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DMGT 783 - WINTER 2015 - MARIA DE LA VEGA 1
Brand Analysis
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America’s Healthiest Grocery Store Whole Foods is a mission driven company that focuses on groceries. They pride themselves in having the finest natural and organic food options, implementing the strictest quality standards, and having an unshakable commitment to sustainable agrigulture.
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Whole Foods was founded in 1980. It currently has 408 stores in the US, Canada and the UK and big expansion plans; they want to have 1200 stores in the US alone in the next few years. For 17 years, Whole Foods has been a part of the “Best Companies to Work For” list.
Values Matter campaign
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Rational and emotional
brand attributes
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Rational Brand Attributes Wholesome
Premium
Conscious
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A brand that promotes and helps achieve good health and physical Well-being with integrity.
A brand that offers top quality and most exceptional products and services, for consumers, employees and suppliers.
A brand whose employees and investors are aligned and constantly fight to reach the higher purpose: helping people eat healthier, educating them, and helping them have more vitality.
emotional Brand Attributes fresh
A brand that has a new “hip� outlook on achieving a healthy lifestyle through the highest quality of organic and natural products.
humanized
A brand that has real people of different ethnicities, ages, genders, personalities that are curating food, and transparently educating customers about the products they buy to contribute to their health and wellbeing
authentic
A brand that delivers on the promise of top quality and socially responsible products, through ethical processes.
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Brand
swot analysis
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Brand SWOT Analysis Strengths
Weaknesses
Wide variety of organic and natural products that range from produce to wine
Premium pricing, perceived as expensive. Nickname: Whole Paycheck
Highest quality standards for all products
No online shopping and delivery system
Responsible farming and sustainability driven
Missed earning estimates in 2014
Socially responsible with communities and farmers Employee diversity/inclusion 400+ stores in the US, Canada and UK
Opportunities
Access to e-store limited to holidays only Late inclusion of technology-driven programs (loyalty programs, online shopping, mobile app)
8th Largest food and drugstore in the US. Leader in it’s category.
Shareholders concerned that WF is not moving quickly in the technology aspect
36 years of presence/experience
Declining sales
Threats
Opening stores in low-income parts of cities with new messages
Cost of organics are going down,
Expanding more store brand items, to appeal to the conscious consumer
expectations of how much they should
consumers might adjust their pay
15 – 20 million advertising campaign to crown the company “America’s healthiest grocery store”
Super market retailers are now
Piloting many technology-driven programs that could potentially increase revenue
Natural and gourmet retailers going
Price cutting strategy
(Sprouts, Fairway)
offering organic products as well
public, eventually will go national
Unexplored market overseas Competition also has socially conscious culture Fairway plans to open 300 stores nation wide
Sources locally, no centralized distribution centers Substantial social media presence
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Brand
myth
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nourishment natural
balanced
work
values
organic
healthy
The garden of meaningful choices flowering
relationships growing
producing
greater good
passion
consciousness
5 years
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STEEP Social
Increasing demand of organic/natural products Environmentally conscious consumer Mindful consuming Health conscious population Preventative measures for common illnesses through alimentation
Technology
Mobile Apps Wearables that manage health and remote patient monitoring End-to-end proximity platforms in retail Affinity programs Big Data
25% of the population in the US will be children of Hispanic and Asian immigrants Shoppers gain transparency into retail supply chain 14
Political
Legislators demand transparency in food safety Technology strains governments
STEEP Economic
Asia Pacific fastest growing organic market Organic food market will grow about 14%
Environmental
Pesticides, GMO’s and antibiotics in food products will increase Programs for the efficient use of resources
From big stores to small stores Programs for waste reduction US retail industry enters Post Modern retail evolution phase
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Urban agriculture
Driving Forces
MORE SIGNIFICANT
Big Data Increasing demand of organic/natural products
Asia Pacific fastest growing organic market
Pesticides, GMO’s and antibiotics in food products will increase Wearables
Efficient use of resources
Urban Agriculture
Organic food market will grow about 14%
Technology strains governments Legislators demand transparency in food safety
Preventative measures for common illnesses through alimentation Mindful consuming
Waste reduction
Health conscious population
CERTAIN Mobile Apps
Environmentally conscious consumer
UNCERTAIN
Affinity programs
LESS SIGNIFICANT
Social Technological Economic Environmental Political
Link Diagrams Economic Driving Forces
Primary
Secondary
Organic food market will grow about 14%
Uncertain
Certain
Asia Pacific fastest growing organic market
Uncertain
Certain
Organic food market will grow about 14%
Significant
Insignificant
Asia Pacific fastest growing organic market
Significant
Insignificant
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Link Diagrams Environmental Driving
Primary
Secondary
Efficient use of resources
Uncertain
Certain
Waste reduction
Uncertain
Certain
Urban Agriculture
Uncertain
Certain
Efficient use of resources
Significant
Insignificant
Waste reduction
Significant
Insignificant
Urban Agriculture
Significant
Insignificant
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Link Diagrams Political Driving Forces
Primary
Secondary
Technology strains governments
Uncertain
Certain
Legislators demand transparency in food safety
Uncertain
Certain
Technology strains governments
Significant
Insignificant
Legislators demand transparency in food safety
Significant
Insignificant
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Link Diagrams Social Driving Forces Preventative measures for common illnesses through alimentation
Primary
Secondary
Uncertain
Certain
Uncertain
Certain
Health conscious population
Uncertain
Certain
Environmentally conscious consumer
Uncertain
Certain
Preventative measures for common illnesses through alimentation
Significant
Insignificant
Significant
Insignificant
Health conscious population
Significant
Insignificant
Environmentally conscious consumer
Significant
Insignificant
Mindful consuming
Mindful consuming
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Link Diagrams Technology Driving Forces
Primary
Secondary
Wearables
Uncertain
Certain
Big Data
Uncertain
Certain
Mobile Apps
Uncertain
Certain
Affinity Programs
Uncertain
Certain
Wearables
Significant
Insignificant
Big Data
Significant
Insignificant
Mobile Apps
Significant
Insignificant
Affinity Programs
Significant
Insignificant
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SCENARIO LOGIC
UNSUSTAINABLE
Rain, rain, go away
Following the herd
Strong as an ox
ENVIRONMENTAL
SOCIAL
SHARED
SUSTAINABLE 22
FRAGMENTED
Planting the seed
CAUSE + EFFECT DIAGRAM Cause Effect
Preventative measures for common illnesses through alimentation
Mindful consuming
Efficient use of resources
Society will be more health conscious and consumers will seek healthy food choices, they will demand more organic products, making the organic food market grow about 14%
Consumers will become aware of what, when, and how they are eating. This will develop a healthier and happier relationship with food among consumers.
