Mimicking Whole Foods Market

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NOTE: updated to reflect the proper Giant Eagle name & logo

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USA Today reports how some grocers are doing their best to mimic Whole Foods Market (WFM). Publix is opening Publix GreenWise Markets, Giant Eagle is wooing foodies by opening Market District stores, Safeway is test marketing a lifestyle store in Boulder, CO, and Wal-Mart has just opened a snazzy new store in Plano, TX which highlights hundreds of natural/organic products.

For me this is like déjà vu all over again since I’ve not only done the marketing thing at Whole Foods but also at Starbucks. While at Starbucks, I saw many ambitious coffee competitors like Caribou, Cosi, Tully’s, Gloria Jean’s, CC’s, and others all trying to mimic Starbucks success in some way. And they all have fallen short in some way.

I’m certain this same fate of falling short will be the outcome of the grocers listed above trying to mimic WFM’s success.

Why am I so certain? It’s simple … competitors can replicate products and programs but they can’t replicate people.

Publix, Giant Eagle, Safeway, and Wal-Mart are all trying to replicate the products and experiences Whole Foods delivers, but they can’t replicate the people Whole Foods has delivering the products and experiences to customers. Products and programs do not create brands, people create brands. It’s the people that matter more in creating a brand than do products or programs.

WFM understands the power of a knowledgeable, caring, and passionate workforce in creating highly satisfied customers. They’ve created a company culture which connects with their team members (employees) and they in turn, pass that connection onto WFM shoppers.

If one were to take the WFM team member out from its business, Whole Foods Market would not be the successful company it is today. Try saying the same thing for Wal-Mart. You can’t. Right?

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For more Brand Autopsy marketing musings on Whole Foods Market, go here, here, here, and here.

Comments

[GrahamHill]

John

This is not limited to Starbucks and Whole Foods.

One of the most celebrated cases is attempts by the incumbent US & European airlines to replicate Southwest Airlines. Many have been able to replicate the point-to-point network, the short turnaround time, the larger number of flights per day and the no-frills boarding procedure. But none of the incumbents have been able to replicate the high performance organisation that Southwest developed from its earliest days. Ultimately, all the incumbents failed to unseat Southwest.

This is much more than the superficial "staff being nice to customers" that too much commentary focuses upon; it is about the nuts and bolts of how high performance organisations work. Prof Jody Hoffer Gittell at Brandeis University has written extensively about these issues if you want to find out more.

Graham Hill

[Mike]

Wal-Mart and the rest are not really trying to achieve the success of Whole Foods Market. They are only trying to siphon off a certain percentage of that business into their own tank. They don't have to achieve the same level of success Whole Foods has achieved--that's not their goal. They see that success and figure that if they copy the superficial aspects of it, without spending too much or going too far out on a limb, they can reap some of the benefits of being on the bandwagon. They probably view it as a short-term strategy, like cashing in on any other "fad."

[VeeDub]

The GREAT thing about these competitors springing up is that hopefully it will make shopping at the original Whole Foods a more pleasant experience. After creating/unearthing the $9 apple market demo, Whole Foods markets have become so popular that I now associate them with having to navigate around a crushing crowd of other foodies. Hopefully some of those folks will go off to the imitators so that I can get my own $9 apple on the rare occasion that I'm in the mood for it without having to throw an elbow to checkout.

[Graham Bird]

I agree and.....

Brand isn't ONLY people, though they are a (the?) major component.

The key to brand equity is the matching of the user experience with the brand promise. So whatever you promise (quality, price, experience, etc, etc.)make sure your product, people and channels deliver upon it.

Every interaction with a brand affects my view. The surly salesperson, the outstanding customer support agent (step formward HP!), the truck driver with a big logo who carves me up on the freeway, the tone of press etc. statements made, and on and on. They all impact my perception in some way - positive or negative.

On the coffee front, it's interesting that few have tried to mimic Starbucks 'English pub' feel that Howard Schultz espouses. They have fast service and an OK cup of coffee, they have bathrooms and wireless and a nice ambience. However, if I want the best coffee I'll go to Peet's - as long as I don't need to pee or connect to the Internet!

Some get it right (but see my Coffee Rant at www.truexperience.wordpress.com) but can STILL have irritating aspects to their brand.

Regards

[johnmoore (from Brand Autopsy)]

Graham ... by no means is this mimic mindset limited to just competitors of WFM & SBUX. As you point out, Continental, United, Delta, and others have all tried to mimic Southwest Airlines and they have all fallen short. Same goes for European airlines trying to compete with RyanAir and EasyJet. Maybe I'm naive but when Southwest's business model was created on a cocktail napkin, I'm not sure Herb Kelleher was also thinking about installing a high-performance infrastructure to support it. And maybe I’m too simple-minded to think that a by-product of Southwest’s customer service culture built around The Golden Rule was the creation of a high-performance organization.

