The news broke last week that Whole Foods wants to tap into the biggest market there is: the 80 million millennials with $200 billion buying power, according to Forbes. The Austin-based supermarket chain will do this by opening a new concept in the fall of 2016 that will offer "a convenient, transparent, and values-oriented experience geared towards millennial shoppers," said Whole Foods' co-CEO John Mackey in a statement.
What the organic foods supermarket has found is that one of the fallouts from the Great Recession has been that millennials are more price conscious than previously thought. At least, that's what the Washington Post argues in their latest article about it.
Other consequences of the Great Recession have been that millennials have postponed many of the defining events that make up adulthood, such as buying a car, buying a house, getting married and having a family. This means that there are more single millennial households who don't need as many groceries as a family of three.
But what can we as insurers, financial advisors and retirement experts learn from the big chain? Let's take a look at what Whole Foods really is.
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More than a supermarket, Whole Foods sells the appeal of "community" and "wholesomeness." It markets organic foods in environmentally-friendly, upscale stores.
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It's no secret that this supermarket's prices are on the spendy side, hence the nickname "Whole Paycheck."
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Their stores are usually located in or near upscale neighborhoods.
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Consumers know that they're paying for the "Whole Foods" experience — and they were gladly paying it, until now.
Maybe five years ago, you weren't able to find the huge roster of healthy, organic, gluten-free, non-GMO products anywhere else but at Whole Foods. Even Sprouts, a less-expensive specialty grocery store with stores in the southern and western states of the U.S., didn't offer the same kind of products that their pricier competitor did. Again, that was five years ago. Apparently, things can change dramatically in five years for any industry …
Given the widespread push to eat healthier and organic, consumers are now willing to pay more for these types of foods. Other chains have taken notice and started adding organic food aisles and healthy foods to their own supermarkets. Now, you can basically find the same products for less money at Kroger and Walmart, or even stores that aren't supermarkets, such as Walgreens and Rite Aid.
So, let's add it up:
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More single millennials equals less food and other needs for items in the household.
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Millennials are still struggling to find good-paying jobs, which means they have less disposable income.
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Millennials are still paying student loan debt, which leaves them with less disposable income.
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Because of the above, millennials are price-conscious.
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Millennials are picky about their food (and most everything).
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Millennials expect great quality at a cheap price.
So, what is missing from the Whole Foods formula? Maybe company transparency; cheaper prices (obviously); a down-to-earth atmosphere; providing an experience that integrates the Internet and mobile devices, and that invites millennials to be their brand ambassadors, since that's the way millennials "appreciate" marketing.