In Europe, The plan to efficiently use resources will help boost efficiency, productivity and competitiveness. Companies that efficiently use raw materials, water and other manufacturing inputs for their products are able to cut costs, helping them to become more competitive.
Social
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Environmental
SWOT: 5 YEARS Strengths Shoppers gain transparency into retail supply chain.
IMPLICATIONS Traceability, how to show consumers where their food comes from differently?
Weaknesses
Opportunities
Threats
Big Data.
Rise of Asia market.
End-to-End proximity platforms in retail.
21% of the US population will be children (grown adults) of Hispanic and Asian immigrants.
Wearables that manage health and remote patient monitoring.
Retail trends: From big stores to smaller stores. Competition moving into WF new market strategy. US retail industry enters the Post-Modern Retail evolution phase.
IMPLICATIONS
IMPLICATIONS
IMPLICATIONS
Analyze the amount of Data that WF has been able to collect and make the most of it.
Enter unexplored Asian markets.
Explore unsaturated areas in which smaller stores can appear.
Target Hispanic and Asian population with locally grown products that come from their cultural backgrounds
WF will have to dive into the online retail market when the competition has had years of experience in it.
Online and off-line “HyperCompetition� will define the PostModern Retail Evolution phase. WF will have to invest a lot in their online presence.
Find ways to connect wearable technology into the WF retail experience.
Economic
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Technological
Political
Social
Environmental
PLOT: Planting the seed
SOCIAL - ENVIRONMENTAL
Turning point Competitors have started opening smaller stores, and they too carry organic brands of products. Because demand of organic products has grown, prices have gone down, WF no longer perceived as expensive as it was in the past, people wonder if their quality standards are at stake.
Rising action
falling action
As the organic food market grows, WF expands it’s retail stores to new and unexplored markets within the US. Targeting lower income neighborhoods, and new cities. Invested in it’s social responsibility and sustainability plan WF finds ways to efficiently use resources in these stores, as well as demand these actions from it’s suppliers. They become more competitive and cut costs in their own 365 brand making it more accesible to different people.
WF will create more programs in which they teach consumers about the possibilities and benefits of mindful consuming, and be even more transparent in their retail supply chain by employing technology to actually show consumers where their food comes from instantly. Targeting consumers from Hispanic and Asian heritage will be a key strategy, offering new organic and locally grown products that are appealing to them. The price drop in organic products will allow new consumers to access better food alternatives that they can find at WF.
Setup
Conclusion
By 2020, almost 75% of deaths world wide will be accounted for chronic diseases. In a world where healthcare is becoming more and more expensive, people have turned to finding new ways to prevent these common illnesses. Through mindful consuming, and eating organic products people believe they can prevent or counteract the appearance of these illnesses.
Because WF has been focusing on people’s roots, celebrating their core values, and teaching people how to live a better, more fulfilling and healthy life, for years, this will be a strength over the competition. Organic food cost will make it more accessible to new markets and the “Whole Paycheck” image will start to fade.
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PLOT: following the herd
SOCIAL - ENVIRONMENTAL
Turning point Competitors have embraced end-to-end proximity platforms and included wearables into their strategy plans, diving into consumer’s health needs and helping them go through them. They have invested into making their online and physical experiences very tight, targeting their customer’s convenience.
Rising action
falling action
As competitors move into smaller stores, they follow WF’s once innovative plan to reach unexplored markets in the US and Asia. Because competitors have had a strong online presence years in advance of WF, they have now entered the Post-Modern retail phase while WF stays behind trying to catch up.
The small segment of the market that has embraced mindful consuming has decided to incur in urban agriculture and grow their own food, thus not needing to go to WF to buy their produce.
Setup
Mindful consuming is a passing fab and people have not gained consciousness that the quality of the food they eat directly affects their health. People are set on maintaining a tight budget and because the cost of organic products has gone down, people distrust how organic the products really are. Meanwhile, the use of pesticides, GMO’s and antibiotics continue to rise. Plans to efficiently use resources and reduce waste have failed and urban agriculture has gained strength.
Conclusion
Failing to understand the small amount of data gathered from recently created affinity programs, WF fails to understand it’s customers needs and their base is beginning to diminish. WF is forced to halt their expansion plans, close some locations and reduce it’s employee work force.
