W H O L E F O O D S R E V I E W

BRAND NEW HAPPENINGS

AGENDA

• Problem Statement• Overview of objective

• 5 Recommendations• Explanation and methods used• How Whole Foods will accomplish their goals

INTRODUCTION

• Brand New Happenings Team Members• Eric Bontz• Laura Finch• Dennis LaMantia• Stephanie Morgenstern• Karl Swanson

PROBLEM STATEMENT

• Increase market share by providing a great customer experience

• Ensure Whole Foods is differentiated from traditional grocery stores and smaller boutique stores

• Remain loyal to their mission

SEGMENTATION

• Survey respondents were screened to ensure they were familiar with Chicagoland grocery stores and spent $350 or more per month on groceries.

• Qualifying respondents were then segmented based on gender.

METHODOLOGYPerceptual Mapping Survey

Males Females54 Attempted 31 Completed 57

%66 Attempted 36 Completed 55

%Conjoint Analysis Survey

Males Females53 Attempted 30 Completed 57

%108 Attempted 44 Completed 41

%

• Value Curve Analysis due to the mature market

RECOMMENDATION #1INCREASE NON- GROCERY OFFERINGS

INCREASE NON-GROCERY PRODUCT OFFERINGS

• Perceptual Map (Male/Female) – Wide Selection and Other Products

• Demographic Info – Number of Stores Shopped

• Value Curve – Selection

-1.5 -1 -0.5 0 0.5 1 1.5-0.2

0

0.2

0.4

0.6

0.8

1

1.2Whole Foods

Other Products

Wide Selec-tion

Preference

AttributesBrand

0.2 0.4 0.6 0.8 1 1.2 1.4

-1.5

-1

-0.5

0

0.5

1

Whole Foods

Other Products

Wide Selec-tionPreference

AttributesBrand

PERCEPTUAL MAPS – WIDE SELECTION AND OTHER PRODUCTS

Perceptual Map - Males Perceptual Map - Females

DEMOGRAPHICS – NUMBER OF STORES SHOPPED

5%

57%

38%

Number of stores - Men

4%

40%

41%

15%

Number of stores - Women

1

2

3

4 or more

VALUE CURVE MUST- HAVE – SELECTION

Conv

enien

ce/Loc

ation

Price

(Value)

Wine/Sp

irits

Select

ion

Ameni

ties (

Banks/

DVDs)

Coup

ons/P

romoti

ons

Operat

ing Hou

rs

Store

Greeter

s

Social

Respon

sibilit

y0

1

2

3

4

5

6

Map 4 - Reduce Must-Haves

Regular StoresHigh-EndWhole Foods

EXPAND NON-GROCERY PRODUCT OFFERINGS

• Offer increased selection of non-grocery items to allow for “one-stop” shopping experience.

RECOMMENDATION #2INCREASE CONSUMER VALUE PERCEPTION

INCREASE CUSTOMER’S PERCEPTIONS OF VALUE RELATIVE TO PRICE

• Perceptual Map (Male/Female) – Sales/Promotions and Low Prices

• Demographic Info – Coupon Usage

• Conjoint Analysis – Price of Milk

PERCEPTUAL MAPS – SALES/PROMOTIONS AND LOW PRICES

-0.4 -0.2 0 0.2 0.4 0.6 0.8 10

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

Preference

Sales/Promotions

Low Prices

Whole Foods

-1.5 -1 -0.5 0 0.5 1 1.5

-1

-0.5

0

0.5

1

1.5Whole Foods

Preference

Sales/Promotions

Low Prices

Perceptual Map - Males Perceptual Map - Females

DEMOGRAPHICS – COUPON USAGE

2%

40%

58%

Coupons - Men

AlwaysNeverSometimes

13%

16%

71%

Coupons - Women

AlwaysNeverSometimes

CONJOINT ANALYSIS MALE – PRICE OF MILK

open 24 hoursopen 18 hoursopen 10 hours

120,000 sf46,000 sf10,000 sf

full pharmacyover the counter

no drugscashier & self-checkout

only cashiersonly self-checkout

7 min wait time4 min wait time1 min wait time

$5 gallon of milk$4 gallonn of milk$3 gallon of milk

10 miles5 miles

0.5 milesIntercept

0.0860.084

0.0600.031

0.0020.060

0.1120.000

0.0600.174

0.2240.0600.060

0.2360.356

0.0600.186

0.4130.060

0.4651.000

0.718

CONJOINT ANALYSIS FEMALE – PRICE OF MILK

Intercept0.5 miles

5 miles10 miles

$3 gallon of milk$4 gallonn of milk$5 gallon of milk1 min wait time4 min wait time7 min wait time

cashier & self-checkoutonly cashiers

only self-checkout10,000 sf

120,000 sf46,000 sfno drugs

over the counterfull pharmacyopen 10 hoursopen 18 hoursopen 24 hours

0 0.2 0.4 0.6 0.8 1 1.2

1.0000.974

0.5380.169

0.9380.645

0.1690.556

0.4960.169

0.5280.485

0.1690.169

0.0580.000

0.1690.235

0.3350.169

0.2500.250

INCREASE AWARENESS OF CURRENT DISCOUNTS AND DEVELOP NEW PRINT ADS

Eat Healthily For Not A WHOLE Lot

$1.00 offany ONE (1)