Mike ... for Wal-Mart and the rest to siphon off a percentage of the natural/organic business from WFM, they must mimic WFM’s success in some way. Just stocking products from Earthbound Farms, Annie’s Naturals, and Kiss My Face is mimicking WFM. Can’t blame Wal-Mart and the rest for doing so because profit margins are fatter in selling natural/organic products. But because these grocers are simply replicating the products and programs WFM offers, it will be perceived by many consumers as an obvious ploy to cash in on a trend.

VeeDub ... what a great problem for WFM to have—too many customers! The WFM’s I’ve been in are crowded but not near the exaggerated extent of customers having to throw flying forearms to reach the checkout. Now WFM locations in Manhattan are super-crowded and logjams do develop at check-out but customers seem to take it all in stride. But as their stores do get more popular, it does make shopping at WFM more a destination shop than a fly-in/fly-out shop.

[Chris Posey]

I think that this "Living Brand" (see HBR, May 2005) is the essential, strategic aspect of differentiation on which so many retailers and service providers today are still skimping; hence, the "falling short" that you describe. Merely cloning the physical aspects of a successful company like WFM, without instilling a new culture (read: significant investment) will have execs. scratching their heads and wondering why it didn't work.

[Ethan]

So much for "the people":

http://www.commondreams.org/views06/0629-21.htm

Also, WFMs rep as "Whole Paycheck" doesn't bode well for people to use them as their one-stop shop. Not sure about anyone else, but I can't afford to drop $50 USD per bag of groceries. I do agree that "the people" are an important X factor, and a new chain called Market Street is getting this big time. Small example: No cart returns. The baggers ARE the cart returns.

(And no, I don't shop at Wal-Mart. There are alternatives.)

[RichW]

John,

Need to correct something - it's Giant Eagle, which is PA-based, not Giant, which is in MD/DC/VA area.

Talking not so much from a brand manager experience, but from a shopper experience with one of the erstwhile WFM competitors, and would like to relate the following:

I'm a half-mile from one of the two new Giant Eagle/Market District stores here in Pittsburgh. The expansion and remodeling has done a few things, most of which I'd consider negatives:

1. this location is far more inconvenient to get in/out quickly than it used to be, not due to the crowds (seemingly same traffic), but due to the sheer size - they expanded by about 75% from what was already a pretty big store. Not to mention everything moved.

2. prices have gone up seemingly unilaterally* - harder to find the "bargains". And that some prices rose for no reason (the former $0.99 store-baked baguette is suddenly $1.99) begs the question - what's the rationale behind the pricing? As this is the only chain supermarket within a 1.5 mile radius in a densely populated 'burb, people here are fairly incensed about higher prices.

2a. also have to wonder about the selection... every time I go in, I'm one of only 2 or 3 people in the massive cheese section and I've never seen anyone other than myself at the "Italian meats" deli counter.

3. on the "people" angle - nice, helpful, friendly... but not necessarily knowledgeable about product. Then again, can't say that the WFM people I've met know half as much about cheese, coffee, or certain types of 'gourmet' foods as the average cheese shop or specialty coffee store. But certainly the prepared foods staff should know that an "authentic salsa verde" is supposed to be green, not red, at a minimum (had to point that out to the manager).

Luckily for us, even in the Pittsburgh 'burbs, there are sufficient farmers markets and small purveyors that bridge the quality/price gap between a WFM-type market and a Waldbaums or Shop-Rite so we can get a fantastic apple (or most produce and meats) at a reasonable price.

*Giant Eagle has a gas station subsidiary called Get-Go. When you buy groceries at GE, you get discounts per gallon at GG. One prevailing theory locally is that this offer has been so successful with the rising gas prices that GE had no choice but to raise prices in order to afford giving up the gas discounts.

[johnmoore (from Brand Autopsy)]

Thanks RichW for clarifying its GIANT EAGLE and not Giant. My bad. I modified the post to include the correct GIANT EAGLE name and logo.

[Ed Brenegar]

This just points to the importance of being authentic. Copy-cat versions of other successful ventures are hard to sustain because the success of the one who is being copied is partly a result of a hard-wired culture out of which the original idea emerged, naturally.

The lesson is be your own innovator.

