May 25, 2011MTKG 540: Advertising and Promotions

Stephanie, Manuela, Alissa, Suma, and Heather

MARCOM OWNED EXPERIENCE STRATEGY

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The Challenge

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Form a coherent, integrated digital strategy that:

Promotes growthCommunicates Whole Foods’ unique selling proposition Advances the company’s repositioning

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Current MarCom Snapshot

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Whole Foods is...

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Comprehensive Website

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Mobile Strategy

• Recipes• Store locator • Nutrition info • Shopping list

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Integrated Social Media

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300+ niche accounts: global updates (corporate), topical tweets (cheese, wine and beer, recipes), metro areas (13 major cities), and individual stores (298 as of 5/1)

Recipes, contests, health tips and company news, 567,657 likes. 250+ individual store fan pages focus on community events, sample times, vendor partnerships, special pricing and ticket sales for local events of interest

72,162 views, 421 uploads and 2,358 subscribersReal employees, Supplier stories, Recipes.

8,348 items and 174 sets

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Email Marketing

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SEO Strategy

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Community Giving

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Music Discovery & Film Festivals

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Partnership with Top Chef

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Social Media

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Evaluating Current Tactics

Strengths• Extensive and appropriate use

of digital media

• Deliberate and specific targeting

• Consistent messaging

Weaknesses• No comprehensive platform or

program to pull together the variety of digital tactics

• Inability to link online efforts with purchase behavior and revenue

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The Strategy

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Whole Foodies Membership Program

Loyalty + Online Membership Program

• Links online activities to actual in-store purchases• Unites existing digital activities and magnifies their value

Not a discount card

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Tying it all Together

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Loyalty + Online Membership

Program

EmailCommunity

Support

In-store Purchases

Social Media

Events

Mobile

Website

Music & Arts

Track all purchases & provide recommendations based on individuals’ preferences

• Budget analysis – “Smart Shopping”• Nutrition analysis – “Healthy Shopping”• Social responsibility analysis – “Responsible Shopping”

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Membership Program: Features

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Opt out of paper receipts

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Membership Program: Features

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Personalized meal planning

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Membership Program: Features

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Integrate with existing features – shopping lists, recipes, etc.

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Membership Program: Features

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Local events and promotions updates based on “preferred store” settings

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Membership Program: Features

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Contribution to social media, blogs, and forums – encourage communication

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Membership Program: Features

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35%

20%13%

13%

9%9%

EMBRACERS

CONSCIONABLES

EXPEDIENTSEPICURIANS

EXPERIENTIALS

CORGANICS

Slide from Natural Marketing Institute’s Whole Foods Shopper Segmentation Study, February 2007

Whole Foods Shopper Segments

We care about what you care about: healthy, sustainable, and delicious food that fits your lifestyle

and your budget.

Sign up for a Whole Foodies membership online or in stores—we’ll provide the tools you need to achieve your goals.

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Messaging Concept

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• 60% of customers hear about membership programs in-store

• Utilize existing channels to promote program:• In-store displays• Cashiers explain program• Email newsletters• Website banners• Social media

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Promoting the Program

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Whole Foodies

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Promoting the Program

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Weekly AdSign up to receive your weekly ad by email

BudgetingTrack your Whole Foods purchases.

Local Events & SpecialsSee what’s happening at your Whole Foods store

Digital ReceiptsOpt out of paper receipts and help reduce waste

Shopping Lists Create and save your shopping lists

Nutrition & Sustainability Track what you eat and where it came from.

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Program Goals

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Whole Foods Goals How does our strategy address this goal?

Enhance the shopping experience for our

customers

Personalized recommendations, ease of repurchases, relevant education, empowers customers

Reach customers in new ways

Novel concept, pull in community experts, followers and customers, relevant tools at relevant times.

Advance our strategic focus on natural, healthy foods

Its all about the food…more details, total transparency, info from experts, voice to the best customers

Provide a fluid and integrated experience

between the store and the website

The missing link…Increases frequency of trips and basket size from current customers and attracts new customers

Attract and maintain the loyalty of our customers

Empowers all customers, differentiates Whole Foods, and encourages exclusivity

#1. To communicate Whole Foods’ unique brand and selling proposition

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Program Goals

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Whole Foods Goals How does our strategy address this goal?

Enhance the shopping experience for our

customers

Personalized recommendations, ease of repurchases, relevant education, empowers customer

Reach customers in new ways

Pull in community experts, followers and customers from where they already are online. Give relevant tools at relevant times.

Advance our strategic focus on natural, healthy foods

Its all about the food…more details, total transparency, info from experts, voice to best customers

Provide a fluid and integrated experience

between the store and the website

The missing link…Increases frequency of trips and basket size from current customers and attracts new customers

Attract and maintain the loyalty of our customers

Empowers all customers, differentiates Whole Foods, encourages exclusivity

#2. To advance Whole Foods’ repositioning: Back to Basics

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Program Goals

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Whole Foods Goals How does our strategy address this goal?

Enhance the shopping experience for our

customers

Personalized recommendations, ease of repurchases, relevant education, empowers customers

Reach customers in new ways

Pull in community experts, followers and customers from where they already are online. Give relevant tools at relevant times.

Advance our strategic focus on natural, healthy foods

Its all about the food…more details, total transparency, info from experts, voice to the best customers

Provide a fluid and integrated experience

between the store and the website

The missing link…Increases frequency of trips and basket size from current customers.