8" to 9" Fresh Fruit

Tart

$2.00 offany ONE (1) package of

Granny Smith’s Apples

RECOMMENDATION #3INCREASE SHOPPER LOYALTY

3. INCREASE CUSTOMER LOYALTY

• Perceptual Map (Male/Female) – Sales Promotions vs. Preference

• Demographic Info (Male/Female) – Store Loyalty Program Importance

• Value Curve – Create Delighters to Increase Loyalty and Retention

PERCEPTUAL MAPS – SALES PROMOTIONS

DEMOGRAPHIC INFO – STORE LOYALTY PROGRAMS

VALUE CURVE – CREATING DELIGHTERS

INCREASE CUSTOMER LOYALTY

• Create a nation-wide customer loyalty program• Track previous purchases, customize promotions, and

offer discounts to retain current customers while attracting new shoppers

WHOLE FOODS REWARDS

RECOMMENDATION #4MORE CONVENIENT SHOPPING

MORE CONVENIENT SHOPPING

MORE CONVENIENT SHOPPING

MORE CONVENIENT SHOPPING

SHOPPING FREQUENCY

ACTUAL PLANS

• Plan to open smaller stores (25,000 sf instead of typical 35,000 – 50,000 sf) in less affluent cities1

1 http://www.forbes.com/fdc/welcome_mjx.shtml

ACTUAL PLANS

• Plan to open 52 – 59 news stores over the next two years2

Whole Foods Jewel

2 http://www.forbes.com/fdc/welcome_mjx.shtml

RECOMMENDATION #5DEL IGHT CUSTOMERS WITH EXTRAORDINARY SERV ICE

5. DELIGHT CUSTOMERS WITH EXTRAORDINARY SERVICE

• Focus on high customer service in brand message• Decrease Average Checkout Wait Time to four

minutes or less• Create an environment that engenders a

community feeling with classes and events• Helpful Staff willing to assist with menus, recipes, cooking

strategies geared towards making customers healthier• Classes on how to shop and cook with a healthy and/or

organic focus• Events where people can come and prepare their own

food together to take home ready-made healthy meals

5. DELIGHT CUSTOMERS WITH EXTRAORDINARY SERVICE

Wait Time Weight - Males

7 min wait time

4 min wait time

1 min wait time

0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4

0.060

0.236

0.356

Wait Time Weight - Females

1 min wait time

4 min wait time

7 min wait time

0 0.1 0.2 0.3 0.4 0.5 0.6

0.556

0.496

0.169

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1

-1.5

-1

-0.5

0

0.5

1

1.5Whole Foods

Customer Service

Preference

Service Preference- Females

Service Preference- Males

-1.5 -1 -0.5 0 0.5 1 1.5

-1.5

-1

-0.5

0

0.5

1

1.5

Good Cus-tomer

Service

Preference

Whole Foods

• Decrease wait time for both segments and increasing perceived customer service level for females

5. DELIGHT CUSTOMERS WITH EXTRAORDINARY SERVICE

Conv

enien

ce / Lo

cation

Price

(Value)

Wine/Sp

irits

Food S

electio

n

Amen

ities (

Banks/

DVDs)

Coup

ons/P

romoti

ons

Operat

ing Hou

rs

Store

Greeter

s

Social

Respon

sibilit

y

Helpful

/ Kno

wledge

able S

taff

Communi

ty Ev

ents &

Class

es0

1

2

3

4

5

6

Regular GroceryHigh End OrganicWhole Foods

• Delight Customers with the unexpected levels of service, education, and community at your stores.

5. DELIGHT CUSTOMERS WITH EXTRAORDINARY SERVICE

• Proposed Floor plan to implement changes

SUMMARY• Increase market share by providing a great customer experience

• Increase Customer Loyalty• New Whole Foods rewards program

• Delight Shoppers with Extraordinary Shopping Experience• Employ a customer-focused business strategy

• Offer More Convenient Shopping• Open more smaller stores

• Ensure Whole Foods is differentiated from traditional grocery stores and smaller boutique stores• Increase Non-Grocery Offerings

• Allow for “one-stop-shopping”

• Remain loyal to their mission• Improve Customer Value Perception

• Healthier eating options at fair prices