ted, i suppose that this process is part of a wider economic process. the world is splitting in two: those who can and those who can't. the first group is expected to take advantage of these amenities and this step should generate a good pr for whole foods. the second group, i'm afraid, is still slave to wal-mart.

I think it's a great idea. You have to understand Whole Foods doesn't sell just "whole food," it sells a way of life, a philosophy if you will. This way of life is attractive to those with a holistic approach to life. Mind. Body. Spirit. Sure it's going to be more expensive, but those who are on strict budgets already refrain. It's another example of marketing to target the class with recreational income. I enjoy modern advancements as a society and am pleased with the natural approach to eating. After all there's an obesity epidemic and this is an inspiring way to eat healthy. When you're paying $5.00/lb of organic tomatoes, you're more inclined to eat them rather than waste them. When you loose weight because you eat those expensive tomatoes, you keep going back for more!! Yes, success and well deserved! I heart whole foods!

I have the impression that you haven't actually spent time in the new Whole Foods store. Having frequented the newly opened Whole Foods stores in West Palm Beach and in their flagship location in Austin, Texas--probably the model for the Dallas Store--I'd call them a uinqie and enticing experience for food and health enthusiasts, rather than a marketing ploy. For a certain audience, this is food and health mecca, with the highest standards for fresh and packaged food in a boutique-like layout and atmosphere. Truly, when I mention Whole Foods to like-minded shoppers, (clearly, we ARE their target audience), I hear “ahhhhh...wish we had one here in Vermont."

Ted - I think the answer to your question ("Is this whole new kind of supermarket experience over the top, or does it signal the next logical step in the development of the supermarket as theater?") is both. The trick for WF will be holding on to the core values it built its brand around: healthy/healthier foods,making customers feel good about consuming food that was organically grown or more animal-caring, and tremendously attentive customer service. Historically (at least with the Bread and Circus brand before it was acquired by WF),this attracted a crunchy granola set that might be turned off by the over the top "foodie", materialist approach the new store suggests. But they've already been drifting from the core for a while by adding more regular supermarket products...

Ted,
There are different kinds of natural/organic foods customers and they shop in various venues, as a result. Having spent many years as a marketer in this industry, I can attest to that. Whole Foods markets itself to appeal to more mainstream food shoppers who are health conscious as well as natural foodies.

WF seems to be experimenting with its stores by offering additional amenities in more affluent urban markets, as well. And as Sandra said, taking a holistic approach by offering food for the mind, soul and body appeals strongly to this customer base. If this is successful, and I think it will be, I'm sure WF will expand this format to additional markets. The chain has also been tinkering with opening general merchandise stores that fit the natural lifestyle image. Go Whole Foods!

Is it possible to go "over the top" if you understand your customers and provide them great experiences based on their wants, needs and desires? I don't think so, making the bottom-line question: Does Whole Food understand its customers? I suspect they do.

Thanks Gianandrea, Sandra, Susan and Maureen for your insightful and informative comments. I have shopped in a number of Whole Foods stores but have yet to experience one like this in the Dallas area. I'm curious to see whether the Austin-based food retailer will expand this concept outside Texas quickly, or wait and gauge its ROI on this new format first.

What's interesting to note about the Whole Foods Market (WFM) shopper is that INCOME is not the deciding factor. It's EDUCATION. The more educated a person is the more likely they are to be a WFM customer. The over-educated and under-employeed customer "trades up" to shop at WFM because they value WFM's values. The well-educated and well-paid customer chooses to shop at WFM because they feel they are "worth it."

To Sandra's point, WFM serves as a lifestyle editor for many customers. WFM has learned, as have other lifestyle brands, that customers will pay more when they feel as though a company has a bonafide expertise.

Maureen's comment about the core WFM shopper being the granola/hippie type isn't accurate. The largest customer base at WFM is the "foodie/gourmet" shopper. 33% of WFM's customers are foodies and they represent the largest and most profitable customer base. To Maureen's point though, WFM does risk losing its old school granola/hippie customer base by building bigger, more opulent stores. However, these customers represent only a sliver in the overall WFM customer pie.

(Note -- my comments are based upon being a former Whole Foods Market National Marketing Director.)

I think John Moore brings out an interesting point. Education is more important than income among natural and organic food customers. That is true. Having said that however, WF has lost customers who have more modest means, or are more price-conscious to operations like Trader Joe's. And that is a fact.

great post Ted, and a very enlightening comment from John Moore...

As anecdotal evidence of the "foodie" slant, I went to both a Stop&Shop and a WholeFoods on New Year's eve day. While the supermarket was busy, the WholeFood was JAM-PACKED. Typically, the traffic is similar in both. The "special occasion/gourmet" message of WF is definitely reaching its audience.