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Planting the seed
SOCIAL - ENVIRONMENTAL
Preparing the future generation of consumers from a very early age
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By 2020, almost 75% of deaths worldwide will be accounted for chronic diseases. In a world where healthcare is becoming more and more expensive, people have turned to finding new ways to prevent these chronic illnesses that are claiming their lives. To prevent or counteract the appearance of these illnesses that have been caused by years of bad eating habits, sedentarism, and consuming food that has been genetically modified and exposed to an extraordinary amount of pesticides and antibiotics; consumers are now beginning to change their lives through mindful consuming, and eating organic products. As the organic food market steadily grows, Whole Foods expands its retail stores to new and unexplored markets within the US. Targeting lower income neighborhoods, and cities where operations had not been opened before. It becomes more competitive and cuts costs in its own 365 brand making it more accessible to people that have lower income than it’s 28
traditional consumer base. It develops more Competitors like Trader Joe’s and Sprouts, alternatives in it’s frozen products, targeting have started opening smaller stores in similar areas. Now, even big box stores the needs of this new consumer base. like Wal-Mart, Publix and Kroger also carry their own lines of organic brands, making Invested in it’s social responsibility and it challenging for Whole Foods to create sustainability plan, Whole Foods tries to new ways to differentiate itself. Because find new ways to efficiently use resources the demand of organic products has grown, in these new stores, as well as demand these sustainable actions from it’s suppliers. more suppliers are acquiring organic agriculture practices and prices have Several of these new locations have gone down, making it easier for competitor received LEED (Leadership in Energy and Environmental Design) certifications for their stores to offer organic products at a more convenient price for their consumers. The environmental impact efforts. price drop in organic products will allow 29
new consumers to access better food alternatives. Since Whole Foods has always been the synonym of quality and healthy food products, and organic products have lower prices now, new consumers will start to go to Whole Foods to purchase these kinds of products. The traditional perception of Whole Foods being expensive and overpriced will start to fade. Meanwhile, this price drop will cause some of its loyal customers to wonder if the lower prices are an indication that Whole Foods’ quality and product standards are at stake.
Whole Foods is invested in creating more programs in which they teach people in the community where they are opening stores, about the possibilities and benefits of mindful consuming, cooking classes where consumers can learn a variety of recipes using local organic products, and the benefits of organic products in their life. Whole Foods will also continue partnering with local community colleges, schools and community gardens to send out these messages. Focusing on teaching these concepts to younger minds will be a very important part of it’s efforts to establish better habits into the community, and at the same time working to build a future loyal customer base. Over the years Whole Foods has established a series of programs focused on their customers. Giving back to the community has always been a priority. Concentrating on people’s roots, celebrating their core values, and teaching them how to live a better, more fulfilling and healthy life, are all key elements of how 30
Whole Foods can keep making a difference and stand out from its competition. Targeting consumers from Hispanic and Asian cultures will be a key strategy, by offering new organic and locally grown products that are appealing to them. By 2020 25% of the American population will be of Hispanic and Asian heritage, calling to their roots will create an emotional bond with them. Whole Foods will also become even more transparent in their retail supply chain by employing technology to actually show consumers where their food comes from instantly. Tackling technology will be a key component. Since Whole Foods has been a late adopter to e-commerce and affinity programs this will pose a challenge. Consumers have been using reward programs from the competition for years, it has somehow lost its appeal, and the benefits don’t seem as big as they once were. In a world where technology grows at an ever increasingly fast pace will Whole Foods be able to keep up?
Planting the seed Implications
Creating programs for children won’t have effect unless their parents are also involved and open to them. How can parents be reached and persuaded to participate? Whole Foods must pick up the speed in which it embraces changes in technology or it will lose a very important segment of their market.
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Following the herd SOCIAL - ENVIRONMENTAL
There comes a point in which the late adaptor must become the leader.
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The world continues to watch how chronic illnesses claim the lives of it’s population and even though they know that there are ways to prevent this, the vast majority of people chose to continue to live their lives normally, not adapting new lifestyles, nor changing their habits. Mindful consuming has become a passing fab and people have not gained consciousness that the quality of the food they eat directly affects their health. They are set on maintaining a tight budget and refuse to buy organic products on the misconception of them being exponentially more expensive than traditionally grown products. Meanwhile, the use of pesticides, GMO’s and antibiotics in produce continues to rise, increasing the risk of health issues in consumers and the degradation of the soil where produce is grown, leading to negative impacts on the environment. Plans to efficiently use resources and reduce waste have failed, and the goal of reducing carbon pollution to avoid catastrophic impacts from climate change has not been met. 33
Hispanic and Asian population in the US has grown exponentially. The adult children of Asian and Hispanic immigrants now make up 25% of it’s population. Whole Foods has attempted to meet the demand of products that appeal to this customer segment’s cultural heritage and that they wish to have access to, but it is struggling to meet this demand. Since it was founded, Whole Foods has always supported locally grown, raised and produced food, but most of the products that this segment wants cannot be produced locally because the local landscape does not permit it. These customers are forced to satisfy their needs by heading to the competition that imports these products from other countries. Since 2014, Whole Foods has had enthusiastic plans to expand its stores, from 411 to 1,200, and it started doing so by opening operations in unexplored, and previously overlooked neighborhoods. These neighborhoods were characterized by having residents whose income was 34
lower than the income of Whole Food’s most common and traditional customer base. Whole Foods’ compromise with the environment has been one of it’s core values since it’s foundation, and many of it’s stores have received LEED (Leadership in Energy and Environmental Design) certifications because of it’s efforts to include in them renewable energy sources, recycling programs, green building and other green initiatives. But, because of it’s plans to open over 700 stores in a shortterm period of time, Whole Foods has reduced the number of stores in which solar panels and wind farms are used as their main source of energy, thus, not reaching its carbon footprint goal. Meanwhile, Whole Foods’ competitors have decided to move into smaller stores and they follow Whole Food’s once innovative plan to reach unexplored markets. Whole Foods now finds itself in a market that has become saturated and struggles to make a difference among it’s customers, that are looking for their own economic convenience.
