Dive Brief:

• Amazon will offer a "Spend $10, Get $10" promotion on purchases at Whole Foods Market, Amazon Fresh, Amazon Go and Amazon Go Grocery locations for Prime members, the company announced in a blog post on Tuesday.
• The promotion, which began on Tuesday and lasts through Prime Day on Oct. 13 and 14, allows members to earn up to $50 in credit. It applies to in-store purchases at Amazon Fresh, Amazon Go, Go Grocery, Amazon Books, Amazon Pop Up and Amazon 4-star, as well as purchases both in-store and online from Whole Foods Market.
• To receive the credit, customers can use their Amazon app tied to a Prime account, use a linked mobile phone number or use a Prime account at checkout.

Dive Insight:

Experiencing a flood of demand following the onset of the coronavirus pandemic, Amazon delayed its Prime Day, usually held in July, until October. Grocery retailers including Walmart and Target have said that a traditional Black Friday will not occur this year, but have indicated plans to rival Amazon’s Prime Day and holiday sales discounts. 

Amazon, which saw its year-on-year sales increase around 40% in the second quarter of 2020, is in an enviable position going into the holiday months. Its "Spend $10, Get $10" promotion demonstrates a desire to monopolize consumers across discrete industries, both retail and grocery. It is likely also aimed at boosting foot traffic long-term at Amazon’s new Fresh and Go Grocery locations, which have opened only in the last couple of weeks, and where Amazon is trialing new grocery shopping features such as its Dash Cart.

Last year’s Prime Day, which included a similar "Spent $10, Get $10" promotion for Whole Foods Market purchases as well as a number of discounted products, had limited success in creating excitement for its grocery offerings, industry experts previously told Grocery Dive. It did, however, see a substantial boost in signups for Prime memberships. 

As the e-commerce giant has crept further into the grocery segment, including in the more conventional in-store models of Fresh and Go Grocery, its existing Prime membership benefits program provides the advantage of an existing and loyal consumer base. As Doug Stephens, founder of Retail Prophet, said in an interview last year, Amazon’s Prime program is a “strategic vehicle for Amazon” to allow it to then work on “moving people over to some of these physical assets like Whole Foods”. 

The Prime Day deals in collaboration with Whole Foods also enable the e-commerce retailer to further bring the upscale grocer into the Amazon "ecosystem." Whole Foods Market deals on products, including organic Honeycrisp apples ($2.69/lb), beef short ribs ($5.99/lb) and wild-caught shrimp (30% off) from Sept. 30 to Oct. 6, are also a likely attempt to broaden the grocer’s image from that of a hyper premium outlet. 

Amazon’s decision to stretch out its "Spend $10, Get $10" over several weeks also reflects how it is adapting its rapid-fire online discount approach to brick-and-mortar, where more time is required to affect consumers’ grocery shopping habits.