Amazon’s paradigm shifted. Did you feel it?

When isn’t the retail industry talking about Amazon?

The online behemoth is frequently at the hub of conversations about long-term viability in the retail space, such that big boxes are arguably no longer the primary threat to independent retailers. Furthermore, its actions in one industry can send shock waves rippling through the fabric of time and space — shock waves that can permanently alter the consensus reality in a (mostly) unrelated industry.

Naturally, then, Amazon’s recent acquisition of Whole Foods is a thing we have to talk about now. The all-cash transaction, valued at $13.7 billion, is Amazon’s largest purchase to date. It’s also, in a larger sense, an indication of where Amazon intends to head as it expands its physical retail footprint with the same competitive pricing structures and stocking capabilities customers have grown accustomed to.

If this was even 10 or 15 years ago, the idea of a grocery store acquisition would be miles away from the lumber industry. But this is Amazon in 2017, and few people are arguing that it’s not worth paying attention to.

In a June HBSDealer poll, 54% of respondents ranked their interest level in the acquisition as “very high.” Another 27% confessed a “medium” level of curiosity, given that they “don’t compete with Amazon (yet).”

We spoke to a few industry insiders to get their take on what this acquisition could mean for hardware and lumber retailers. Spoiler alert: It definitely means something.

As Levi Smith, VP of operations at Franklin Building Supply, puts it: “They are the digital supply chain juggernaut of our age.”

Specifically, it’s Amazon’s willingness to make a much smaller margin and go a much longer period of time making no profit that makes other retailers so concerned.

“Everybody in the retail industry is worried about Amazon,” said Winston Ledet, partner at Premium Retail Solutions Inc. “You worry that they’re willing to play the long game and suffer through a lot of losses to get to the ultimate place they’re trying to get to.”

Eric Lane, VP of strategic and specialty accounts for True Value, noted there may be no indication that Amazon intends to, say, purchase Home Depot — yet. But given the rapid pace of change over the past five to seven years, it may no longer be possible to dismiss anything Amazon is doing. Also, Lane added, Amazon Prime benefits from the Whole Foods deal.

“Anything Amazon can do to create more need and more transactions [will ultimately serve to] maximize the value of the Prime membership,” he said.

And beyond that, who says Whole Foods isn’t one giant retail experiment for Amazon?

“Amazon’s definitely been a leader in register-less checkout,” Ledet added. “They’ve messed around with it in some small stores they run, and they now have a decent-sized national retailer where they can go try some of these things. And they have a history of making things work that seemed impossible at first mention.”

To understand Amazon’s endgame, look beyond the products being moved and consider the method of their movement.

Amazon’s power lies somewhat in the fact of its gargantuan inventory. But for the most part, its power lies in its ability to move products quickly, cheaply and conveniently.

“I think the acquisition is about more than just Whole Foods or supermarkets,” Lane said. “It’s really about distribution and getting closer to the customer. If you think about it, the one gap that Amazon has is a full omnichannel play. And this now gives them that full omnichannel, so you can order and pick up in-store locally.”

The interesting thing to think about is that even though lumberyards are hardly considered the bleeding edge of innovation, BOPIS (buy online, pickup in store) is already considered rather commonplace for the industry.

“What’s ironic about our industry is that we’ve been delivering stuff for a long time,” Smith said. “A lot of other industries are catching up. But [Amazon] is changing how quickly things get delivered, and how much tracking information there is, and the level of precision in that information.”

Home Depot has certainly been a major innovator in BOPIS, but Ledet thinks that the trajectory of innovation will only continue to shore up more options for consumers as a result of Amazon’s actions. Perhaps in the near future, customers will be able to order online and pick up from a drive-thru window without ever entering a store.

On the other hand, Nathaniel Garber Schoen, owner of Garber Hardware, feels that building materials might be one area that’s a little more insulated from Amazon’s distribution hijinks.

“I don’t care how inexpensive Prime is — you’re not getting 40-pound bags of concrete sent to you with two-day shipping for free,” he said.

Regardless of what one thinks of Amazon’s world takeover, it’s hard to deny that the retailer has effected a sea change in how customers approach the shopping experience.

“Our industry does not have a good track record for keeping pace with change, and we don’t have any control over the fact that customer expectations are changing really fast,” Smith said. “Companies like Amazon are saying, ‘This is how a purchase experience should be.’”

Whether it’s how a website is organized, how mobile apps should work, payment processing, or how quickly products should be delivered, Amazon has already changed what customers expect in a very short amount of time.

And for that matter, Smith said, the grocery industry is actually fairly similar to LBM in the sense that they’re both slow to adapt to technology. All in all, these are two industries that assume purchasing will look the same tomorrow as it did yesterday.

“Even if it’s a pro builder building single-family homes, customers’ experiences as consumers are more Amazon-like, so they bring those experiences and expectations into the lumberyard and wonder, ‘Why does this take so long?’”

Arguably, the most critical aspect of Amazon’s influence is delivery, and the immediacy of that delivery.

“If people are going to expect it at a grocery store, they’re going to expect it everywhere,” Smith said.

If there’s one person who really isn’t worried that much about Amazon affecting his business, it’s Schoen. Garber Hardware is a Manhattan-based store that has big-city, not big-box, concerns — in other words, problems that are specific to a store with a small retail footprint.

“If I was in big-box retail, I would be worried,” he said. “That business model has been proven to not be viable in the long-term. The things big-box stores make money on aren’t very high-margin.”

In his view, Garber Hardware doesn’t compete with big boxes or Amazon. This is thanks to pricing on some level, as well as being a customer service-based business. What’s more, big-box businesses are volume-based, which means they lose their profit as soon as they lose their volume advantage.

Schoen doesn’t think Amazon is eager to buy a big home improvement brand. “If they’re going to follow this model, they’re going to first go after Macy’s,” he said. “Apparel is the next area that Amazon does a lot of business in, so it would make sense.”

Ledet also offers this perspective: The Whole Foods purchase might actually be a positive for home improvement, because it says, at least for now, Amazon is going to be focused on grocery for the next several years.

“They have to make that investment pay off,” he said. “The thought that they would now go do something huge in home improvement seems less likely.”

However, Ledet thinks it’s likely that Amazon will be looking at the appliance business, given everything Sears, J.C. Penney, Lowe’s and Home Depot have been doing. Additionally, Ledet thinks it’s possible Amazon might be paying attention to the MRO (maintenance, repair and operations) industry, particularly in multi-family — an area that Home Depot and Lowe’s have both been courting aggressively.

What’s more, Amazon could very well begin stocking Whole Foods with convenience items that are normally found in the hardware retailing space, Lane said.

But as a whole? Perhaps the independent retailer is not ready to be replaced yet.

“I don’t think hardware stores have to worry […] home centers have to worry. If you’re under your sink fixing your sink and you need a wrench, you can’t go on Amazon. I mean, not yet. Maybe when the drones come,” Schoen said.