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Tuesday, October 27, 2020

Amazon Made a Mistake with Whole Foods?

In Bob Herbold's blog, a strategic error by Amazon acquiring whole foods?   Used to go to these, not much anymore.    Yes, can see the 'cultlike' tag for its customers.   Does that not work in a pandemic?

Amazon: A Rare Strategic Mistake?

Whole Foods’ first store opened in 1978 in Austin, Texas.   National expansion began in earnest in 1984 and it has grown to 500 stores in North America.    In October of 2017 it was acquired by Amazon. Whole Foods’ amazing growth was due to three points of differentiation that it used to attract its unique customer set:

Natural Organic Foods – Whole Foods was the first and only USDA Certified Organic food chain, and customers were taught that what is good for them is foods free of chemicals, artificial colors or flavors, preservatives, etc.  It basically put organic on the map!

Regional Distinctive Items – Local Whole Foods managers were encouraged to stock in their stores small local/regional brands that were very distinctive, matched the natural/organic/fresh positioning, and had very high profit margins. 

Discriminating Customers – They developed a cultlike reputation of being the store for the educated, upscale, health-conscious customer.

A lot has changed in the marketplace since the Amazon acquisition, and the Whole Foods business is currently suffering.  Here are the key reasons:   ..." 

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