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Hi, Kevin Coupe here, and this is FaceTime with the Content Guy. I'm reporting to you this morning from the new 365 by Whole Foods store in Lake Oswego, Oregon, the second store under this banner that has been opened by the company.
In promoting the 365 concept, Whole Foods has talked about it being lower priced than its traditional stores ... with a greater use of technology ... a tighter focus on private label ... and more limited SKU count ... all of which it hoped would add up to stronger appeal to millennials and other folks put off by its "whole paycheck" image.
After having spent some time in the store, I can tell you that I'd probably give it a C+ ... or, as Mrs. Content Guy, a third grade teacher, would put it, "definitely needs improvement."
One of my concerns about the format, at least from how it has been described, was that it would derivative rather than differentiated, and I'm sorry to say that this version, at least, bears out those fears. While it is an attractive store, with high ceilings and warm colors, it also sort of feels like Costco and Trader Joe's got together and had a baby. The shelving feels like it was stolen from Trader Joe's warehouse, and the frozen food coffin cases are right out of the Trader Joe's playbook, except that they sort of obscure the product rather than highlighting it.
There are some nice touches, like a cold room in the produce section - again, right out of the Costco playbook - and a good use of electronic signage. Except that the electronic signage works against the low-price image, and there is a startling lack of price-oriented signs throughout the store. The prices may be good, but also may not be - the limited assortment makes it hard to determine. But bananas selling for 19 cents apiece - and organic bananas selling for 29 cents apiece - certainly doesn't strike me as cheap.
There's also a ton of labor, despite the fact that service departments are at a minimum ... and you'd think that labor is one place where they could save money. But maybe that's because the store is new, or because John Mackey and Walter Robb happen to be here this morning.
While I like some of the technology, some of it seems awkward. There is a tablet computer in the wine department that allows you to scan s wine label so you can get more information - but the information largely consists of short reviews mostly by people who are largely unidentified. I don;t know who they are, or what their taste in wine is. And the technology doesn't even answer what often is the most important question when it comes to wine - what food does it go with? Another cardinal sin in the wine department - they appear to have more California pinots than Oregon pinots. That's just not cool.
Listen, this is early in the 365 development process, so it is impossible to accurately judge where this format will take the company. That's especially true because - and I've talked to some vendors about this, and they agree - this particular 365 seems like a work in process.
And to be fair, I did talk to some customers who think this is a refreshing addition to the community's shopping options. Some say the salad bar is great, and the burger bar seemed to be getting some action... My summer class at Portland State University has as an assignment visiting this store and writing about it. They're all millennials, so I'll let you know down the road what they think.
365 by Whole Foods ... derivative rather than differentiated, and needing improvement.
That's what is on my mind this morning, and as always, I want to hear what is on your mind.
- KC's View: