Whole Foods Plans to Target Most Loyal Customers to Tailor the Customer Experience

In its quest to set a new strategic direction that will deliver improved performance, magnified customer loyalty, and great brand advocacy, Whole Foods is ready to cater to its best customers.

Whole Foods CEO John P. Mackey said this week that the company’s nine-point plan is “still very much intact, we are resetting and refining our growth strategy and moving faster in fully implementing category management, which is such an integral part of our go-forward merchandising, pricing, marketing, and affinity strategies.”

Over the past 38 years, Whole Foods Market has played a leadership role in fresh, healthy, natural, and organic foods becoming mainstream.

“Now that we have, we must revisit the question of how to best serve all of our stakeholders,” Mackey said. “What has become clear is that we don’t want to compete in a race to the bottom as consumers have ever-increasing choices for how much and where they shop. Through our affinity work, we know that our core customers represent our largest customer segment and account for a majority of our sales. They are dedicated to the high-quality, fresh, healthy foods, and transparency that we offer. While they are already highly engaged with our brand, there is still significant opportunity for growth.”

What’s more, Mackey explained that if these loyal customers add just one more item per trip, “the sales potential is significantly greater than with any other segment. Going forward, Whole Foods Market will focus on serving this growing niche of customers better than ever before. This is a win-win, as delighting our most committed and informed customers, our Whole Foodies, results in a better experience for all of our shoppers.”

Mackey sees “tremendous opportunities” in applying this new, targeted approach to all aspects of the company’s business strategy, from marketing to merchandising to real estate.

“We kicked off the new year with our Eat Real Food brand campaign, which targets our core customers with its Eating Well and Living Well theme,” Mackey said. “While the campaign has been on the air for just a short time, we’re pleased with early indicators that show positive trends on ad recall and purchase intent, and we look forward to establishing an ongoing customer dialogue through our new, always-on paid media plan.”

Is this strategy of targeting its best customers the right way to go for Whole Foods?

Jon Siegal, vice president and general manager for Stellar Loyalty, offered his thoughts on Whole Foods’ targeting plan to Loyalty360.

“The innovators in the retail grocery space today are zeroing in on their best customers and using technology to tailor the experience to those customers’ preferences,” Siegal explained. “New digital approaches are enabling these retailers to reduce friction in the shopping experience, make it more customized, and deliver meaningful rewards that encourage engagement. To Mr. Mackey’s point, if you increase customers’ shopping carts by even just one item per visit, you’ve grown your business significantly. But more importantly, if you’ve done it by delivering something of value to your customers, such as relevant digital coupons delivered directly to their smartphones in the context of their shopping experience, then you’ve gone a long way to engendering loyalty, retention, and frequency, as well as spend per visits.”

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