We should stop being surprised by the boldness of Amazon's actions - but their latest move to offer 10% discount on Whole Foods items (and free delivery) to Prime members is a pretty striking one.
Not only does this fundamentally shift Wholefoods affordability, it also creates a huge impetus for consumers to sign up to a Prime service that many were starting to question the price of.
It should be obvious, but at $800bn the Grocery market is clearly the biggest untapped opportunity for Amazon - and it's the frequency and level of consumer spend that also make it the perfect accelerant for Prime subscriptions.
Whether the 10% discount makes long term economic sense will be interesting to watch - but the potential from democratising Wholefoods is massive and no doubt this is the bigger prize that Amazon have their sights set on.
Amazon's plan to offer a 10% discount on Whole Foods items to Amazon Prime members is a "meaningful signal about AMZN's laser focus on taking share in the $800 billion US grocery industry," Morgan Stanley analyst Brian Nowak wrote in a note to clients out Wednesday. Amazon has already been slashing prices at Whole Foods as it continues its effort to transform perception from the high-end grocer it once was to the grocer-for-the-masses it may be in the midst of becoming. And the price cuts are also a great way for Amazon to reel in more Prime customers, which was one of the main synergies Amazon had envisioned when it bought Whole Foods. The "5-10% savings on groceries (and free shipping) can go a long way toward justifying Prime membership...even at $120 per year," Nowak said.