Thanks to everyone for making great comments. And thank you, John, for sharing insights only an insider would have.

To your point, Jaynie, WF is a cultural phenomenon and its new store openings create a lot of buzz and traffic tie-ups. It's nice to see that WF continues to do the things it does within its communities to continue to generate excitement. The chain continues to give more shoppers reasons to come into its stores; that's obvious.

Ted ... the experiential attributes you listed in your initial post are a part of many WFM locations outside of Texas. Most any WFM location built since 2002 has some of those food theater elements. Going forward, every store WFM builds will incorporate such theatrics. WFM is focused on building stores with large footprints (45K+ sq ft) in order to offer customers more interesting shopping experiences. The company has gone on record saying that larger stores with more theater are more profitable.

And to Claire's point ... Trader Joe's (TJs) is well positioned against WFM. TJs only needs 10-12K sq ft boxes to build out stores and they fill those stores with 85%+ Trader Joe's-branded products which all adhere to similar "quality standards" to WFM. Major difference is the price. TJ shoppers are savvy and love getting the magic deal. For those who aren’t familiar with Trader Joe's ... think Whole Foods with a Dollar General price-mentality and tiki-kitsch decor.

WF opens up a new store in North Dallas? This is news to me... To my knowledge, they are building a "Flagship Store" right across the street where I work, but they weren't at all close to finishing last time I was in there (right before the new year). If you know where in North Dallas it is, I'd love to go check it out.

To your question, I don't know if it's as much a logical "next step" as it is a logical "quantum leap." You've got to admire the audaciousness of it all. I hope their market is large enough to sustain it, as I love a good customer service story. I have my doubts, but let's see how it plays out.

Cam ... the new North Dallas WFM is actually a relocation of the Preston/Forest store. It moved across the street to the southeast corner where CVS, Pei Wei, Staples, Corner Bakery, and lots of parking are located. But I wouldn't call this a "flagship" store ... just a bigger store. Wanna see some video of the store? Go here:
http://brandautopsy.typepad.com/brandautopsy/2007/01/shopping_at_cen.html

Got the reverse of heaven in my holiday shopping at Whole Foods!

I had to return a cookbook on December 22 and had to get special 'dispensation' from a manager. They gave some nutso line that "Whole Foods can't take back books as returns because of copyright issues."

Huh? They actually don't allow returns on books because someone could copy the copyrighted material then return the book. Later on that explanation - I've heard of some doozies on why a company wouldn't accept returns - but this one took the cake (pun intended).

Didn't leave me feeling very 'whole' about my Whole Foods Experience.

in Manhattan, Fresh Direct www.freshdirect.com and Traer Joe are beating the pants off Whole Foods.

At Trader Joe they post a list of the cost of the same shopping list at Whole Foods and at Trader Joe. You save a bundle at trader joe for the SAME organic items.

I think the more educated the consumer is the more they know that it's the food and not the show that counts, and you can get the same food at better prices in Whole Foods' competitors.

That said,the stores are beautiful and if you don't care what you spend, fun to shop at.

I did the PR for Stew Leonard's in Connecticut during their early years, and they proved conclusively that you can have the show and the quality and the low prices all at the same time. Unfortunately, they are not price competitive any mor.

As for Fresh Direct, that magnificent company that changed my life and has kept me out of supermarkets for years, they have the whole thing right -- the best prices, the best service, and no theatrics whatsoever.

This just goes to show you that a negative experience like Jeanne's is just as enduring in the consumer's mind as a positive one. Repeated positive experiences continue to build brands; one negative one can ruin a brand image. Even worse: the consumer who has a bad experience with any brand communicates this to a large number of people, as Jeanne has done, and that serves to undermine everything Whole Foods is trying to accomplish. Proof again that poor customer service can derail the strongest brands.

I know of no brand that is able to deliver exceptional customer service in EVERY instance. It’s impossible for any brand to be perfect. Instances like Jeanne getting the run-around when returning a book is going to happen at the strongest and weakest of brands. Again, it’s impossible for any brand to be perfect 100% of the time.

What I’ve found to be true is strong brands always have more credits than debits in their “brand checkbook.” Just as your personal checkbook has credits and debits, a brand checkbook has credits and debits in the form of brand credits and brand debits. "Brand credits" are business activities that enhance the reputation and perception people have of a brand, and "brand debits" are those that detract from the reputation and perception of the brand.

