More to Segmentation than Age

Whole Foods Market announced a new chain of grocery stores aimed at younger, more price-conscious Millennials, but may have oversimplified its segmentation by overlooking the ageless ways it attracts food buyers.

Whole Foods Market announced a new chain of grocery stores aimed at younger, more price-conscious Millennials, but may have oversimplified its segmentation by overlooking the ageless ways it attracts food buyers.

No one denies we live in a segmented marketplace. But the segmentation may be a lot more complex than merely dividing us up by age, gender or geography.

As Katie Martell, writing for ragan.com, pointed out in a blog, Whole Foods Market managed to miss the demographic mark and diss other age cohorts with its announcement of a new chain of food stores designed especially for Millennials.

It is an example of oversimplifying segmentation.

Millennials are about to overtake Baby Boomers as the largest population segment, but they are hardly a monolithic group. To design a grocery store just for them may prove a tricky task.

What's interesting about Whole Foods Market is its broad appeal across demographic, geographic and even income groups. A CFM team spent an entire day at the Whole Foods Market in Seattle's University District. The diversity of customers, especially considering the relative prices for food, was astonishing. What drew people to the store – in some cases from miles away – was Whole Foods Market's  commitment to quality organic fruits, vegetables, meat and seafood.

We interviewed housewives, professionals on their lunch break, a mailman and college students. What they bought and how much they spent varied, but their reasons for coming were pretty much the same. The mailman, who drove to the store from many miles away, called it "inconvenient quality."

Several of those we interviewed joked about the chain's unofficial nickname of "Whole Paycheck." But that didn't deter them from shopping at the store.

The winning pitch our team made to provide PR for the first Whole Foods Market store in Portland was titled, "It's all about the food." Fresh. Reliably sourced. Artistically displayed. Those aren't qualities limited to an age group. They appeal to a wider span of people.

In announcing its new store concept, Whole Foods Market talked about appealing to "tech savvy" consumers and offering lower-priced products in a more streamlined store format. Being tech savvy has almost nothing to do with selectivity of what you eat. Food consumers who value an all-organic store are willing to pay a premium price, but still shop for "bargains." Many grocery stores can be ponderous, but Whole Foods Market has a format that is easy to shop and which has been widely copied by other grocers.

As a regular Whole Foods Market customer (and a non-Millennial), I see the chain's greatest challenge as remaining different as competitors emulate what it offers. We drive out of our way to buy meat and seafood at our favorite Whole Foods Market, but make another trip to a nearby New Seasons to buy produce and fruit.

The Whole Foods Market we patronize offers a "tech savvy" Instacart option, where you can call in your order and pick it up and pay for it at a designated check-out line. It's a great, convenient option, but not a substitute for personally looking at the meat and seafood counters for the freshest, most appealing choices and for seasonal specials.

So far, I've never seen anyone checking out at the Instacart line. But I've stood in line at the meat counter along with people of all ages.