Obviously, it’s a big deal…but not as big as the market is making it.
Amazon, even with Whole Foods, has some work to do.
Are they formidable? Yes they are. But we can adapt. Remember when Costco entered the market and everyone tripped over themselves adding club sizes? Or when Walmart exploded its number of stores and everyone went into a price panic? Those who invested survived. Those who didn’t, did not. And now, typically everyone will have options that speak to both bigger sizes and higher value as part of the offering.
The point is this: Their category killing, breakthrough innovation, soon became normalized.
Fragmentation continues, of course, but a willingness to shop around, especially for millennials, means that a store with a differentiated offering and compelling stories to tell can still be predatory and win new business. On the flip side, Amazon has penetrated an extremely influential innate quality, impulse. With the trust of the Whole Foods name, the weekly shopper’s desire for efficiency will be met with credibility. And just at the click of a button. Amazon’s scope and scale will keep the consumer’s wallet happy and entice the online browser with price matching and promotions. Will the shopper’s impulsive streak be the reason Amazon is handed complete control for good?
Keep in mind the origins of organic. Shoppers don’t want rushed, wasteful cardboard sitting on their porches each week. Already California has rid of plastic bags in grocery stores in an environmentally friendly effort. Amazon may have the Whole Foods name, but consumers staring at their computer screens will notice the difference.
Being stridently organic wouldn’t be a path for Save Mart right now. But there are other ways. Like wellness.
We did some work for a small box natural and organic store call Mrs. Greens a few years ago. They were feeling competitive pressure from WFMI in the NYC suburbs where they operated. Clearly, they couldn’t beat Whole Foods by most measures. In fact, by any measure. However, there was a strategic opening. There had been rumblings that some of WFMI’s products at that point, were actually NOT that natural. (They’ve changed that since then, by upgrading their buying requirements). Mrs. Green’s needed to be more stridently organic than Whole Foods. More Green if you will. And they started to do that. They put money into the physical plant to improve the experience; they only sold organic produce–if it wasn’t organic, it wasn’t on the shelf. They outlawed all products that were non-conforming. And this was a company that had been weighing the idea of adding Tide to the shelves only a month or two earlier! We developed “Standards of Goodness” that were displayed in every store to talk about the level of commitment they had to the ardent organic customer. They found that those customers would give up some of the selection and price advantage of the big WFMI stores to have the assurance of a truly clean shopping experience.
Though there is a dreamlike quality in the idea of never needing to leave your home for a carton of eggs, there’s something even more special about an in-person selection, a farm-to-table atmosphere, and a personal interaction that Amazon could never duplicate.