Shopping for Bigger Data and Better Apps

Combining big data with intuitive apps to drive an anticipatory user experience at the grocery store.

E-commerce giant Amazon buying Whole Foods for nearly $14 billion was big news for many reasons, but the real significance of this acquisition may not be quite what you think. Amazon isn’t admitting that brick-and-mortar still rules retail—it’s looking at a future in which apps and big data blur the lines between real-world stores and online shopping. In this new landscape, a company’s size and market dominance may be less important than its development velocity.

Amazon is a pioneer of microservice architecture and other practices that make it possible to create new apps, fast. With that in mind, there is every reason to believe that, as it starts to gather and analyze new data on Whole Foods customers’ preferences and behaviors, Amazon will be able to quickly build mobile apps and in-store technologies designed to create an easier and more satisfying customer experience, increasing both cross-selling and customer retention.

Amazon Goes Data Shopping

The Whole Foods acquisition isn’t Amazon’s first display of interest in real-world retail. Indeed, the company is currently expanding its own chain of stores and just a few months ago was developing a new focus on selling groceries and other products that have proved difficult to move online. Understandably, reporters have called this an acknowledgement that the vast bulk of commerce (90 percent according to some reports) still happens offline.

There’s something else that Amazon wants from Whole Foods, though—and that’s data. The acquisition potentially gives the company’s algorithms access to a vast amount of information on the buying habits and in-store behaviors of Whole Foods’ large existing customer base. For Amazon, which has built much of its business on its ability to anticipate customer desires and make smart cross-selling recommendations, this could be a real gold mine.

Having said that, some experts argue that Amazon doesn’t have the most sophisticated artificial intelligence (AI) tech in the industry. So, will it be able to turn all the new data into actual revenues, and—if so—how? Arguably, the company’s real advantage here has less to do with its size, market dominance and technical advancement and more to do with its ability to quickly develop applications that create compelling new customer experiences.

Thinking Outside the Big Box

There’s a lesson in here for all sorts of enterprises. You may not be able to purchase massive retail chains. You may not have the smartest AI or the most advanced algorithms. But you can take on the practices and technologies that empower digital unicorns such as Amazon to dominate the application economy. That means API-enabled microservicesagile development practices and DevOps IT culture.

The business, technology and data assets that major players such as Amazon have access to can hardly be ignored. But it’s the ability to build powerful apps fast and create compelling new customer experiences that make it possible to disrupt the market. In the app economy, strength is often less important than speed and assets can be less pivotal than culture. It’s not about buying up the competition—it’s about anticipating and meeting customer needs.

Sam Macklin
By Sam Macklin | July 13, 2017

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