Whole Foods Daily Shop May Be Amazon’s Winning Grocery Concept

Ever since Amazon purchased Whole Foods in 2017, observers, pundits, analysts, investors and the curious have wondered how Amazon would shake up the grocery business. At the time of the purchase, astute commentators opined that Amazon would treat Whole Foods as a laboratory for new grocery and retail ideas. These commentators were not wrong. Amazon has kept audiences busy with different brick-and-mortar versions of stores that combined the technology of Amazon with the behavioral psychology of retail. Up until now, Amazon-Whole Foods has not generated any innovative brick-and-mortar grocery-retail winners. 

For example, in 2016, pre-Amazon, Whole Foods tried smaller format stores, 365 by Whole Foods Market. Amazon pulled the plug on this concept after purchasing Whole Foods. To be fair, it was several years later that Whole Foods changed the purpose and promise of the 365 brand. But, the idea of an own brand store was not what customers wanted, since you could do better at Costco with Kirkland or your quirky Trader Joe’s. 

Soon after Amazon’s Whole Foods purchase, in a far-ranging interview with The Wall Street Journal, Jeff Wilke, then chief executive of worldwide consumer at Amazon, spoke about the benefits of having Whole Foods in the Amazon tent. Mr. Wilke said, “I hope we’re going to learn about how physical stores work. They (Whole Foods) know a lot about food, produce – supply chains at a very large national scale. We’re going to learn with them how we can efficiently – and in a very high-quality way – deliver groceries to our customers.” 

Since that interview, Amazon added a variety of brick-and-mortar stores to its retailing portfolio. Amazon created bookstores and self-service groceries in New York and Seattle respectively, There were Amazon 4-Star stores in New York (featuring products receiving 4-star ratings) and an Amazon Fresh grocery store in Woodland Hills, California. In 2021, there was press speculation that Amazon might even tackle the department store brick-and-mortar format.

In 2021, in the throes of Covid-19, according to an interview in Financial Times, Amazon CEO Andy Jassy indicated that Amazon was planning to “go big” in grocery. Current formats such as Amazon Fresh and Amazon Go had not been the game-changers that Amazon and observers expected.

Mr. Jassy stated that part of the problem with Amazon Fresh and Amazon Go was that many of the stores opened during the pandemic. But, at the time, some perceptive observers noted that Amazon did not yet truly understand grocery. For example, some said the focus on technological convenience, such as smart shopping carts and ‘just-walkout’ intelligence, led Amazon astray. As Financial Times pointed out, no one says they are going to the grocery store because of the smart shopping carts. Plus, there is a lot of person-to-person in a grocery store. People have questions about a lamb chop, a Cornish hen, a Dover sole or that cantaloupe melon that a smart cart cannot answer. Customers want conversations with the people behind the deli sandwich counter or the person in charge of the wine section.

Finally, now, Amazon’s-Whole Foods’ latest concept for shaking up grocery has a lot of potential that does not rely on a smart shopping cart or fast delivery. It is a concept that has longevity in France, but has not been (successfully?) attempted in the US. Amazon may be starting a new twist with convenience grocery.

Years ago, the French grocery brand-business Monoprix created a brand extension called Daily Monop. A Daily Monop store addressed the problems of: 

• What can I have for dinner that requires no work, is a French meal and is not American fast food? 
• Can I very quickly buy a French meal on my way home from work for two individuals with a glass of wine for each of us, a loaf of fresh bread, French cheese? 
• Can I find a French meal for one that I can pick up at the airport after my flight home arrives? 

Daily Monop offers a modern French meal offered in individual servings… including individual glasses of wine securely wrapped for carrying home. Daily Monop offers gracious, high quality pre-packaged meals fast. As Steve Ells, founder of Chipotle used to say about fast food: “There is nothing wrong with fast. It’s the food.” Daily Monop solves for that.

Daily Monop was enough of a successful format in the early 2000’s that even McDonald’s’ global CMO was intrigued with Daily Monop as a potential customer-perceived rival in McDonald’s competitive set. 

