RSR Research: Who Says the Store is Dead?

Discussion
May 14, 2013
Paula Rosenblum

Through a special arrangement, what follows is a summary of an article from Retail Paradox, RSR Research’s weekly analysis on emerging issues facing retailers, presented here for discussion.

A recent visit to the new Whole Foods Market in North Miami assured me that the store is alive and well. You just have to make it … interesting.

Arriving three days after the May 1 opening, I was greeted in the parking lot by bands playing, special activities for kids, and policemen directing traffic. But inside the store, it was about the products. A moveable feast similar to Costco let me sample everything from key lime mustard marinade to Parmesan Reggiano. But I learned some valuable lessons during my first visit:

Lesson #1 – Branding is About More Than Brand Name: Upon entering, you walk smack dab into the fresh produce department. Signs read, "Organic: more than 91 products today" and "Local more than xx products today" (sorry, I don’t remember how many). In other words, the store found a way to hit both my hot buttons. I’ve definitely gotten religion around non-GMO food over the past year and buying local just makes good sense. The reason I’m calling out "Organic" and "Local" brands follows.

Lesson #2 – How Whole-Paycheck Became Half-a-Paycheck: As I mentioned, I’m fussy about particular foods, nuts and grains in particular because I’ve read so much about how the seed stock has been tainted. So I want my almond milk to be organic. As it turns out, Whole Foods had half-gallon jugs of its 365 brand almond milk emblazoned with the USDA certified organic label. Into the cart it went. And so it went with many of the products I bought. The net result: the final bill was about 1/3 less than I’d expected to pay. So I saved myself some money, got what I wanted and left very happy.

Lesson #3 – Store Employees Really Do Matter: For whatever reason, the average store or office employee in South Florida really isn’t very nice. But the Whole Foods employees were genuinely happy. Checkout lines were short, and when I realized I was working with a brand new employee at checkout who really didn’t know how to ring up "complicated things" like yams. She was so sweet that I just didn’t mind waiting. The person training her said, "Don’t worry, within a few months you’ll know them all by heart." She smiled broadly, and that just made me happy. How many of us can even expect our employees to be around for "a few months"? Maybe there is something to this conscious capitalism thing.

So while I’m hearing a lot of buzz around Amazon getting into grocery, and Walmart getting into the neighborhood market business, I’ve got a whole other thought process. Give me the assortment that I want, surprise and delight me with your service, don’t cause me undue pain, and I’ll happily go on a discovery adventure at a local food store.

What should other retailers glean from Whole Foods’ recent success? Which of the elements mentioned in the article — organic/local branding, increasingly competitive prices, good employees — appear to be particularly supporting Whole Foods’ renewed momentum?

Please practice The RetailWire Golden Rule when submitting your comments.

Join the Discussion!

18 Comments on "RSR Research: Who Says the Store is Dead?"


Sort by:   newest | oldest | most voted
Bob Phibbs
Guest
6 years 5 months ago

“Know your customer” is alive and well. Thanks for the report from the fields, Paula. Making shopping compelling is the key—even in the grocery aisle.

Anne Howe
Guest
6 years 5 months ago

Paula, I can hardly wait to see if I can replicate your experience at the downtown Detroit location when it opens. Certainly the suburban WF locations here are a distinctly educational and pleasant experience. Helpful people are the biggest differentiators, followed closely by informative and imaginative signs that clearly give shoppers the information they want to know.

I have a hard time imagining that Walmart and/or Kroger could be a fast follower on the two experience-enhancing elements, but I’d love to see them try. It’s the rising tide theory, combine with a little bit of healthy competition to get as close to the shopper as they can, that will keep grocery retail in the game.

Dick Seesel
Guest
6 years 5 months ago

If a brick-and-mortar store can pull together the elements of its strategy in a consistent way—meaning merchandise content, pricing, customer service, store layout, and so on—it has a chance to win, no matter what business it’s in. If the retailer can go the extra mile (like Whole Foods) to provide a level of engagement and interaction with the customer, it has an even better chance to turn a satisfied customer into a committed one.

Ian Percy
Guest
6 years 5 months ago
Living systems always seek out things that help them live, that nourish and energize them. True of caterpillars and true of customers. It is ALWAYS, ALWAYS, ALWAYS about the energy. There really is nothing else. When you can see it, hear it, feel it, touch it, taste it…it just feels right. You’re glad to be there. You are nourished. Trader Joe’s is another example where it just feels good to be there. World Market yet another. There’s about three local restaurants like that too. Heck even the local Great Clips has it. Sadly, too many retail places have no energy—not in the environment, not in the products and not in the people. That means they’ll suck the life out of you, too! From the moment I even think about going to a store my energy meter kicks into gear. A zillion minute connection points are between me and the cash register. Some are located within inches of the register and some several miles away. If the sum of the energy is sufficient to make me… Read more »
Adrian Weidmann
Guest
6 years 5 months ago

Empowered and conscious employees are your finest brand ambassadors! Combined with an environment that allows the shopper to be surprised and delighted and the ‘brick and mortar’ store will not only survive, but thrive within the online and Amazon/Walmart landscape.

