Will arugula and tattoos go together in Whole Foods’ new concept?
Whole Foods is looking to broaden the appeal of its new 365 concept by making space available within its stores for complementary businesses that appeal to Millennials.
According to Whole Foods’ Friends of 365 website, these businesses — which could include body care products, fashion, food and drinks, record shops and tattoo parlors — will “bring their special mojo” to the new stores.
Whole Foods is looking for both start-ups and established businesses to take space within the 365 stores or their patios that have values and standards that align with its own. In the end, Friends will need to be “hip and cool for sure.”
In keeping with its goal of attracting Millennials, the Friends of 365 site includes a crowdsourcing element with videos from businesses seeking space in Whole Foods’ new concept. While the voting has finished, the site said it would invite up to 20 businesses to its headquarters in Austin to make a pitch for why their businesses make sense in the new stores.
Back in July, Whole Foods announced it had signed five leases for the new concept in Bellevue, WA; Houston, TX; Portland, OR; Santa Monica, CA and the Silver Lake neighborhood of Los Angeles. This month it announced signing five new leases in Evergreen Park, Illinois; Gainesville, Florida; and Concord, Claremont and Los Alamitos, California, bringing its current total to 13. Whole Foods plans to have 10 stores open before October of 2017.
“We have assembled an amazing team of people who have been working tirelessly to create an innovative shopping experience that will appeal to new and existing Whole Foods Market customers,” said Jeff Turnas, president of 365 by Whole Foods Market. “We are all eagerly awaiting the opportunity to introduce 365 by Whole Foods Market with the opening of our first store in Los Angeles in [May] just over 100 days.”
- Friends of 365 – 365 by Whole Foods Market
- Whole Foods Market announces five additional 365 by Whole Foods Market store locations – Whole Foods Market
- Millennial-focused Whole Foods 365 shops could include tattoo parlors – USA Today
- Will ‘365 by Whole Foods’ spell trouble for Trader Joe’s? – RetailWire
- Whole Foods announces plans for new value-price concept – RetailWire
- The Votes Are In – Friends of 365
Discussion Questions
DISCUSSION QUESTIONS: Do you think the Friends of 365 store-within-a-store concept will be helpful in attracting Millennials to Whole Foods’ new concept stores? Are there categories of businesses that you think will work/not work as Friends of 365?
Poll
BrainTrust
Zel Bianco
President, founder and CEO Interactive Edge
Lee Peterson
EVP Thought Leadership, Marketing, WD Partners
When I asked my Millennial daughter about this she rolled her eyes. I think this is a case of people reading trend articles about Millennials and creating a concept based on that without really going out and asking them what they think about it.
Whole Foods does a good job of bringing in local items — they should continue to do that. But while some may stop to browse for records while grocery shopping I can’t imagine many would stop to get a tattoo.
So what would attract more Millennials to Whole Foods? According to my daughter, “easier to navigate aisles, shorter lines, and more reasonable prices.”
The Friends of 365’s store-within-a-store concept allows Whole Foods to accomplish several things. First it allows the company to lower its net cost per square foot because it can collect rent from its tenants. This in turn allows it to have a bigger facility than it might otherwise. Should the 365 concept work out and the Friends program not, then it has a space it can expand into fairly easily. Then there is the mutual ability of both 365 and its partners to sell to the others’ traffic.
Some of the items mentioned seem to be naturals. However, while Millennials might be into tattoos, I see mentioning them to be more of publicity stunt. Finally, is this the episode where they meet Ross’s new girlfriend?
This is a great concept. The hard part is figuring out what are the right kinds of businesses to pull under the umbrella. If they can create the right array of “magnets ” to attract, retain and develop the right customers (i.e., high CLV), this can be an unbeatable strategy. But they have to avoid the temptation to focus too much on the products/services, per se, instead of the value of the customers who buy them.
I like the idea. Assuming that all Millennials are not like Zel’s daughter, it should fly … the older Millennials, not the younger ones.
Is this the latest trend? To essentially sell out your store as a mini-mall? Shoehorning such an odd selection of products dilutes the message of what the brand stands for. I think this is a big miss. … Cough, cough … Ron Johnson.
OK I’m laughing out loud. The whole point of tattoos, especially for young people, is to go to a questionable and slightly ratty tattoo shop with friends and look sufficiently “outsider” and daringly unique when they come out. I may be wrong about this, but I highly doubt it if telling your buds you got the tats at Whole Foods will fit the desired image. 🙂
It sounds like with Millennials heavily on the brain Whole Foods is going down the same hopeful but likely futile path as Macy’s One Below. Unfortunately, most Millennials view both Whole Foods and Macy’s as fogey stores that most of them cannot afford. Having a store-within-a-store or a few Millennial-oriented magnet businesses co-located is not going to change that larger perception.
