06-29-2017, 10:04 AM
Jeff Bezos has hit the trifecta of megatrends now that Amazon has announced plans to add Whole Foods to its portfolio. Megatrend No. 1 is the digital transformation of our world, which Amazon was already leading. We’ve been told time and again how digitization is affecting all aspects of life, from retail purchasing to health care management. As Amazon knows, doing this well also creates a database that is itself huge, valuable and positioned for long-term commercial success. Megatrend No. 2 is the widespread recognition of the importance of healthy living and lifelong wellness, which Amazon now has in its grasp with the Whole Foods acquisition. Businesses from pharma to food have realized that healthy, active lifestyles are the key to prevention and wellness, and they are seeking opportunities to capitalize on it. For example, Nestlé recently announced that it may sell some of its candy business as it transforms into a health sciences behemoth. Amazon’s pivot toward the health and wellness space is one more signal that the business world is pursuing the commercial benefits of this area. Megatrend No. 3 is the biggest of all – the aging of society. Mr. Bezos now has this in his sights as a natural consequence of the first two megatrends. He may not even know it yet, but this is a place where real value can be created, but which others often don’t quite get. With a billion of us over 55 – and doubling in size over the next few decades -- aging will be the most important megatrend to drive huge revenue growth in the years to come. This is driven by fundamental demographic forces.
How Amazon could dominate 3 megatrends of the 21st century - Business Insider
Tuesday brought Amazon Prime Wardrobe, where the online retailer tackles the biggest problems of buying clothes: 1) the time it takes to shop, 2) the hassle of finding the size that's right for you, and 3) returning stuff you don't want. Judging by the market's reaction, it looks like the Street believes Amazon has advanced the ball considerably: Nordstrom closed down nearly 4 percent, JC Penney more than 5 percent, and Ascena Group and Chico's more than 4 percent. Even discounters like TJX and Ross Stores fell 3 percent and nearly 5 percent, respectively. It's a simple idea: try before you buy, and only pay for what you keep. Pick out three items or more, and you get shipping for free (if you're a Prime member of course). You have seven days to try the stuff on and decide what you keep.
Amazon strikes again: Nordstrom, JC Penney tank on 'Prime Wardrobe'
After its stock pop, Amazon got Whole Foods essentially for free. For free? Well, if you consider the increase in market capitalization that Amazon is seeing midday, the answer is yes. Here's the math: Amazon is paying $13.7 billion in cash for Whole Foods. Amazon's stock was up $32 and change mid-morning. There are 478 million shares outstanding, so Amazon's market cap has appreciated by about $15.6 billion today. So, you could argue, they are getting Whole Foods for free, and pocketing $1.9 billion as well.
After its stock pop, Amazon will get Whole Foods essentially for free