Zel Bianco
Guest
6 years 5 months ago

I would say that theater is important and my experience at WF the other day is a case in point. I am certainly not the cook in my family, but a demo that showed how easy it is to take fresh branzino fish and saute it with some peppers, spices, etc. was fast and uncomplicated, drove me to purchase the fish and run around to pick up the other ingredients I needed to prepare it. Was it the taste I had? Yes. But it was also the person doing the demo and how enthusiastic he was about “there’s nothing better than fresh fish….” that compelled me to take action.

Al McClain
Guest
Al McClain
6 years 5 months ago

Nice report from the field, Paula. Whole Foods seems to be doing a lot of things right, by making it all about quality product and experience, combined with reasonable prices. Regarding the typical attitude, I think that is a matter of being in an urban area, where everyone is a little more harried. We are definitely seeing a housing and retail boom in South Florida. Trader Joe’s just announced they are moving into my town, near Publix Greenwise and Whole Foods. Maybe we’ll see a price/service war?

Robert DiPietro
Guest
6 years 5 months ago

It’s the store experience that makes it relevant to the consumer. They hit the hot button of organic, delivered it at a good value, and the employees are happy. It’s not rocket science—give the customers what they want at a fair price with competent associates.

Camille P. Schuster, PhD.
Guest
6 years 5 months ago

Give the customers what they want (different things in different neighborhoods) and train employees to be helpful and happy. The formula is not difficult. The execution is.

Cathy Hotka
Guest
6 years 5 months ago

There’s no substitute for the store experience. Whole Foods excels at presenting customers with appealing products, and those fresh flowers and tasting stations at the entrance to the store set the stage. But here’s a shout out to their store associates, who share product knowledge and dish out advice. Nice job!

Warren Thayer
Guest
6 years 5 months ago

They pay better than average, and all the other things they are doing, they are doing well, as always. Under it all, I think I’d add “trust” to the list of attributes we were all voting on. Many shoppers go to Whole Foods because they trust the nutrition, wholesomeness and safety of what they are buying. They know Whole Foods has high standards, so food is “pre-screened” for them without having to study it or worry about it.

Kai Clarke
Guest
6 years 5 months ago

Happy customers contribute to a great store environment. In the end, this translates into better sales and profits. This has proven to be the core of great retailing and the the best retailers keep showing—and learning from—this every day.

John Karolefski
Guest
6 years 5 months ago

So let’s recap: Creative assortments (organics, non-GMO and local products), plus superior customer service, plus competitive prices, plus engaging sampling equals an outstanding shopper experience and probably store loyalty. What a formula! Who would have thunk it?

Grocers in competitive markets should take notes.

Craig Sundstrom
Guest
6 years 5 months ago

Not to be a wet-blanket here, but I’m firmly with John on this. WF sells higher priced products to affluent consumers…this is news? Sure they do a good job of it, but there was a hint of the reality of the situation when Paula remarked not that she paid little, that she paid less than she had expected. A comparison to WM—or practically any other general grocer—seems off…almond milk isn’t a big deal if you’re trying to feed six mouths on $123.68/week.

Shilpa Rao
Guest
6 years 5 months ago

I think Whole Foods is orchestrating their localization strategy very well, customizing to the local needs. Curating assortments displayed impeccably attract the target customers; it makes you feel like buying. Most customers at whole foods do not necessarily come in looking for deals. Competitively priced items just make the deal sweeter.

Ryan Mathews
Guest
6 years 5 months ago

All of these support the Whole Foods brand.

What can others retailers learn?

Don’t be afraid to price more aggressively, know yourself, and stick to your brand.

M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
6 years 5 months ago

Gush, gush. I must demur. This reported experience suggests or implies that Whole Foods has discovered or invented wonderful new ways to please customers. Really? Every element of Whole Foods’s (apparently wonderful) grand opening and continuing operations has been done by other fine supermarkets for decades. Clearly the ongoing, disciplined execution of excellent customer service by WF is exemplary, but they are hardly pioneers.

Rather that ask “What should other retailers glean from Whole Foods’s recent success?,” perhaps it would be more interesting to review all that WF has learned and copied from successful and more senior supermarket retailers.

Mark Burr
Guest
6 years 5 months ago

Recent success? Renewed momentum? Hmmm….

I must have missed something along the way.

Plain and simple, Whole Foods executes well. As to the rest, “It’s All Been Done,” by the Barenaked Ladies is playing in my head.

Nothing new. Good execution, yes. The rest—its all been done.

wpDiscuz

Take Our Instant Poll

Of the three factors supporting Whole Foods’ success mentioned in the article, which one do you think is most responsible for supporting Whole Foods’ renewed momentum?

View Results

Loading ... Loading ...