Competitors like Wal-Mart, Publix and Kroger have had a strong online presence for years, while Whole Foods has only recently incurred on it. These competitors have now entered the Post-Modern retail phase, and Whole Foods has stayed behind trying to catch up by joining the e-commerce movement, and building it’s online retail experience. Meanwhile, WalMart, Publix and Kroger are creatively looking for ways to integrate their physical store experience with their online experience. In this new phase, they will already have both, physical and digital, while Whole Foods is only beginning to build its’ digital retail space. Competitors have also embraced endto-end proximity platforms and included wearable technology into their strategy plans, diving into their consumers’ dwindling health needs and accompanying them through them. They are invested into making their online and physical experiences very seamless, targeting their customers’ convenience at all times. 35
Since Whole Foods’ affinity program is so young, the amount of information it has gathered about it’s customers’ needs is very small compared to the knowledge that the competition has about theirs. Competitors have had longstanding customer loyalty programs. They understand their customers’ needs because the data they’ve collected has allowed them to gain a deeper and clear understanding of their demographics, transactions and social behavior. This has allowed them to better cater to their specific needs. Whole Foods is failing to understand it’s customers’ needs and that customer base is beginning to diminish. This has forced it to halt it’s ambitious expansion
10 years
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STEEP Social
Increasing demand of organic/natural products
Technology
Mobile Apps
Environmentally conscious consumer
Wearables that manage health and remote patient monitoring
Emergence of global middle class
End-to-end proximity platforms in retail
Mindful consuming
Affinity programs
Health conscious population
Big Data Autonomous vehicles
Preventative measures for common illnesses through alimentation
Universal commerce Transforming stores Micro-personalization in retail Frictionless checkout options in retail 37
Political
Legislators demand transparency in food safety
STEEP Economic
Retail goes from big stores to small stores
Environmental
Pesticides, GMO’s and antibiotics in food products will increase
The Health Economy Online retail sales reach $4.3 Trillion
Programs for the efficient use of resources Programs for waste reduction
Mexico, Poland, Turkey, Egypt, Nigeria, South Africa, Thailand, Vietnam, Philippines will play a strong role in the global economy
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Urban agriculture
Driving Forces Retail goes from big stores to small stores
MORE SIGNIFICANT Online retail sales $4.3 Trillion
Increasing demand of organic/natural products
Wearables The Health Economy
Frictionless checkout Big Data options in retail
Climate change: Loss of agricultural production
Pesticides, GMO’s and antibiotics in food products will increase
CERTAIN
Efficient use of resources
Preventative measures Emergence of global for common illnesses through alimentation middle class
Environmentally conscious consumer
Mindful consuming
Micro-personalization in retail
Legislators demand transparency in organization’s financial data
Universal Commerce
Health conscious population Autonomous vehicles
Transforming stores
Waste reduction
UNCERTAIN
Mobile Apps
Affinity programs
LESS SIGNIFICANT
Social Technological Economic Environmental Political
Link Diagrams Economic Driving Forces
Primary
Secondary
Online retail sales will reach $4.3 Trillion
Uncertain
Certain
Online retail sales will reach $4.3 Trillion
Significant
Insignificant
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Link Diagrams Environmental Driving
Primary
Secondary
Efficient use of resources
Uncertain
Certain
Waste reduction
Uncertain
Certain
Efficient use of resources
Significant
Insignificant
Waste reduction
Significant
Insignificant
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Link Diagrams Political Driving Forces
Primary
Secondary
Legislators demand transparency in organizations’ financial data
Uncertain
Certain
Legislators demand transparency in organizations’ financial data
Significant
Insignificant
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Link Diagrams Social Driving Forces Preventative measures for common illnesses through alimentation
Primary
Secondary
Uncertain
Certain
Mindful consuming
Uncertain
Certain
Health conscious population
Uncertain
Certain
Environmentally conscious consumer
Uncertain
Certain
Preventative measures for common illnesses through alimentation
Significant
Insignificant
Mindful consuming
Significant
Insignificant
Health conscious population
Significant
Insignificant
Environmentally conscious consumer
Significant
Insignificant
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Link Diagrams Technology Driving Forces
Primary
Secondary
Micro-personalization in retail
Uncertain
Certain
Universal Commerce
Uncertain
Certain
Transforming stores
Uncertain
Certain
Frictionless checkout options in retail
Uncertain
Certain
Autonomous vehicles
Uncertain
Certain
Micro-personalization in retail
Significant
Insignificant
Universal Commerce
Significant
Insignificant
Transforming stores
Significant
Insignificant
Frictionless checkout options in retail
Significant
Insignificant
Autonomous vehicles
Significant
Insignificant
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SCENARIO LOGIC
UNSUSTAINABLE
In a pickle
TECHNOLOGICAL
Salt of the earth
ENVIRONMENTAL
LOW
Reaping what you sow
SUSTAINABLE 45
HIGH
Don’t have a cow
CAUSE + EFFECT DIAGRAM Cause Effect
Universal Commerce
Transforming stores
Micro-personalization in retail
Drone delivery, anticipation of intent, access to better information to make purchasing decisions,
Investment in remodeling stores
Shoppers engage with products touch, see, smell and test them through augmented reality technologies, live demos, teaching events, and displays.