Hmm … this sounds like a MarketingProfs article:
http://www.marketingprofs.com/6/mooreJohn3.asp

Insightful points from everyone. I agree with John that a bad experience could happen with even the best retailer. It's how that retailer reacts to it and how they consistantly perform that makes the difference.

And, yes, Ted, it could be theater, but it's Cirque-style theater - ie: The consistantly exceptional experience.

It's also clear that Whole Foods CEO John Mackey intuitively understands the branding process, whereas, other companies have to work at it. Yet, they can learn from watching how WF and other companies with high brand equity make it work:
1. Charismatic leader who embodies the brand
2. Consistent message across all channels
3. Enthusiastic and motivated employees who speak the language of the brand
4. Customer driven, consistantly exceptional experience

As published last week, WF was ranked in the top five for this year's Fortune Mag's "Best Companies to Work For?" It's no accident that the brand has become successful because of it.

As John pointed out, their target audience is educated, environmentally and socially aware and willing to pay extra to be in an environment that genuinely embraces it. They'll pay more for that experience because it defines who they are as an individual. And, more often than not, the experience is worth it.

Thanks, John and David for adding intelligent, insightful comments on this issue. Operations like Whole Foods and Wegman's have consistently rated highly as "best companies" with both employees and customers. And that's no accident. They have worked hard consistently at their marketing and customer service to get there.

However, that educated customer who is willing to pay premium prices fully expects to get premium products and services on a consistent basis. While bad experiences are probably few and far between, those customers who do have them are likely to tell their equally educated friends and influence them to take their business elsewhere.

It isn't as though Whole Foods doesn't have many competitors. Even dominant brands can lose their luster with loss of focus on the customer. Over time. This is why it's crucial for every retailer to focus its employees on customer service every day. Nothing builds and sustains a brand like that over the long haul.

I just read the latest issue of FMI's Daily Lead. An article from today's Houston Chronicle about Whole Foods. "A Natural in Groceries Finds the Going Tougher" is a must-read for Daily Fix subscribers who are interested in following Whole Foods. http://www.chron.com/disp/story.mpl/front/4468311.html

Basically, the articles cites how increased competition and high prices (apparently many have dubbed Whole Foods "Whole Paycheck") have taken some of the bloom off the WF rose for investors. Same store sales growth has slowed even as the retailer has another 80 stores in development.

An interesting and provocative read. Knowing WF, though, I wouldn't bet against them. I think they are more than aware of their current challenges and will rise to them.

I am a WF "bottom feeder." Not one for the fancy shmancy tofu chips and the almond milk, I purchase bulk grains and a few products that I think are a good value.
I personally don't need a "show" when I go shopping.
Seems they ripped a page from
Jordan's Furniture in Massachusetts... its not the furniture, its the experience.
Geez, get a life!

Whole Foods -- bring it on!!! Personal services is definitely the way to go. As for the candy making -- appealing for the younger audience, why watch another show on the food channel when you can see it up close and in person.

Thanks Jon and Leslie for your observations. You both present an interesting look at the dichotomy of shoppers WF attracts. Perfectly.

It's really interesting to see how many shoppers purchase at least a few items--if not an entire grocery order--at WF quite frequently.

These concierge services altogether will surely let the customer feel the sense of well being and that's very important when it comes to buisness.

MCgill,

Couldn't agree with you more. In highly competitive businesses like supermarkets or hospitality, catering a little bit more to the customer sets those companies who engage in the practice, apart from their competitors. Thanks for weighing in.

Forget competitors for a moment. What happens when a customer buys something from, say for instance, company X, and he is not satisfied by it? Strong likelihood is that he wouldn't come back! You may argue, so what? I've only lost a customer right? not realizing that the same customer will go on to tell another 10 and those 10 will tell another 10 not to buy things from you. Hence multiplying that dissatisfied customers.

So for businesses who don't care about customers' satisfaction, there is always a chance of being thrown out of the marketplace. Having saving that, it's equally imporant to have a close eye to "your competitors is doing." But remember also, "customer buys expectations not product."

Thanks anyway

McGill,
You are absolutely right. Thanks for this observation.

Companies need to realize that losing one customer is a big deal. Disgruntled customers tell everyone they know about their bad experiences with companies, and the effect can have very negative consequences for even large businesses.

Interestingly, there's a lot of talk in the business community about needing to focus more on customer retention. So many businesses are intent on generating new customers, they sometimes forget to treat the ones they have with respect, exceptional service and a "thank you" for your business.

With the kind of competition most businesses are facing today, the customer has to be front and center in all that companies do. If businesses take great care of their customers, they will remain strong and dominant in the face of ever-increasing competition.