[Geno]

John I'm with ya 100 percent. My first job was a bagboy at BI-LO. I haven't stepped a foot in a BI-LO in over a year. The last time I went in a BI-LO store I managed to walk through the front door take a purchase to the cashier add never receive a thank you.

I'm a Publix fan. When they entered the South Carolina market I found out first hand they really care about customer service. I like the Whole Foods experience, but it's a little overwelming. So my guess is that if Publix allows these GreenWise Markets to be smaller in scale and continue their passion for customer service they should be successful.

[jbelkin]

I think it should be noted that we sometimes confuse the people who create and execute the concept and "peope" who actually work there. Just because WF is a touchy-feely company with lots of organic and great/ comfort/clean design elements - that's its success and not "people."

I shop at WF, Safeway and others and frankly, the people at WF are not all that friendly while the people at safeway actually seem happier so let's not get carried away with assigning the attributes of the look & feel of the product to its employees also.

WF is a great concept and really well executed and thus you are willing to pay a lot more for certain items because it looks and feels better ... I'm not arguing against that.

I think others can more than easily compete against that because it's not service or pricing that brings you to WF. It's the ambience and the selection of obscure items. They were smart to find that right formula to not be too snobbish like a Dean DeLuca but not too plebian like that Seattle chain.

Their prepared foods are top notch so that's hard to beat but otherwise - it's all atmosphere.

[Jeremy Pepper]

Good points - and I'm a huge fan of Whole Foods - but the case can be made that people make up any company. Whole Foods has done well because they found a great niche, and then staffed it with caring people - and the people do feel a part of the team.

But, it can also alienate people. Too much touchy-feely gets in the way of common sense sometimes, and I have seen it happen where there's not enough discipline in the stores.

Still, they have great French Toast.

[Jason]

Here is the amazing part about the Walmart in Plano. I live a few miles from the store, and the parking lot is always full. That is not the amazing part. The crazy thing about the Walmart location is that it is right across the street from the Super Target. And the parking lot for Target is always full as well. It is almost like the Super Target has benefited from having Walmart across the street.

I might add that the Walmart parking lot is full despite the protests from the Plano neighborhood about the Walmart Corporation building by their neighborhood. It is funny how many Mercedes and BMW's you can find in the parking lot.

[boake moore]

I own and started a coffee company 2 years ago to help local homeless children in Atlanta and orphans around the world. Since it is a “side” business we decided there would not be any overhead or salaries all the profits would go to help the impoverished children. For the past 2 years my business has grown through both on line orders and through the sale at churches around Atlanta Georgia. I recently approached WFM - Southeastern Corporate Office about selling my coffee in the local stores. The easy answer would have been no - I don’t have any brand recognition and WFM already has so many great coffee vendors. However I was pleasantly surprised to get the WFM response: you are a small local vendor and we like to support the small guys; and you are helping our community with your projects and we are an active member in helping our community so we would like to partner with you. I can proudly say I received my purchase orders this past week from WFM and my organic coffee will be on display this week at the 7 Whole Foods Markets in Atlanta. All the proceeds from the sales will go to a Family Crisis Center in Atlanta - where moms and children are left homeless due to spousal abuse. So the WFM customers get to try a great new organic coffee from a one man company while we get to help hundreds of homeless children. Doug and team are helping me setting up samplings and marketing so people will try a coffee that no one knows about - because as he says weat WFM are all about community.

Go to a grocery store and look at the products - the shelves are all controlled by huge conglomerates. Very few companies are willing to help the little guys and to really help the community. So many people preach - very few really act and live.
Thank you.

But it gets better. While we were going through setting up the paperwork and them teaching me about the WFM - John Simrell told his financial team about our new partnership. Well your employees on their own had a quick on the spot “lets help” campaign. Your employees brought in hundreds of clothes, books, shoes and toys for the Family Crisis Center - so much I have carried 2 large truckloads so far. We haven’t sold the first bag of coffee yet but WE are already making a difference.

So many companies talk the game of helping community but its been truly amazing to see the WFM culture and spirit at work. I recognize the risks your SE Office is taking in giving me an unknown some shelf space but its so refrshing to see a company do what they preach.

Again thanks for your strong beliefs on live and love and respecting your parents. Buts thanks most for beliefing in community and helping the little guys.
Sincerely,

Boake Moore
Mission Grounds Gourmet Coffee
“The Coffee Helping Children”

AND I hope many more companies start mimicking your values.

[pea]

I might add that the Walmart parking lot is full despite the protests from the Plano neighborhood about the Walmart Corporation building by their neighborhood. It is funny how many Mercedes and BMW's you can find in the parking lot.

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