Technological
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Waste reduction
Europe will reduce waste by 50% with the help of the UN. Climate change could ease, water and fuel use would decrease.
Environmental
SWOT: 10 YEARS Strengths America’s definition of luxury is changing (Millennials) Traceability Debt free expansion, doubling stock value (1200 Stores in the US)
Implications Belong in that new definition of luxury. Not only tell... show consumers where the products they buy come from. Close the gap even more.
Weaknesses Micro-personalization in retail. Frictionless checkout options for retail stores.
Implications Create programs to catch up with consumer data collection in order to personalize their experience.
Opportunities
Threats
New economic leaders: Mexico, Poland, Turkey, Egypt, Nigeria, South Africa, Thailand, Vietnam, Philippines.
Retail trends: From big stores to smaller stores. Competition moving into WF new market strategy. Climate change will continue to deteriorate at a fast pace.
Online retail sales will reach $4.3 trillion dollars.
Implications
The Health Economy. Emergence of a global middle class.
Loss of agricultural production. Find new ways to keep local production of food.
Wearables to manage health. Universal commerce.
Implications Explore new markets. Enter the online retail sale market Create a link between wearables and products offered in store.
Economic
Technological
Political
Social
Environmental
PLOT: Don’t have a cow
technological - ENVIRONMENTAL
Turning point
WF develops programs to help it’s suppliers meet their water supply needs by providing a water management infrastructure where waste is minimum.
Rising action
WF introduces nutrigenomics program, matching food to customers’ specific personal metabolism. WF expands it’s Total Health Immersion program to the general public, specially those in it’s affinity program.
falling action
Whole Foods has caught up with advances in technology and is using them actively in it’s store. Not only has WF established a strong e-commerce platform, it is also working towards installing frictionless checkout in it’s stores and making use of customer micro personalization.
WF tries to overcome the impact that the data breach had on it’s customers’ trust to use the technology platforms. Customers flee to competitors’ programs because they feel safer sharing their information with them.
Competition starts to create transforming stores, WF is surprised by this, and is now behind on this aspect. It has began it’s expansion plans in Latin America, where countries are experiencing economic growth and the demand of food products and more healthier choices is growing.
The farming population is aging, causing some supplier farms to close or being sold after the owners retire. WF starts programs to get younger generations interested in farming
Setup The world has seen an exponential growth in technology advancements. There is a very big potential for these new technologies to be applied in retail.
Conclusion
WF promotes urban agriculture and community supported agriculture programs, preparing itself for times where it’s suppliers won’t be able to meet WF’s demand need, and creating jobs for people in the different communities where their stores are located.
Meanwhile, extreme climate change is affecting agriculture systems and in turn the food supply chain. There is a need for a better water management infrastructure. Cities have seen urban agriculture growth.
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PLOT: in a pickle
technological - ENVIRONMENTAL
Turning point
WF’s suppliers are encountering problems with their water supply. Some of them are having trouble meeting WF’s product demand. Competition starts to include frictionless checkout, and micro personalization in their retail stores. Making their physical and online experience seamless.
Rising action
falling action
Whole Foods has steadily attempted to catch up with advances in technology. It has now managed to develop it’s e-commerce platform and thanks to it’s partnership with grocery delivery systems it is able to cater to some of it’s customers’ needs.
WF starts to apply the use of wearable devices in it’s stores to help improve it’s customers’ experience. WF experiences a breach of privacy and it’s customers’ personal data is compromised.
It is looking to expand operations to Latin America, where countries are experiencing economic growth and the demand of food products and more healthier choices is growing.
Setup
Conclusion
The world has seen an exponential growth in technology advancements. There is a very big potential for these new technologies to be applied in retail.
WF tries to overcome the impact that the data breach had on it’s customers’ trust to use the technology platforms. Customers flee to competitors’ programs because they feel safer sharing their information with them.
Meanwhile, extreme climate change is affecting agriculture systems and in turn the food supply chain. There is a need for a better water management infrastructure.
