Editor’s note: Jake Sedlock is vice president of client development at research firm CivicScience, Seattle. This is an edited version of a post that originally appeared here under the title, “Pack up the old timers – we’re off to the new whole paycheck!”
My wife calls me cheap. I prefer “thrifty” or “careful.” I can’t be the only father in America who grimaces every time I see a Whole Foods bag on the kitchen counter. Perhaps the Whole Foods executive committee finally heard my silent screams of agony when they decided to green-light the lower-cost Whole Foods concept. But, the Whole Foods execs did announce that the stores would be hip, cool and high-tech. I just hope during the design phase they are thinking about me too.
Hark! The unmistakable marketer’s siren call to Millennials.
Whole Foods is in a pickle because the hip-but-costly chain can’t simply say it wants the new stores to appeal to “people likely to buy groceries in stores” because it doesn’t play to Wall Street or reinforce its brand positioning. While both are very relevant concerns, designing for the marketing industry’s darling, the Millennial segment, could be exclusionary – which is ironic because it appears Whole Foods has realized it needs to be more inclusive.
To be successful, the aisles of New junior Whole Foods lite Millennial edition (NJWFLME) can’t be solely populated by app-obsessed “youngsters” attracted to accoutrement such as reclaimed wood floors, the hushed buzz of carefully aimed LED track lighting and sleek, satin-black shopping carts.
NJWFLME must attract people like me – the Gen X/Boomer straddle generation (did I just coin a new segment?) – and give me reasons to pull my car (a car that I own outright and is not part of a smartphone app car sharing consortium) onto new, freshly paved parking lots.
Creating an entirely new brand and shopping experience may seem drastic but desperate times must be requiring desperate measures in the hallways of the Austin, Texas Whole Foods headquarters. Desperate times are clearly illustrated by data we have on Whole Foods that indicate a brand losing differentiation and strength. What’s surprising is how long it took to get to this point: the company must have seen it coming for years.
I know this because we have been tracking consumer attitudes toward Whole Foods since 2012. Take a look at the trend line for both Adults 35 – 64 (top chart) and Millennials (defined here as 18 – 34, bottom chart) over the past three-plus years:
I don’t have the specific insights Whole Foods used to commit to its new significant strategic shift but the two charts above are clear harbingers of the loss of Whole Foods brand power, which is accompanied by loss of pricing power and in the end, foot traffic. Clearly, both groups, Millennials and adults 35 – 64 (straddle generation!), are increasingly neutral about the brand and not nearly as favorable to the brand as they were when we started tracking them in 2012.
Clearly the company has a problem with both segments – so why launch the hip, cool and high-tech NJWFLME? Did Whole Foods look closely at who is cooking and therefore probably buying groceries?
Think about the segment I alluded to above – people likely to buy groceries in stores – when you review the next two charts. CivicScience asked the U.S. consumer how they usually prepare (or don’t prepare) dinner every night:
Adults 35-64 are much more likely to be cooking than Millennials, so without a doubt, that group is going to be buying more groceries:
Now, another interesting tidbit that could tantalize an upstart grocer is how many people each of these segments typically cooks for. We questioned the U.S. consumer about the number of people each tends to cook for when they cook dinner:
The data indicates Adults 34-65 would need heavy-duty bearings on their shopping carts for their extra grocery load, given they are more likely to cook for more than one.
So, should NJWFLME invest in micro-location-based shopping apps, screw some flat panel displays onto those sheik shopping carts and ensure the aisles are stocked with products tuned by the trendiest Millennial taste-makers? The company should be attuned to what is hip, cool and high tech across a broad demographic rather than the demographic group it is likely paying close attention to.
And anyway, it won’t be long before those Millennials are reaching for their bifocals and wondering why all these grocery stores are so darn dark inside …