It’s been a busy week for Whole Foods, as the natural products retailer juggled fourth quarter earnings announcements, several interviews with its CEO and news about its new millennial-focused “365 by Whole Foods Market” stores.
Forget Clipping, Digital Couponing Launches
Over the past year Whole Foods has refined a rewards program at several of the retailer’s Philadelphia and New Jersey locations. The program rewards customers for every dollar spent in-store. Whole Foods is planning to incorporate some parts of the program as part of a recently launched a digital couponing app, which gives customers a way to save on traditional grocery items with exclusive app-only coupons.
The app also offers discounts on perishable unbranded items such as produce, bakery and meat. On the quarterly earnings call, company leadership stated that promotion of perimeter items are a key focus for the 2016 year and key to the company’s success.
The use of digital coupons over paper also allows the retailer to create holiday-themed and time-sensitive promotions. Launched earlier this month, the app has featured coupons such a $5 off $15 worth of produce, a discount on made-in-store guacamole for Super Bowl weekend, and for Valentine’s Day, a price reduction on a dozen roses.
Whole Foods Market Sees Strategic Pivot
In a Bloomberg TV interview, Whole Foods co-CEO Walter Robb was asked if a decrease in same-store sales and margins would make it harder for the retailer to pivot and focus on 365 stores.
Robb’s response was that the decrease in margins was not an issue.
“The decrease in the margins is our pivot,” he said. “We basically said over the next couple of years we’re going to take the gross margins down incrementally quarter to quarter in conjunction with our cost restructuring efforts. The strategic pivot is around reshaping the company, transforming the company to compete better in the marketplace today.”
Whole Foods has been trying to shed the moniker “Whole Paycheck” and adjusting margins to drop its prices and match those of its competitors. The initiative been a focus for the retailer over the past few months.
Kale, Chia and Tattoos?
Whole Foods last year announced that its 365 stores will house smaller independent businesses that can “bring their special mojo.” Entrepreneur broke the news the plan could extend to tattoo parlors.
Initially, Whole Foods announced that the “Friends of 365” business would be selected through a contest that involved a public vote and then pitch-off at its Austin headquarters. However, the 365 website makes no mention of the contest (which, according to a previous timeline, should have ended by now) and indicates that the chain is still looking for options.