WF opens operations in a few Latin American countries
49
don’t have a cow
technological - ENVIRONMENTAL
Smart decisions to overcome adversity in a fast pace changing world
50
The world has seen an exponential growth in technology advancements. There is a very big potential for these new technologies to be applied in retail, from autonomous vehicles for delivery services, wearables for tracking health and to use with proximity platforms, to universal commerce and frictionless checkout options. Meanwhile, extreme climate change is affecting agriculture systems and in turn the food supply chain. There is a need for a better water management infrastructure. As a result of the increasing demand for food products, people have resorted to use urban agriculture to grow their own produce. In terms of population, people are starting to live longer lives. This has lead to an increasing older population that has different health needs. These health needs are the result of a lifetime of bad eating habits, and leading sedentary lifestyles. 51
Because of this, Whole Foods finds in them a niche for growth. Catering to their health problems, it introduces programs in which they are taught how to alleviate and better manage their illnesses through wellness. Seeing the success of this initiative, Whole Foods decides to introduce a nutrigenomics program, where it helps matching exact food types to a customers’ specific personal metabolism, in turn, this helps them find products that their bodies will assimilate best and contribute to bettering their general organisms and ultimately their quality of life. Whole Foods has caught up with advances in technology and is using them actively in it’s store. Not only has Whole Foods established a strong e-commerce platform, it is also working towards installing frictionless checkout in its stores and making use of customer micro personalization by implementing the data that it has collected through the affiliate program. 52
Competitors like Wal-Mart and Target start to create transforming stores, where they serve multipurposes for customers depending on the time of day. Whole Foods is surprised by this, and has now fallen behind on this aspect. Whole Foods has also began its expansion plans in Latin America, where countries are experiencing economic growth and the demand of food products and more healthier choices is growing. Seeing the effects that water scarcity is having in product distribution, and the ability to meet the need of customers’ demand, Whole Foods decides to partner up with its suppliers to develop programs to help them 53
meet their water supply needs by providing a water management infrastructure where waste is minimum and sustainability is a priority. Whole Foods expands it’s Total Health Immersion program, which has only been available to it’s employees, to the general public, specifically to those customers in it’s affinity program. This programs is looking to provide a week long camp that focuses on teaching consumers about the benefits of a healthy lifestyle. Another factor that worries Whole Foods is that the farming population is aging,
causing some of it’s supplier farms to close or be sold after their owners retire. Not only are farmers retiring and reaching their life expectancy, but the farming know-how is being lost. Whole Foods then decides to start subsidizing education programs targeted to young entrepreneurs, so the younger generation gets interested in farming. Seeing how the environment will continue to change, and how everyday it will become more and more difficult for all of it’s suppliers to meet their produce quota in all of it’s locations, Whole Foods decides to take preventative measures and promotes 54
urban agriculture and community supported agriculture programs. By doing this, not only is Whole Foods preparing for the future, but it is also creating jobs for people within the different communities where their stores are located and forging stronger bonds with them.
Don’t have a cow Implications
Creating incentives for people to join the urban agriculture program. Teaching people that have no idea about farming, how to immerse themselves in urban farming. How can Whole Foods really differentiate itself from competitors to take possession over the new market niche of the older population?
55
in a pickle
technological - ENVIRONMENTAL
Security breaches, environmental draught and agricultural scarceness put Whole Foods in trouble
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The world has seen an exponential growth in technology advancements. There is a very big potential for these new technologies to be applied in retail: autonomous vehicles for delivery services, wearables for monitoring health and to be used with proximity platforms, universal commerce and frictionless checkout options. Meanwhile, in the environment front, extreme climate change is affecting agriculture systems and in turn the food supply chain. Drought has affected farming crops and accessibility to water is becoming more and more difficult. Because of this there is a incremental need for a better water management infrastructure, not only for farming, but for cities as well. Whole Foods has steadily attempted to catch up with innovation in technology. It has now fully developed it’s e-commerce platform. Customers are able to order 57
products online and merge their physical in-store experiences with their digital ones. Analysing the data it has collected from it’s affinity program, Whole Foods has refined its vision of its customers’ needs and has started to create plans to tackle them. Thanks to Whole Foods’ partnership with grocery delivery systems it is able to cater to customers’ increasing need of shopping convenience and immediacy, they don’t have the time to go shopping for groceries, but they want to purchase healthier food choices. Whole Foods is looking to expand operations to Latin America, where countries are experiencing economic growth and the demand of organic food products and more healthier choices is increasingly growing at a rapid pace. Now that more people have the possibility of accessing these kinds of products, expanding to countries in South America is a more viable business venture. Whole Foods will have to start it’s education 58
minute they can save shopping is point to their favor. Frictionless checkout allows for this. Customers are walking out of the stores without having to go to a cashier and stand in line to pay for their purchases. The payment system is automatic, it detects Whole Foods’ suppliers are encountering all the products a customer has in their problems with their water supply. Water is becoming more scarce world wide. Because shopping cart and handles the payment as they walk out of the store, customers of this, some of Whole Foods’ suppliers are having trouble trying to meeting Whole don’t even have to take out their wallets anymore. Foods’ product demand and even more worrisome, their high quality standards, As a response to these innovative services which is the most important aspect that that the competition has put into effect, Whole Foods looks for. Whole Foods starts to integrate the use of wearable devices in its stores to with the Competition starts to include frictionless checkout, and micro-personalization in their intent to improve it’s customers’ experience retail stores. These two innovative programs and at the same time, help them to find ways in which their health needs can be makes their customers’ physical and met by suggesting products that could help online experience seamless. They know their dietary necessities. exactly what each consumer is interested in, and show them specific products, sales, During this time, due to Whole Foods’ and services that are targeted just for urgency to catch up with it’s competitors, them. They also understand that today’s customers lead a fast paced life, and every mistakes in it’s online platform are made, phase again, and create trust with this new market segment that has different views of the world, and a completely different set of customs and cultural traditions.
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security is compromised and it experiences a breach of privacy and it’s customers’ personal health data, that was collected from wearable devices, is exposed. A scandal erupts, customers are infuriated, and this occurrence taints Whole Foods’ reputation. Whole Food quickly tries to overcome the impact that the data breach had on it’s customers’ trust to use the technology platforms, but some of it’s customers have fled to competitors’ programs because they feel safer sharing their information with them. 60
In a pickle Implications Whole Foods must stive to gain back it’s customers’ trust. In a world where devices that carry all of a person’s most private information security is key. Whole Foods must find a way to help it’s suppliers with their environmental issues so both can benefit.
