The Amazon perishable effort will succeed

It’s not just retailers that are threatened by Amazon. Now, supermarkets will be too.

The Wall Street Journal recently reported that the online retail giant is slated to offer a new line of private-label brands, including perishable foods.

Amazon perishable
The Amazon perishable goods initiative will work.

As the report elaborated, these goods will first be available to Prime members as another nice perk to add to the $99 a year membership. (Thank goodness I have one.)

What’s more, the Amazon perishable initiative will join forces with brands like Happy Belly, Wickedly Prime, and Mama Bear. Doing so will allow the company to offer cooking oil, vitamins, coffee, tea, spices and nuts.

The Amazon perishable effort will succeed because of its brand.

While I have only once bought perishable food from Amazon — I had an unyielding craving for coconut covered cashews — I bought a top of the line brand and I ended spending a bit more than I wanted.

Now, overspending on select brands doesn’t have to be the case. I can choose an Amazon select brand for a fraction of the cost and feel satisfied with my purchase. Because of the trust I have in Amazon, I have the confidence that the product will be of quality. A hunch that I am not alone in that thinking.

Granted, the offerings are slim for the moment, but so was the Amazon Music catalog when it first began, and now it’s one of my favorites to frequent.

It’s a known fact. If your desire is to influence preference and increase market share, then it is a given that you must have a better understanding of your target audiences. And the Amazon perishable move is a perfect example of that awareness.

How many times have you thought how nice it would be to order your food from Amazon, have it shipped and be done with it? I have a lot. This is Amazon dipping its toe in the water of that reality. Before we know it, this Amazon Produce (UK based) and Amazon Fresh (select US cities) will be available for all of us as one entity. When that occurs, supermarkets had better watch out.

Whole Foods is no longer unique

Whole Foods is in trouble and, even worse, its complacency for its brand has caused it.

Since the end of 2013, Whole Foods stock has lost about half of its value. Once the darling of Wall Street, hipsters and the ever-increasing health conscious shopper, the organic foods chain’s brand is based on the simple promise of being America’s Healthiest Grocery Store. But in recent years, it has become complacent with its brand and failed to adapt to a changing market.

Whole Foods
Whole Foods is no longer unique.

Whole Foods brought natural foods to the masses. It was (and still is) dedicated to bringing the most natural, organic and sustainable foods to its loyal customer base. As the desire for organic foods continued to rise, it grew at an exponential rate. Rising out of humble beginnings in Austin Texas in 1980, it now has 434 stores in the US, Canada and the UK.

The uniqueness of Whole Foods has disappeared.

For a long time, Whole Foods was nearly the only supermarket that sold organic and natural foods. When a direct competitor would pop up, it would simply acquire it.

Being the only chain that offered quality organic and natural foods, its was able to charge a premium for its products. So much so that its nickname is Whole Paycheck because of its prices. But even that did not deter consumers.

The problem is that Whole Foods failed to understand that its model could be duplicated. Naturally, as the desire for organic and natural foods continued to grow, supermarkets latched on to the trend and started to offer the same kinds of organic and natural products.

Very few people can afford to do all of their grocery shopping at Whole Foods. So, as they trickle into their local grocery store to pick up laundry detergent or toilet paper, they gradually began to see more and more organic and natural foods on the shelves and in the produce section.

And guess what? It was less expensive and, low and behold, tasted pretty much the same as what they were getting at Whole Foods. This trend has risen to the point where it is not the largest seller of organic foods anymore. Costco is.

What Whole Foods continues to not understand is that it is not in the organic food business. It is in the supermarket business. I say this because in today’s retail food market, in order to be a supermarket you HAVE to carry organic and natural foods. The public demands it and having organic foods is a table stake. Even Walmart is selling organic foods in its grocery departments.

Whole Foods believes it still can get a premium price for its organic and natural foods that can be purchased at any supermarket now, simply because Whole Foods is selling it. In essence, it thinks that consumers will pay more for its brand. While that might have been true a few years ago, its recent sales and stock performance demonstrate that it is not the case any longer.

Whole Foods has failed to give consumers a reason to continue to use it in a market in which competitors are selling like products at lower prices.

I am sure Whole Foods would say that its organic and natural products are better than those you can by at your local supermarket or Costco. But experience with its own customers is proving otherwise.

In order for Whole Foods to survive, it will have to modify its model and bring its pricing more in line with the rest of the market – and even that may not be enough.

Whole Foods must utilize what little brand clout it has left and find a way to reconnect with its once loyal customer base and also reach out to new customers. And this can only be done with its brand.