Whole Foods made headlines with its recent announcement introducing a chain of stores to attract and serve the mysterious millennial generation.
Stock prices suffered, and media coverage has been largely negative as analysts and industry insiders debate whether this approach will hit home with 18- to 34-year-old consumers.
One motivating factor was the sheer size of this generation. This year millennials will overtake Baby Boomers as the nation’s largest living generation in the United States, with 75.3 million members, according to recent population projections released by the Census Bureau.
Yum, stale buzzword soup
The problem with Whole Foods’ strategy in making this proclamation lies largely in the way in which it was positioned to the public.
Few details were included in the announcement, only that these new, smaller stores will offer all-natural food at lower prices and will be tailored to this demographic segment. The stores will be “tech-savvy,” more “streamlined” in design, and “unlike any of the other stores you’re seeing out there” (whatever that means).
Whole Foods is cooking up buzzword soup, and we’re all invited to take a sip, even though it’s already a little stale.
Robyn Bolton sums it up nicely in her article for Harvard Business Review.
By describing this new concept as “geared toward millennial shoppers,” Whole Foods is essentially saying one (or both) of the following:
1. Gen X and Baby Boomer shoppers are fine with or even prefer old, cluttered stores that sell a confusing array of stuff at high prices.
2. We (Whole Foods) have to create new stores, because our current ones are old and cluttered and sell all sorts of poorly organized stuff at high prices.
At least, that’s what consumers of all generations are reading between the lines.
Stale demographic segmentation
Bolton suggests the problem here lies in a flawed, underlying segmentation approach that hinges too much on demographics alone:
“By relying on demographics to define a consumer base, executives are implicitly, or explicitly, saying that all people of a certain demographic (in this case the same age cohort) are the same and that they are also distinctly different from everyone in other demographics.”
She argues that a better way to approach this would have been to consider the “jobs to be done.”
Harvard Business School professor Clayton Christensen introduced the concept of “jobs to be done” about 12 years ago. This strategy approaches market segmentation using the deeper motivations surrounding use of a product than the traditional demographic details such as age, race, location, etc.
“By understanding consumers’ jobs, companies can identify what drives their behavior and their buying decisions—and then create offerings that resolve their most important and unsatisfied jobs,” Bolton writes.
These new stores from Whole Foods may exist to meet a variety of jobs to be done, ranging from functional to social to emotional. These jobs are not specific to the millennial generation, though, and exactly how they will be differentiated remains to be seen.
Might this announcement have fared better in consumers’ minds had Whole Foods taken a more modern approach to segmentation, or at least conveyed that message more clearly in their announcement?
Whole Foods missed an opportunity to position the new stores in a highly relevant way. Instead it went a general, irrelevant and potentially offensive route to a generation of 75 million consumers who greatly value their individuality.
Katie Martell is CMO and co-founder of Cintell. A version of this article first appeared on LinkedIn.