Whole Foods Marketing Strategy

On Sunday, the Austin American-Statesman ran an article looking into how (and why) Whole Foods Market has grown to become a $4.5 billion dollar business WITHOUT relying on traditional advertising to do it. It’s a good read. Bonus points will be awarded to Brand Autopsy readers when you spot my name.

link: Whole Foods Shuns Ads | June 10, 2005 | Austin American-Statesman

Comments

[Chuck Nyren]

What....a bonus point for each time I spot your name? Do I get half-points for pronouns?

I lost count.

"They never set out to build a brand," he said. "They set out to build a business, one that stood for something."

An organically-grown brand. Sounds like the basis for a business book. I hope someone's writing it.

[johnmoore (from Brand Autopsy)]

Chuck ... perceptive are you? I'm certain that 'tribal knowledge' of building the business creates the brand will be shared in an upcoming business book. More to come ...

As for the bonus points you are collecting, save them. Once you collect 10,000 Brand Autopsy will send you a limited edition logo'd scalpel. Ohh ... Ahh...

[dan from austin]

I read this article with interest, but some issues in it raised my skeptic meter and I had to respond. This is a letter to the author of the article:

I know that this is a little late in coming, but I was rereading the Whole Foods article from a few weeks back and disagree with your argument made in the article. I think that Whole Foods advertsises and markets less than the traditional grocer to soem degree and uses unique ways to promote its brand, but I think you're wrong to state that they do little or no traditional advertising. Even here in Austin they were regularly advertising in the Chronicle in the past year. They do a lot of advertising in compeititve markets like Boston and Minneapolis and Seattle.

You cite a stat about how much money Safeway is spending on marketing of $100 million, and that's a lot of money. However, by my calculation it's just .28% of their annual revenue, less than the amount as a percentage that Whole Foods uses. In the world of business reporting, comparing apples to apples means comparing percentages, I think.

[johnmoore (from Brand Autopsy)]

Dan ... yes, WFM does do limited advertising. (Certainly not to the extent of a Randalls or HEB do here in Austin.) The $17M advertising budget Renuka mentions in her Austin-American Statesman article is wrong. That $17M is the company's total yearly marketing spend spread out over 11 regions plus anything the company may do from a national level. The majority of the $17M is spent on in-store signage, in-store programming, and PR outreach activities.

In some markets, notably Los Angeles, WFM will spend more on traditional advertising than in other markets. In Los Angeles, WFM has spent a good portion of its local marketing budget on a print partnership with the LA Times resulting in full-page print ads. However, one will never see a television commercial or a multi-dimensional media campaign advertising WFM. WFM doesn’t believe in advertising.

WFM would rather spend its marketing dollars to make the in-store shopping experience better and not to make the out-of-store advertising better.

As fyi ... the Austin Chronicle (weekly alt. paper) print ads you mentioned were purchased and placed by the WFM store at 6th & Lamar. This was done to hopefully drive traffic into the store during the massive road construction issues that was driving traffic away from the store. Store sales and foot traffic suffered during the Lamar road construction and the store felt a price-driven print ad in the Chronicle would help drive sales. Those ads are no longer running since WFM moved into the spacious new digs across the street.