In the same vein, Amazon’s new idea – an Americanized version of Daily Monop – is urban-located, solving for quick-serve-trips, small footprint stores. Bloomberg indicates that these new stores will be called Whole Foods Daily Shop. “The Daily Shop will offer a similar but slimmer assortment of products ranging from fresh produce and frozen food to pre-packaged meals and Whole Foods’ 365 branded products. The locations will not have buffet bars or meat counters.” 

Whole Foods Daily Shop will have cashiers, self-checkout and Amazon One, the brand-business’ palm print payment system. The fact there will be cashiers is a sign that Amazon possibly sees that too much technology can potentially be a detraction from grocery shopping, which has always had human contact as a plus.

Considering that Amazon has been the leader in delivering items fast and same day, it is ironic that the Whole Foods and Amazon executive responsible for growth and development told Bloomberg the following,” The introduction of home delivery has changed customers’ mentality. People want things fast.” This spokesperson indicated that she had been thinking about a Whole Foods smaller footprint, convenience store for well over a decade

Meal convenience has been an American staple since the 1950s when diets were surprised by TV dinners and Pillsbury cake mixes. To overcome the fear that convenience foods might be perceived as the a low quality, easy way out of traditional cooking and baking, Pillsbury let you know that “Nothing says lovin’ like something from the oven.” It helped that kids said, “Thank you, Mom” after the slogan. Brand-businesses have been solving for ways in which to make meals easier ever since. 

In the early 2000’s, a global appliance maker tested a meal convenience concept of an oven (cooker) that could be turned on from your mobile phone. This oven would solve the problem of making dinner when you are running late at the office or due to transporting children to-and-from afternoon activities. You could be at your desk or on bleachers at a baseball field and turn on your oven. In discussions with potential customers, it became apparent that this oven was a really irrelevant concept. Customers indicated that if they were running late, they would not be cooking at all; they would be having take-away meals.

Daily Monop was a solution; the oven was not.

The gist of meals these days is that people are not actually cooking. People tend to choose food assembly. Hence, Blue Apron. Or those grocery packaged salad kits (Dole or Fresh Express) with a salad base, crunchy toppings, possibly cheese and salad dressing.  People are looking to heat and chill food that is brought home or delivered home to be served. 

The New York Times recently reported on Wonder, a new concept by Marc Lore who managed Walmart’s online business for a while after Walmart bought his jet.com business. Wonder is Mr. Lore’s vision for redefining and recalibrating eating at home or in some of the Wonder locations. Again Mr. Lore’s vision reflects the insight of Mr. Ells: it is not about the speed of the meal preparation; it is about the quality of the food. Mr. Lore wants customers to feel that the meal they are eating is high-end restaurant quality.

People continue to look for solutions to their meal occasion problems – think needs-based occasion-driven segmentation. People purchase solutions for food occasions and food portions that change every day, solving for their daily needs. 

If you do not want to cook or follow the recipes or open pre-measured packets and packages of Blue Apron, you will be focused on take-away meals. This continues to be a growing market. 

The solution for mealtimes seems to be food that is ready for me when I want it, where I want it, so that the food meets my daily changing eating requirements. This appears to be what Amazon’s Whole Foods Daily Shop is hoping to address.

Whole Foods Daily Shop, like Daily Monop, is the store as lunch box, bento box, dinner box, food hamper. And, there is hyper-proximity: Whole Foods Daily Shop, like Daily Monop, will be local, focused and nearby; in other words, where you are or will be at this moment. 

Whole Foods Daily Shop will be close. Closeness evokes “personal.” Additionally, Whole Foods Daily Shop will provide two additional benefits: modularity and mobility.

Modularity means food in individual pieces. This is partitioned food; food for sharing; food for saving. Food for now; food for later. Tastes that build on one another. There is a reason a Kit Kat bar is scored for easy partitioning. 

Mobility means food that travels with me. This traveling food is always the right temperature; always the right fit for the moment. 

Whole Foods Daily Shop may be the concept that makes its mark in grocery. Food hamper, hyper-proximity, modularity and mobility: the benefits that make meal-occasion decisions easy. Amazon certainly has the scale and scope to make this concept a reality.