Whole Foods Target Customers (Research)
Looking at operational feasibility, Whole Foods strategically decided to operate in a few key markets catering to a select target group, as this would ensure the stores are profitable.
According to MRI+, “People who bought organic foods in last 6 months: 55% are age 25-54, 60% are at least graduates and 53% have Income over $50,000.” The primary target market is men and women 22-40 (more women), who care about the sustainability of the earth and prefer all-natural products.
Many of Whole Foods customers are graduates and are from the upper-middle class of the society. They have opted for Whole Foods as a store by choice because of its brand experience, and for them its not about buying from a store, but more of a lifestyle choice. There is a probability that customers of Whole Foods may be in a line of work that holds similar beliefs to the Grocer, or participate in volunteer work having to do with earth sustainability. Many people that fall under this segment also have children, whom they share this belief and experience with.
A secondary target market that Whole Foods sells to is the health-conscious upper-class. It’s no secret that Whole Foods is more expensive than other supermarkets, its mission to make organic foods with no chemicals comes at a price. For this wealthy target market, shopping at Whole Foods provide
options with no worries over price. Most of these customers are college graduates and enjoy a luxurious lifestyle (even celebrities). This target differs from the primary market in the sense that this market sees Whole Foods as a healthier supermarket for the slightly wealthier, whereas the first market is more conscious about the organic sustainability features and are willing to pay a little more for them. Because sustainability isn’t this target’s main concern, an opportunity for growth could be laying down stores in higher income areas, where customers in this target market can be found. Providing more expensive gourmet foods could be beneficial to target this market as well.
Buying Preferences of the Organic Consumer at Whole Foods (Profiles)
Organic shoppers are influenced by outside sources including bloggers, the media, and their friends and they are much more likely to do the research and read the fine print than most consumer groups. Pairing this information with what you know about your target audience will help you make wiser marketing decisions that drive sales.
a) They Want the Best for Their Family
Parents want to do what’s best for their children, and buying organic is a great way for the whole family to eat healthier. It’s tough being a mom or a dad today — schools are underfunded, kids get distracted by video games and the internet, and exercise for children is at an all time low. Plus, many parents and household decision makers have concerns about the long-term effects things like GMOs and artificial dyes could have on their family’s health.
Buying organic assuages these fears, and makes them feel like a better parent. The fact that many organic products are now easily accessible, and more affordable than ever before, makes it easier for shoppers to make this commitment to their family, and not feel guilty because they didn’t.
b) Health Conscious is Not a Trend
Many consumers buy organic food for the health benefits it offers. While organic produce appears to offer comparable nutritional benefits to conventional crops, they utilize more environmentally friendly farming methods, meaning organic consumers are at less of a risk of eating foods contaminated with pesticide residue. Additionally, new research has found that organic produce contains significantly more antioxidants than conventional.
When it comes to meat, eggs, and dairy, a significant motivation to buy organic is to avoid the risks associated with factory farming — which has been known to be responsible for the spread of diseases like E. Coli and Salmonella.
Truly health conscious consumers are knowledgeable, and they do their research. They are on top of the latest news and trends, and they genuinely seek the healthiest options for themselves and their families. They see through inauthentic marketing and they read the fine print.
c) Socially Conscious, Environmentally Friendly, Animal Friendly
The social and environmental impact of consumption is of the utmost importance for some organic consumers. They oppose the environmental damage done from pesticide runoff into rivers, and they find the conditions under which factory farms operate appalling for workers and animals alike.Organic produce offers an environmentally friendly alternative, for those who care about the earth and don’t want to see it destroyed. Buying organic makes these consumers feel that they are doing they’re social and moral duty to preserve the environment for the next generation.
Just like the health conscious, they are oftentimes very educated and see through brands that are trying to jump on the bandwagon without the systems, products, and production to back it up.
d) It’s Cool!
But wait . . . you don’t buy organic? For many, green is the new black. It’s cool — and in many circles even expected — to buy organic, and no one likes to feel left out. Free range, cage free, organic, non-GMO, no artificial flavors, no animal testing, and the list goes on, is trendy. And trendy sells.
This does not mean that consumers who are keeping up with the Jones’ don’t also fall into other conscious and educated categories above, it just means that marketers need to understand there are multiple factors that play into these buying decisions.
e) It’s Much More Accessible Than Ever Before
In 1980, there was just one Whole Foods. Far fewer people cared about organic, if they had even heard of it. Today, not only does Whole Foods have 340 stores nationwide, but even companies like Walmart and Target are getting in on the organic action. Farmers markets and locally made and sourced products are more popular than ever before.
While buying organic is more accessible than it was even 3 or 5 years ago, and prices have certainly gone down, it is still a financial investment. It costs more to create organic products, and this is passed down to the consumer in most cases. However, this is not stopping organic shoppers by any means. They don’t have to drive to a local farm for the freshest, cleanest produce anymore. They can stroll down the street to their local grocery store now.
What this means for marketers is that while organic is highly coveted amongst a large group of consumers, there are more competitors than ever before. Consumers expect accessibility and are now able to price compare like they weren’t able to do before in this industry.
Overall, we should expect consumer expectations for quality, taste, and healthfulness to continue to increase. Whole Foods will need to reinvent themselves. In the past, food companies often pushed to lower their costs rather than to win consumers with their taste and varieties. Food companies must keep in mind that consumer demand for these things is based on consumer perceptions. For example, almond milk in the refrigerated section is not fresher, but it is perceived to be. There has been a general rejection of new technology with food. Thus, any food with new technology must be carefully marketed to consumers and shown to benefit them in some way. Ideally it should have an enhanced product attribute that consumers want.
Consumers must perceive high eating quality in order for food products to command a premium price. This is especially important for socially responsible and origin-based products. We can expect increased product differentiation and customization. At the same time, there will always be a budget-conscious consumer segment. This can mitigate other trends. Dietary globalization will provide new opportunities abroad for companies.
As demographics change, retailers must change also. They need to offer new products and flavors that might have Asian or Hispanic influences. They need to be conscious of calorie levels. They need to position snack items as healthful meal options for single-person households. Whole Foods can capitalize on is college- aged individuals who care about sustainability. The primary market consists of earth-conscious customers, just as this one does, the only difference between these markets is the age. As the new organic age spreads, many people are jumping on board and embracing natural foods. In fact, according to Euromonitor Passport, ” gluten- free food and organic beverages were the fastest growing categories in US health and wellness.” There is a new kind of “hippie” in today’s society that we call “hipsters.” These hipsters have many similar views as the first target market but with far less money due to their young age. With Whole Foods being so expensive, there needs to be a change in pricing if it wants to reach this potential target market. The retailer needs to offer sales or rewards systems with amazon ( Whole Foods is acquired by Amazon) if Whole Foods wants to see this market flood in, but if it lowers sales than other markets might be affected. For example, if wealthier individuals see the clientele change and food start getting cheaper they might decide to change stores, so finding opportunity for this market is difficult. This might be a step in the right direction towards reaching the maximum consumer base.
Whole Foods Target Customers (Research)