Attract and maintain the loyalty of our customers

Empowers all customers, differentiates Whole Foods, encourages exclusivity

#3. To promote growth and drive revenue

Goal Metric for MeasurementGrowth from current in-store only customers

• membership numbers pre- and post- program• online activity trends• online activity per age of member• pre- and post- membership spend

Growth from all current customers • average spend per member vs non-member • average spend per trip per member vs non-member• time between trips per member vs non-member• purchase trends

Attracting new customers • membership rates• blog and forum activity

Retain budget conscious customers • membership % of “budget-conscious”• survey feedback• blog and forum activity• purchase activity

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Key Performance Indicators

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Track all metrics daily and analyze and review trends weekly. Create Customer Evangelists to provide regular feedback and employ a Loyalty Manager to convert those to strategic

recommendations. Track on P/L.

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Program Budget

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Whole Foodie Loyalty Program BudgetCosts Description and Assumptions Total (in 000s)

Technologycustomizations to current CRM and POS tracking system, new hardware and analytics software 800$

Data Storageongoing costs for privacy, security, and archiving of customer data 160$

Staff1 Loyalty Manager, 3 data analysts, 1 new IT architect, additional developers/engineers 750$

Communications

internal communications, cashier and customer service training, in-store displays and print, website content revision 250$

Rewards quarterly "surprise" gifts for members 300$

Revenue Sources Description and Assumptions Total (in 000s)Increased Customer Retention

assume improving customer retention by 10% leads to additional revenue of 0.05% 45,000$

Increased Basket Sizeassume $5 average increase in basket size for 25% of "best" customers = increase of 5% 450,000$

Increased Purchase Frequency

assume 2 extra trips/yr for 25% of "best customers" = increase of 2% 180,000$

New Customer Acquisition assume average annual spend of $60/trip 43,200$ Purchasing and Procurement Synergies assume 0.25% revenue increase 22,500$

Customer Service Synergies assume 0.25% revenue increase 22,500$ Marketing and Marketing Research Syneries assume 0.5% revenue increase 45,000$

initial investment 800$ total recurring costs 1,460$ total recurring revenue 808,200$ incremental revenue from program 806,740$

Conservative Forecasts For Revenue Increases • 5% for increased basket

size• 2% for increased trip

frequency• 1% for realized synergies• Just under 0.05% for new

customer acquisition• 0.05% for increased

customer retentionTotal: 9% revenue increase

Alternatives

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Option 1: Pickup

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Option 2: Delivery

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Option 3: Educational Kiosks

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Option 4: CSA Partnerships

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• All have been done in limited locations

• Not scalable across stores

• Additional tactics, not a strategy

vs.

Whole Foodies Membership Program

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Conclusion

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Why Razorfish?

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Loyalty + Online

Membership Program

Email

Community Support

In-store Purchases

Social MediaEvents

Mobile

Website

Music & Arts

Technology in Sync• Analytics• Technology Architecture &

Development• Email & CRM (Atlas)

• Advertising & Branding• Interaction Design• Social Influence Marketing• Search Marketing

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Questions and Discussion

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Appendix – Exhibits

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EMBRACERS 35%

Represents the “typical” WFM Shopper. Holds core values on health, importance of natural/organic, LOHAS issues and finds specialty/gourmet products and food experiences important. Been shopping WFM the longest and buys many different products and categories.

CONSCIONABLES 20%

Embodies the core values and behaviors of the original WFM Shopper. Strong focus on organics and LOHAS issues. WFM’s social/environmental consciousness are a driving force. Frequent shoppers who spend the largest proportion of monthly grocery bill at WFM. Skews younger, female, less affluent, more liberal minded.

CORGANICS 13%

Strong organic orientation and shop WFM because they execute the organic mindset. Believers in the importance of healthy foods, and concerned about what is in food they eat and how it’s made. Frequent shoppers and big spenders. Skews female, households with kids.

EXPERIENTIALS 13%

All about the experience. This segment strives for unique and fun food experiences. They primarily buy produce and specialty/gourmet items; not particularly organic oriented. They are infrequent shoppers who aren’t heavy spenders. Profile is older, more traditional, with higher income.

EXPEDIENTS 9%

Convenience is key. They are not drawn to WFM because of its organic orientation, values, or specific product offerings, but simply because of its proximity. Few “regular” purchases; generally buy produce, prepared foods and a myriad of other items. Tend to be higher income males.

EPICURIANS 9%Driven to WFM primarily because of the specialty/gourmet offerings and are not particularly organic or LOHAS-minded. Infrequent shoppers who spend less compared to other segments. Are older, highly educated, retired.

WFM Shopper Segmentation Summary Descriptors

(% of all WFM Shoppers)

Slide from Natural Marketing Institute’s Whole Foods Shopper Segmentation Study, February 2007

EMBRACERS:

Largest segment, shop for many diverse reasons.

Opportunities to increase sales across multiple areas

and various product categories.

Each Segment Offers Unique Marketing Opportunities

CONSCIONABLES:

Core WFM Shopper. Continue to appeal to their inherent values and

WFM’s traditional product offerings, especially natural/organic, locally-

sourced, basic grocery items (including store brands). Personal care and

supplements also offer opportunities.

EXPEDIENTS:Regular “stop & shop” consumers…merchandise regularly used

grocery items and prepared foods for increased sales. Opportunity to market store brand and value priced grocery items – they are

least tolerant of prices.

EPICURIANS:

Specialty/gourmet are core purchases. Continually offer new, unique products with emphasis on

gourmet food experiences.

EXPERIENTIALS:

Want to shop in an inspiring & distinctive environment for new, unique and interesting foods. Keep store and

products innovative and fresh to maintain interest.

CORGANICS:

Healthy living, pure food, organics are key drivers for

this group. Stress WFM’s commitment to these

issues. Opp’y for grocery items, frozen foods, PC,

supplements.

Slide from Natural Marketing Institute’s Whole Foods Shopper Segmentation Study, February 2007