Whole Foods Sans the Food
By George Anderson
Whole Foods’ new lifestyle concept store will have lots of natural and organic products. None of them, however, will be food.
The natural foods store chain announced it is opening its first “lifestyle” concept store on Santa Monica Boulevard in West Hollywood in late October. The store will sell clothing,
housewares and hemp curtains, all with an earth-friendly bent.
Neil Currie, retail analyst with investment bank UBS, told Reuters, “The opening of this store is interesting. It is showing that Whole Foods is thinking of ways it can build
strong brand equity. It’s a sensible approach and a low-risk way of the company testing out a new concept to move into new product categories.”
Among the products to be offered in the concept store are organic blue jeans, recycled handbags and paint that is free from potentially harmful compounds.”
The store will also feature the Edun Clothing line by U2 lead singer Bono, and organic and sweatshop free t-shirts from American Apparel.
Moderator’s Comment: What is your reaction to Whole Foods new concept? Do you see the chain building larger stores that combine the new concept with
its new larger food stores – an organic supercenter, so to speak? –
George Anderson – Moderator
Without bold moves, retail would remain stagnant and consumers would find alternative ways to spend their money. Leveraging existing brand and a loyal customer base, this lifestyle store pursues perceived needs that are not being met by current retail formats and assortments. That is what retailing is all about: brilliant innovations based on solid research and in touch with changing demographics and macro trends. Those that capture our imagination will gain more of our pocket book and redefine their industry – retail or otherwise. Kudos to Whole Foods, they’ve been at it for decades but the fruits of their labor are setting the standards early in the 21st century.
I agree with Neil Currie. I think this is a reasonable and savvy brand extension. Whole Foods has a (in my opinion, well-deserved) great reputation with consumers. Why not expand on that in a logical and coherent way? Watching the sales of hybrid cars, the success of Whole Foods and Wild Oats and the number of “crunchy” catalogues infiltrating my mailbox, I think they’re on to a long-term trend. With gas prices soaring, their timing couldn’t be better to appeal to people eager to identify a better way to live. My only question is when will they come to my neighborhood?
Whole Foods is a terrific operator and has filled a consumer need with its current format and products. It’s laudable that Whole Foods is now trying out a new concept, starting small, testing a new format for what is perceived to be their customer base. Why not? It’s retailers like Whole Foods who will counteract mall boredom and homogeneity. Whether this concept works as is, or needs to be modified, I suspect Whole Foods will develop a successful new retail concept and run with it.
This could be a diversion that WF doesn’t need right now. The best businesses in a fast-growth mode keep their focus. Everyone at WF would be better off if they spent 100% of their time rolling out the food stores. When the food store rollout reaches maturity, it might be time to think about other concepts. Rolling out a new national chain is enough work for 1 organization. How many retailers have successfully run multiple concepts in different merchandise areas successfully? Even running closely-related concepts can be difficult. When The Limited ran multiple concepts (Victoria’s Secret, The Limited, Limited Express, etc.), one or more was usually troubled. The Gap tries to run Old Navy, Banana Republic, and The Gap, and at least 1 division is usually in trouble. When Penney tried to run Eckerd, they both underperformed.
Whole Foods has always targeted a well-educated market and this is in keeping with their very strong brand. The company continues to attract passionate believers who are more than customers and employees; they are missionaries. It is the enthusiasm for a cause shared by customers and employees alike that enable the company to build brand loyalty beyond anything seen in any other retail groups save perhaps Costco. This is another step in supporting their customer, who they obviously know very well.
Whole Foods has the boldest product offering, and the strongest brand equity in a growing market. They have built a sense of trust as an authentic provider of natural products. Why not extend that trust into a broader array of non-foods products? I’m sure at some point they will combine these formats into a natural store supercenter. And it will likely win, as more consumers seek to attach themselves to brands that address broader life philosophies and association with a cause!
The idea is interesting and worth the experiment but I don’t understand why they wouldn’t do it in conjunction with food? Other channels like IKEA are trying to provide a wider assortment of products and services to help consumers with the “hurried lifepace” and time crunches that are impacting all of us. Natural and Organic is a big, growing and important consumer fragment and but it just seems to make more sense from a trends, operations and risk viewpoint to do the test in conjunction with food.
I admire Whole Foods’ creativity in seeking out new businesses. They are doing exactly what they should for their customers.
West Hollywood is probably a good location, given the “West Coast mentality” for things organic and natural. Putting it in stores like New York City is another matter. I’m sure Whole Foods would have been happier to keep their wine store rather than trying to sell what is sure to be expensive organic and natural clothing. But that’s what New York City Blue Laws and pesky bureaucrats do best — mess things up.
Whole Foods doesn’t try anything without thorough consumer research, and amongst its shopper base; not the fashionable who don’t shop Whole Foods.
Logically, food and non food can be a winning combo, given that the right non foods are offered. Traffic and loyalty shoppers are in place, so why not extend the organic and good for you image
umbrella? Congrats to Whole Foods.
In response to Michael Richmond’s response, I think it’s the right move completely. What does this consumer hate more than Bush? Big malls and big-box stores.
In some circles, Whole Foods is referred to as Whole Paycheck. Will the new Lifestyle format come to be known as Life Savings, as in, whatever you had saved is now gone?
Duuude! You mean Jerry Garcia is dead? Duuude!
This is so lame. I mean, like, do I want Whole Underwear?
Think about Whole Foods’ customer base, the 30-40-somethings interested in nesting and taking care of burgeoning families. Now think about fashion, which is dominated by hip-hoppers and those anorexic girls and feminine boys modeling overpriced clothing in glossy mags. Does this compute for you? I thought not.
What, no tie-dyed disposable diapers?
This company has a broad and extensive future. I see this as simply one step of many that will be made by this retailer to expand the offering to the consumer. They have hit a market and understand their market. They, much like Target, have been spending their time on their market, not someone else’s. Thus, success is much more likely.
Their business model also lends itself to those working within their organization to be full partners in achieving their objectives.
Two things, in direct contradiction, appear to be true about this move. First, it makes incredible sense given brand equity, market positioning, and existing competition. Second, it is a completely different business from the one they currently operate, and, as such, wouldn’t have the same core competencies.
I applaud the concept. I am terrified about the ability to execute. Having done work with a retailer in Europe with almost equal parts apparel and food, the requirements to excel in each business are almost categorically opposed. Now, there is a degree of “fashion” in the food offerings already carried by Whole Foods. But it’s a very different use of the word.
I’d have been much more bullish on the idea if they’d licensed the name, or formed a joint venture with someone who knows who to buy, merchandise, and operate apparel and home stores.
As much as I admire the Whole Foods concept, there will come a time when all the choice upscale locations are gone. After that, whole foods must add something different because they would never survive in a small town or lower middle class area, which happens to be most of the U.S.A. $4.99lb. Organic butter does not fly in the real world, and it makes sense to keep extracting as much as they can from the “haves” of the world.
So, more power to you, and take care of the wealthy, because the rest of us will have to survive on regular stores.