Licensees within stores is far from new to retail establishments. The concept presents opportunities to build “community,” which is important to Millennials.
Like the concept of body care products, healthcare connections, entertainment offerings, experiences to share, tech support, etc. As a Boomer, I still hold the view that decorating your body with tats is a personal decision. If I want to see Dennis Rodman, perhaps I’d visit the store, but I don’t see it as a weekly stop. Millennials may see it differently — and I promise to keep listening to them, as they are 78 million strong, and they will be guiding trends over the next 30-plus years.
Store-within-a-store concept will help, but they really have to be careful trying to “crowd source” because trying to be hip and cool by committee doesn’t work. Somehow the idea of businesses pitching to Whole Foods at their HQ sounds almost Reality TVish — “Whole Foods Shark Tank”? The tattoo parlor idea for me sounds more a publicity stunt.
Whole Foods is not stupid and they will not do anything to portray a low-class image. I think Zel Bianco’s daughter is more in tune than the press.
I look at Whole Foods and I see a company than has more sales and nearly double the sales per square foot of the weaker also-ran competitors such as Sprouts, The Fresh Market, Earth Fare, Lucky’s and Fresh Thyme. I predict at some point in the future one or more of the above will throw in the towel and be acquired by Whole Foods. Just like when they bought the troubled Wild Oats stores. I would also guess Whole Foods has more profit than all those also-ran competitors put together. Whole Foods does about $700,000 per store with several over a million per week. None of those also-rans can say that. Trader Joe’s is about the only one that can beat them on sales per square foot, but is still about $200,000 per week behind Whole Foods in sales per unit.
In my opinion Whole Foods could care less what is said about them in the financial pages. They have never been a company that is all about the next quarterly report. In a way they are like Walmart, they like to fake a limp now and then to sucker their competitors into over-investing and over-expanding, in a sophisticated and complex game of cat and mouse.
For what it’s worth, for awhile I have been thinking that supermarkets and public markets could put aside some space for convenience services — dry cleaners, shoe repair, package preparation, maybe a copy machine — that are logical add-ons to a grocery shopping trip and would help people save time.
About 365, I think their sweet spot is urban grocery with a focus on prepared foods, adding the meal kit option maybe, like the Ahold Everything Fresh and Bfresh concepts, the Yummy Market in Southern California, etc.
There probably isn’t a huge market for it though. And adding tattoo parlors, etc., is a distraction. While CarMax still exists, it didn’t help Circuit City stay in business.
Although again it would be a distraction, they could support “pop-up retail” boutique/Etsy kind of stuff as an attractor, like how mixed-use centers do heavy promotion and events programming. An example at a small scale would be Maketto in D.C.; at a larger scale, the way that Edens programs “Union Market” in D.C. or the Mosaic District in Fairfax County, Virginia.
It won’t help that much though for 365, as those activities are more about generating experiences. It’s not clear that people buy much other than food to consume right then.
The store-within-a-store is a great concept and should work for Whole Foods as long as they pick the right partners. Tattoos? Not!
I could see them spinning their 365 store into a healthy parlor of sorts, where Millennials will come to hang out as well as peruse some other healthy yet interesting choices. That could be a win-win.
For my 2 cents.
Love it. Good thinking and something department and box stores should’ve thought about long ago. Urban Outfitters already opened a store in Brooklyn called Space 98 that is exactly this idea. And it’s working (Urban Outfitters is the #1 retailer of vinyl records).
Physical stores need to become much more than “stuff on a shelf” in order to keep people coming in. These ideas that seem so media worthy now are going to become commonplace to the survivors of the online onslaught. You’re either a social playground or a fulfillment center (or both, preferably) going forward.
We have an expression here: “The closer you are to a warehouse, the closer you are to getting wiped out by a better one: Amazon.” Sounds like Whole Foods’ 365 is not going to be a warehouse.
I think the key will be finding add-ons that attract one group without alienating another (or devoting so much space/money to a fringe group that everyone else feels slighted). I don’t think Millennials can really be so completely stereotyped that tattoo shops and seaweed butter offer a panacea.
Absolutely, as long as they pay attention to what Millennials want by offering unique sub stores and products. Not completely sold on the tattoo shops, but I love the thinking and innovativeness. Could be gold with the right mix of concepts. It will most certainly increase time spent in a store which is always a good thing. They have done an amazing job with the craft beer bar in Whole Foods, I have found myself there with friends just to check out the beer selection or just to hang out and have one while I wait for traffic to die down.
We are a company that is paying very close to the millennials and try to adapt to their needs. Haha…we are the Millennial generation. We understand the numbers and power they bring.