Amazon May Double Whole Foods’ Customer Base Through Prime

With new Prime incentives, one tech analyst believes that Amazon could double the customer base of Whole Foods. RBC Capital Markets’ Lead Internet Analyst Mark Mahaney said that there could be 20 to 30 million people who live near a Whole Foods store but don’t shop there on an ongoing basis, while there are about 60 to 70 million Prime customers in the U.S., CNBC reported.

“[Amazon] could double, theoretically, Whole Foods overall customer base over a 5 to 10 year period just by giving financial incentives to Prime customers,” Mahaney told CNBC. “That’s the synergy that they are now pulling from this deal.”

Overall, Mahaney said that the incentive strategy “makes a lot of sense” for the eCommerce retailer. He added that Whole Foods and Prime are “powerful complementary offerings.” In all, Mahaney has a price target of $1,900 on per share on Amazon, which closed Friday (June 22) at $1,715.

The news comes as Amazon is rolling out an expanded discount program at Whole Foods Market starting on Wednesday (June 27). The benefits, which include 10 percent off sale items and “deep discounts on select popular products” will be available at the company’s brick-and-mortar stores and through Prime Now delivery of Whole Foods groceries, Amazon had said in an announcement.

“Since launching Prime savings at Whole Foods Market, we’ve seen excitement and momentum from both Prime members and our supplier partners,” Whole Foods Market President and COO A.C. Gallo had said in an announcement. “Our weekly Prime member deals are a hit, and we’re excited that Prime members across the U.S. will now be able to take advantage of these savings in our stores.”

In order to use the discounts, Amazon said Prime members can utilize the Whole Foods Market app and scan a Prime Code at checkout. Alternatively, the eCommerce retailer said members can use their mobile phone number to access the discounts. In addition, members can access the savings through Prime Now delivery in cities such as Boston, Atlanta and Los Angeles.