Foursquare Co-Founder Dennis Crowley: Why Amazon's Deal for Whole Foods Is So Brilliant

Amazon can do a lot of amazing things with Whole Foods' locations, says Crowley.
By Natalie Walters ,

Count Foursquare co-founder and executive chairman Dennis Crowley among the big fans of Amazon's (AMZN) - Get Reportsurprise move to acquire Whole Foods (WFM) for $13.7 billion in mid-June. 

Crowley, who built the location intelligence company into a service with 50 million monthly active users across its two apps since founding the company in 2009, spoke with TheStreet at the company's hip headquarters in Soho, New York. 

"I can see what Amazon is trying to do there," Crowley said. "I think it's super brilliant." 

Crowley pointed out that there's no mainstream winner yet in the grocery delivery business and Amazon can use Whole Foods' "awesome retail locations" to go after that position. Amazon is expected to use Whole Foods' 466 locations in North America and the United Kingdom as part of its distribution network, allowing customers to order groceries to their home, or to order groceries online and pick them up in the store. 

Amazon can do other interesting things with Whole Foods, such as allowing customers to order non-food items such as a Nintendo (NTDOY) from Amazon's website and then pick it up at a local Whole Foods location, Crowley said. "Whole Foods gives them a big presence everywhere," he added. 

Whole Foods CEO John Mackey touched on the changes coming to Whole Foods during a town hall meeting with employees on June 16. He said that Whole Foods is behind in technology and would be relying on Amazon to inject it with some much-needed updates. "I think we can expect that we'll go to the front of the class, eventually, in the grocery business," he said. 

Mackey also noted that Whole Foods is going to become more customer-focused and more competitive under Amazon CEO Jeff Bezos' watchful eye. In five years, people will be amazed at what Whole Foods becomes, he claimed. Part of being more competitive is focusing on long-term results when it comes to investments, a strategy that Amazon is famous for even though it stresses some investors out.

"They have had the courage that almost no other public company has had the courage to, basically, resist the drumbeat of short-term, quarterly earnings that have had us trapped here for a couple of years, as our same-store sales came down," Mackey said of Amazon.

Foursquare's Crowley said he's now left wondering what commerce company or technology Amazon will buy next. Some analysts think Amazon might take Macy's (M) - Get Report out of its misery for about $10 billion in order to utilize its physical stores as part of its distribution network, similar to the way it's expected to use Whole Foods' stores. 

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