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20 years
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STEEP Social
Aging population Hispanics will be 31% US population Health conscious population
Technology
Wearables that manage health and remote patient monitoring End-to-end proximity platforms in retail
Mindful consuming Universal commerce
Mega-cities By 2050 60 year olds will make up 21% of th world’s population Changing health needs of the population
Transforming stores Micro-personalization in retail Frictionless checkout options in retail Augmenting reality
Rapid urbanization 8.3 Billion people in the world
Asia to surpass Europe and US No country will be a Hegemonic power Diffusion of power
Autonomous vehicles Environmentally conscious consumer
Political
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STEEP Economic
Global economy linked to developing world
Environmental
Programs for the efficient use of resources
The Health Economy
Programs for waste reduction
Shift of economic power to East and South
Urban agriculture
Colombia, Indonesia, Nigeria, South Africa and Turkey, very important in global economy Major global economic crisis
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Extreme climate change, severity of weather will intensify Demand for food, water and energy will grow, due to increase in population
Driving Forces
MORE SIGNIFICANT
Health conscious The Health Aging Waste reduction population EconomyPopulation Mega-cities Extreme climate Mindful Wearables change consuming Hispanics 31% US population
Europe and US Global economy linked to developing world Diffusion of Power
Environmentally conscious consumer
Increase in demand of food, water and energy Transforming stores
Micro-personalization in retail Efficient use of resources Asia surpasses
Virtual E-commerce
Urban Agriculture
CERTAIN
UNCERTAIN
Autonomous vehicles
LESS SIGNIFICANT
Social Technological Economic Environmental Political
Link Diagrams Economic Driving Forces
Primary
Secondary
Global economy linked to developing world
Uncertain
Certain
Global economy linked to developing world
Significant
Insignificant
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Link Diagrams Environmental Driving
Primary
Secondary
Efficient use of resources
Uncertain
Certain
Waste reduction
Uncertain
Certain
Urban Agriculture
Uncertain
Certain
Efficient use of resources
Significant
Insignificant
Waste reduction
Significant
Insignificant
Urban Agriculture
Significant
Insignificant
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Link Diagrams Political Driving Forces
Primary
Secondary
Asia surpasses Europe and US
Uncertain
Certain
Diffusion of Power
Uncertain
Certain
Asia surpasses Europe and US
Significant
Insignificant
Diffusion of Power
Significant
Insignificant
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Link Diagrams Social Driving Forces Mindful consuming
Primary
Secondary
Uncertain
Certain
Uncertain
Certain
Uncertain
Certain
Uncertain
Certain
Mindful consuming
Significant
Insignificant
Health conscious population
Significant
Insignificant
Environmentally conscious consumer
Significant
Insignificant
Significant
Insignificant
Health conscious population Environmentally conscious consumer Mega-cities
Mega-cities
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Link Diagrams Technology Driving Forces
Primary
Secondary
Micro-personalization in retail
Uncertain
Certain
Micro-personalization in retail
Significant
Insignificant
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SCENARIO LOGIC
UNSUSTAINABLE
The last straw
Blame it on the rain
In season
ENVIRONMENTAL
ECONOMIC
PROSPEROUS
SUSTAINABLE 71
DESTITUTE
Cool as a cucumber
CAUSE + EFFECT DIAGRAM Cause
Effect
Global economy linked to developing world Exploration of new markets where people now have the economic power to consume what they couldn’t before. Companies must now target new cultures.
Urban Agriculture Food security despite inclement climate change. Self sufficient cities
Efficient use of resources If Europe is using resources efficiently: saving €60 on oil and gas. Generating 600,000 new jobs. For those who don’t use resources efficiently: Global competition for natural resources will intensify and put pressure on the environment
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Environmental
SWOT: 20 YEARS Strengths
Weaknesses
There will be 41 Mega-cities in 2035, Whole Food’s expansion plan has already included new stores in some of those cities. It has also developed a plan for smaller cities.
Augmenting reality and Universal Commerce.
Hispanic population will make up 31% of the US population.
Severity of weather will intensify.
Implications
Shift of economic power to the East and South. Global economy linked to developing world. Colombia, Indonesia, Nigeria, South Africa and Turkey among the most important players in the global economy.
Areas that are affected by weather conditions will have to look for the closest product supplier to fulfill stores’ needs
Changing health needs of the population. Implications Continue to expand smaller stores to unexplored areas in Mega-cities. Consider the using technology to supply the need of those areas. Consider how can WF be linked to patient’s treatments.
WF will have to catch up in the technology front. Making the physical and virtual shopping experience seamless.
Opportunities
Threats Implications
Demand for food, water and energy will increase due to increase in population. Implications Target Hispanic consumer with more organic products that appeal their culture Explore new markets in the East and South Economic
Technological
Political
Social
Environmental
PLOT: Blame it on the rain
economic - ENVIRONMENTAL
Turning point WF’s sustainable operations in megacities have been truncated by the lack of these programs.
Rising action
falling action
Megacities are a challenge for local governments. Establishing programs for waste disposal and transportation have proven difficult and achieving sustainability in these cities has been nearly impossible.
Despite it’s efforts to use urban agriculture as a way to overcome the scarcity in food supply from it’s vendors, city policies and water control regulations, restrict WF from producing large scale amounts of produce to meet it’s customers’ demands.
