What if a cold drink cost more on a hot day?
Customers in the UK will soon find out. Recent reports suggest that three of the country’s largest supermarket chains are rolling out surge pricing in select stores. This means that prices will rise and fall over the course of the day in response to demand. Buying lunch at lunchtime will be like ordering an Uber at rush hour.
This may sound pretty drastic, but far more radical changes are on the horizon. About a week before that report, Amazon announced its $13.7bn purchase of Whole Foods. A company that has spent its whole life killing physical retailers now owns more than 460 stores in three countries.
The acquisition – Amazon’s largest ever – struck some observers as strange. But Amazon tends to run about a decade ahead of its rivals. It owes its success to big, counterintuitive moves. This is a company that saw the power of online retail in 1994, and of cloud computing in 2006. Its purchase of Whole Foods represents a similarly far-sighted incursion into a lucrative new frontier.
Amazon isn’t abandoning online retail for brick-and-mortar. Rather, it’s planning to fuse the two. It’s going to digitize our daily lives in ways that make surge-pricing your groceries look primitive by comparison. It’s going to expand Silicon Valley’s surveillance-based business model into physical space, and make money from monitoring everything we do.