What’s Up With Whole Foods?
Whole Foods is in trouble after its acquisition last August by Amazon. Customers and market experts are indicating its crown as Queen of Top-Quality food is slipping, with analysts citing more prominent displays of conventional, non-organic items such as Tropicana Orange Juice, HP Sauce, Carr’s Table Water Crackers, and Vitamin Water, as signs of “conventionalization.” Suppliers and employees are also complaining. Our own Chief Brand Officer had a dismal experience at her local Whole Foods recently, pressed to join Amazon Prime in order to get a discount, and informed that delivery was no longer part of service, unless she signed up for Instacart, presumably giving away oodles of personal data in the process.
It’s particularly notable that Whole Foods’ brand previously weathered a scandal (and settlement) in 2015 over systemic over-charging for weighed goodies, and yet this time it seems there’s real peril. What’s at the heart of this potential brand decline is the perception that Whole Foods no longer offers the best of the best, even at prices that might induce a nosebleed in a canny shopper. For a high-end brand, over-charging is less of a danger than going—or even being perceived as going—downmarket.
It’s a great example of trying to merge two brands with distinctively different propositions. You go to Amazon for cheap and easy; you go to Whole Foods for never-mind-the-cost quality and a hip, fresh shopping experience. The Atlantic magazine claims Amazon is attempting to exploit the fact that “human beings are fundamentally lazy and they don’t want to leave the couch to buy stuff,” even food, as the stunning growth in grocery delivery services such as Blue Apron indicates. But in a stampede to cash in on the food home-delivery market, it appears Amazon is trampling on the very genuine brand value of Whole Foods, not to mention its customers.
It could end like the disastrous acquisition of Snapple by Quaker, which resulted in the latter taking a $1.4 billion haircut, and the former’s brand bleeding by the roadside, to be scavenged by PepsiCo and Coca-Cola. Amazon is a digital company. It doesn’t have expertise with in-person customer service and retail. The e-commerce giant might have done better to have carefully assessed what people love about Whole Foods before dictating changes. Are you a disappointed Whole Foods customer? What could Amazon be doing differently?