Setup
Conclusion
Asia, South America and Africa are experiencing a prosperous time. Consumers are even more aware of the benefits of healthy eating and are willing to go the distance to pay for healthier food choices.
Locally grown product has become more and more difficult to produce and WF is forced to go against one of it’s core values and start importing organic produce from countries where the environmental conditions allow for these kinds of produce to grow.
Weather is inclement, water is scarce and food is limited.
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PLOT: The last straw
economic - ENVIRONMENTAL
Turning point Farming goes from family activity to a professional, knowledgedriven economic activity, WF supports programs to allow young entrepreneurs to receive education.
Rising action
falling action
WF has taken precautions and turned to urban agriculture, thanks to the rapid growth and apparition of megacities. Products are produced locally, and costs in transportation and delivery are cut down.
Despite economic crisis, consumers are willing to pay more for healthy food, specially those in the South and in Asia, where the economic landscape is better than in the US.
Because of it’s early adoption of using sustainable programs WF remains safe when it comes to energy and water resources.
Setup
Conclusion
The world is undergoing a major global crisis. Population has increased at a rapid rate, and there is an ever growing elderly population. The average needs of these consumers have changed.
WF has resorted to closing many of it’s flagship stores and resourced only to online retail, and augmented reality to simulate the shopping experience.
Increasing demand for food and water caused by decreasing availability of land that can be agriculturally productive.
The economic landscape is dark, but the need for healthy products is strong and rising.
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Blame it on the rain economic - ENVIRONMENTAL
Operating in megacities in a prosperous economy but in an unsustainable environtment
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Asia, South America and Africa are experiencing a prosperous time, and following it previous plans of expansion, Whole Foods now has operations in every country of every single continent. Focusing on it’s customers from these three regions, Whole Foods sees prosperity in the midst of a very concerning global landscape. Consumers are even more aware of the benefits of healthy eating and are willing to go the distance to pay for healthier food choices. Weather continues to be inclement, and water is more scarce and in result, access to food has become more and more limited. The world has seen how 41 Megacities have emerged, and they are placing a challenge for local governments in a variety of matters, the most concerning ones are health, sustainability and mobility. Establishing programs for waste disposal and transportation have proven difficult 77
and achieving sustainability in these cities has been nearly impossible. Whole Foods’ sustainable operations in megacities have been truncated by the lack of these programs. Getting waste out of it’s stores and carrying on it’s recycling programs has been proved to be difficult and Whole Foods has seen how it’s once excellent and steady sustainable practices start to decrease. Megacities have allowed Whole Foods to initially open up tiny, but still high quality, retail stores in many locations. This, paired up with autonomous vehicles, and it’s e-commerce platform allows Whole Foods to try and reach every customer through delivery systems. Despite it’s efforts to use urban agriculture 78
as a way to overcome the scarcity in food supply from it’s vendors, new city policies and water control regulations restrict Whole Foods from producing large scale amount of produce to meet its customers’ demands in cities where these resources are extremely scarce. Locally grown produce has become more and more difficult to produce and Whole Foods is forced to initially make the prices of them higher, and then, when that proved to be too straining for it’s customers, Whole Foods is forced to take extreme measures and go against one of it’s core values and start importing organic produce from countries where the environmental conditions allow for these kinds of produce to grow.
Blame it on the rain Implications Consider resorting to only small luxury “convenience store” retail fronts, cutting cost of operation of large Big Box stores. Establishing new waste management programs that can work within megacities’ busy and conglomarated areas.
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The last straw
economic - ENVIRONMENTAL
When a destitute economy and an unsustainable environment collide, there’s little to do.
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The world is undergoing a major global crisis. Population has exponentially increased at a rapid rate, and there is an ever growing elder population that continues to increase as people now tend to live longer than before. Still, health illnesses, particularly diet related ones, affect a great percentage of the world population. The average needs of these consumers has shifted, and they are looking for ways to either cope with their illnesses or make radical changes in their lives to see improvement and healing. Whole Foods sees as it’s competitors put into action wellness plans for the older population, and how it has become a constant competition between them to see how one can be better than the other. They try to surpass each other in the most efficient, and cost effective way. There is a constant fight for that market segment. Because of the major economic and environmental crisis that the world is going through, Whole Foods’ prices have gone 81
up, while it’s competitors’ prices remain less expensive and more accessible for consumers.
Because of it’s early adoption of using sustainable programs Whole Foods remains safe when it comes to energy.
Traditional farming methods have drained the soil of its natural nutrients from years and years of using unsustainable practices. In return, this vast amount of soil is no longer agriculturally productive. The land that is agriculturally productive is very scarce, cannot meet the demand of production, and is also affected by the inclement weather conditions.
Farming has gone from being a family inherited activity that passed down generation to generation, to becoming a professional activity, that is driven by people that have the knowledge on how to practice it.
Whole Foods has taken precautions and turned to urban agriculture, thanks to the rapid growth and apparition of megacities it thinks this is a viable solution for it’s availability issues. Products are produced locally, and costs in transportation and delivery are cut down.
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Despite Whole Foods’ preventative measures, produce produced at urban farms are still not enough. Whole Foods has resorted to closing many of it’s flagship stores and resourced only to online retail, and augmented reality to simulate the shopping experience. The economic landscape is dark, but the need for healthy products is strong and rising.
The last straw Implications Whole Foods must consider if it is worth it to sacrifice some of it’s core values to survive in the dwindling economy. To cut down costs, Whole Foods should maybe consider closing all the big retail fronts and put all it’s efforts into the digital platform.
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