Amazon’s acquisition of Whole Foods Market uniquely reconciles three of the most important attributes for a retail brand to be successful today: Cost, convenience and conscience.

The headlines give a different impression. Amazon’s opening gambit of price slashing is acknowledged as the principal threat to incumbents. The tactic fits Amazon’s well-known prioritisation of market share over profit and there are certainly grounds to think that keen pricing can entice customers through the door. The success of Aldi and Lidl in the UK makes that point.

But this focus on cost obscures what acquirer and acquiree each bring to table in terms of well-earned reputations for convenient and conscious, or ethically irreproachable, shopping respectively. These two attributes are crucial for building engagement with grocery shoppers at a time when brands must not only convince consumers to choose them, but emotionally connect and foster enduring commitment.  

The more fundamental challenge to incumbents therefore hinges on whether Amazon can be the first large scale grocer to offer convenience with none of the guilt-inducing compromises. The attributes are not easy bedfellows but I believe Amazon can and will reconcile them and reap the reward in terms of shopper appeal.

Amazon’ core proposition is convenience. This is its guiding mission:

“To be the Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online.”

This mission has translated into a colossal range of products with speedy fulfilment and low costs that had already set shoppers’ expectations for grocery shopping online before it even launched Prime Now food deliveries. Also on the horizon is Amazon’s promise to seamlessly integrate on and offline shopping, collecting and wielding its unprecedented customer insights through new retail concepts of which Amazon Go is a foretaste.

In contrast, Whole Foods Market’s guiding idea is that business does better when companies balance profitability with a social conscience. Many other consumer-facing companies such as Nestle and Unilever have also learned that responsible business benefits the bottom line.

Whole Foods Market expresses itself in this way:

“Whole Foods, Whole People, Whole Planet — emphasizes that our vision reaches far beyond just being a food retailer.”

At first glance, these ambitious business missions appear to be not only different but potentially incompatible. Amazon has a reputation for squeezing suppliers whilst Whole Foods pledges to treat them well for example.

This sense of incompatibility is compounded by Amazon’s unresolved issues in the field of ethics of the kind that might turn off natural Whole Foods customers. Witness how Amazon’s reputation has been tarnished by the way it structures its taxation.

However, these issues are overplayed. Perceptions of Amazon as an ethical company actually hover around the average for the world’s most valuable 100 companies according to some measures. The measures also show that it is trusted significantly more than its peers and this earned attribute will give it the benefit of the doubt whilst it rationalises and expands the Whole Foods business.

Significantly, the acquisition also comes at a time when other grocery chains are casting doubt on their commitment to offering shopping with a clear conscience. Sainsbury’s’ much-criticised experiment in disassociating itself with the ‘Fair Trade’ designation is a case in point.

Established supermarkets must acknowledge that they are joining battle with Amazon / Whole Foods Market on three fronts: Price slashing may pay dividends in the short term but they need to keep pace with the master of convenience, whilst not giving up the ghost on conscience. Investors in grocery incumbents are rattled but their resolve will be tested as never before as the Amazon brand evolves to give people even more of what they want.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of The Economist Intelligence Unit Limited (EIU) or any other member of The Economist Group. The Economist Group (including the EIU) cannot accept any responsibility or liability for reliance by any person on this article or any of the information, opinions or conclusions set out in the article.