It’s been more than a year since Amazon acquired Whole Foods—a merger that promised to change the brand of the American specialty supermarket chain. Along with daily discounts exclusive to Amazon Prime members, more and more stores are offering pick-up lockers (AMZN.O) and free delivery for Prime customers. One of the more notable changes was last week’s first-ever Whole Foods Prime Week promotion.
Amazon launched its first Prime Day in 2015, creating buzz with its one-day global shopping event held exclusively for Prime members. This year, thanks to the Whole Foods acquisition, Prime customers not only found major discounts online, but could also take advantage of deals happening at Whole Foods locations around the country. These included a $10 store credit, large discounts on various items, and buy-one-get-one-free promotions running the week of Prime Day (July 11–17).
We wanted to look into the Whole Foods customer experience during this special event. We got some answers by using our market intelligence tool BrandGeek®—the fastest, most accurate source of behavioral data linked to customer feedback in real time. Here’s what we found out:
Whole Foods fell short on most customer satisfaction measures, including Overall Value
By analyzing data collected during Prime Week compared to data collected from the 4 weeks prior to the event (June 13–July 10), we discovered Whole Foods underperformed on Prime Week across almost all core customer satisfaction measures.
While several of these—such as Merchandise Availability and Speed of Checkout—aren’t a huge surprise due to increased traffic, a big standout is the 3-ppt drop in Overall Value. Even with the discounts offered, Whole Foods customers didn’t feel they were getting enough bang for their buck. It’s no secret the grocery chain—which specializes in organic products—has a reputation for high prices, and it appears the Prime Week discounts weren’t enough for many shoppers.
Shoppers were motivated to visit by the Prime Day promotion, which helped take visit share from competitors
The lure of savings worked on many customers. Whole Foods saw a 13-ppt increase in customers motivated to visit because of Promotion/Coupon. At the same time, Convenience of Location decreased by 6 ppts, indicating that customers were more willing to go out of their way for the special offerings.
Though Whole Foods underwhelmed on Overall Value, there were several satisfied customers who were excited about this added benefit of their Prime memberships.
This heightened motivation from Prime Day drove increased visit share as well, with Whole Foods visit share growing by 7%, luring customers from more traditional grocery brands such as Kroger and Publix.
Prime Week attracted infrequent Whole Foods customers + prompted a higher rate of conversion
The promotion was successful at bringing in new and infrequent Whole Foods shoppers. These are likely more price-conscious customers who made a visit specifically for the Prime Week offerings. Since service measure scores were lower, it will be interesting to see if Whole Foods will see an increase in return visits in the coming weeks.
Thanks to a decline in non-purchasers and a significant increase in over purchasers, Whole Foods did see a conversion rate spike during Prime Week.
This is likely due to customers saving a big chunk of change, prompting a spontaneous splurge on other items. The allocation of gift cards would also entice customers to pick up items on a whim—often spending more than the amount on the gift card.
Time will tell if Whole Foods is able to convert these one-time shoppers into loyal customers. Whole Foods’ higher price point—when compared to prices at more traditional grocery stores—could mean customers just popped in to take advantage of the promotional event. But with their offering of more specialized items, Whole Foods could have enticed people with products they can’t get elsewhere, prompting return visits.
Is Whole Foods primed for next year?
Amazon definitely had some hiccups with Prime Day—including a temporary site crash and several hours of technical glitches—but the company says it was “their biggest shopping event” ever, selling more than 100 million products purchased by Prime members during the 36-hour event. Whole Foods definitely cashed in on some of that glory, but could take steps to properly prepare for next year’s promotion. By looking at behavioral and feedback data, the brand could develop proper operational strategies to meet customer expectations.
If you’re interested in learning more about BrandGeek, check out our short video.
Derrick Cline | Customer Insights Manager