good job of).

3)      Credibility – today, 54% of WFM stores are in Amazon Fresh markets – that number will be over 70% by this time next year.  Expect AMZN to use WFM brand to build its fresh reputation.

4)      Optimization – WFM is a good operator, but has underinvested in systems/technology.  AMZN knows how to apply tech to solve problems.  They’ve mastered space travel and invented the Kindle and distributed cloud computing – making a grocery store work a little bit better isn’t the hardest problem they’ve ever solved.

5)      Non-foods – AMZN probably does a better job in categories WFM already sells (like beauty, for instance) of letting natural brands tell their story than WFM does.  A real opportunity for those brands to scale rapidly.

6)      Data – expect AMZN to lean way forward on using mobile to gather data on WFM shoppers with much more granularity.

7)      International – AMZN sees enormous potential for WFM to act as a “Beacon” for its international fresh strategy.  Do not be surprised if WFM stores open in Berlin, Barcelona and Paris bannered as “AmazonFresh Market” not “Whole Foods Market”

8)      Choice – the ability to walk through WFM as an Amazon Prime/Fresh member and buy the categories you want to spend more on in WFM, while being able to simultaneously trade back to “conventional” in categories you don’t want to spend big $$$ in on you phone in real time is incredibly powerful and is the killer shopping app here – this really targets the mainstream grocers who were selling this blend of premium and value like Kroger, Safeway and the US regionals.

9)       Counterbid? - as of Monday EOB Whole Foods stock is trading above the $42/share Amazon acquisition price, and a counterbid makes some basic sense, but it's hard to see in real life where that bid would come from.

10)     Cost - also as of today Amazon's market capitalization has gone up by more than the Whole Foods acquisition cost - from a shareholder value perspective Amazon bought Whole Foods for free.

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