AUSTIN, TX - Whole Foods has annouced this week that it will be adopting a customer loyalty rewards program by the end of 2015. This decision has come as a suprise to many, considering the fact that the company had resisted adopting just such a program for much of the previous three decades. In light of this shift in policy, industry insiders are understandably asking: what caused this change?
Bloomberg suggests that the explanation may lay with the increasing competition Whole Foods is facing from other retailers, like Wal-Mart and Kroger. These retailers are expanding their selections into the natural foods category, one which Whole Foods formerly enjoyed a near monopoly over.
This increased competition has taken its toll on the retailer. Whole Foods' stock has fallen 35% so far this year, in comparison to a 7.3% gain for the S&P 500, according to Bloomberg.
Executives at Whole Foods however remain confident that this slump will prove to be just a blip on the radar as the company evolves in order to facilitate future growth in this changing consumer market. The announcement of this loyalty program, which is currently undergoing tests in Princeton and, later this month, Philadelphia, is just one aspect of this initiative.
AndNowUKnow covered Whole Foods' announcement of its first national marketing campaign this past July. More recently, the retailer revealed that it will be one of the first companies to jump onboard Apple's innovative Apple Pay system.
“Our customers are going to love the convenience of Apple Pay, which will bring a faster, easier, more secure and private way to make purchases at Whole Foods Market,” shared Co-CEO Walter Robb, in a press release. “We’re committed to providing innovative new choices and conveniences for our customers, and the ability to buy groceries with just a simple touch of a finger elevates convenience to a whole new level.”
Whether it's taking a tried and true concept like a loyalty program or embracing innovation with new technologies like Apple Pay, Whole Foods has recognized that if it wants to retain its lofty position at the forefront of the incredibly competitive retail industry, its approach will have to be multifaceted. Only time will tell how successful the program will be, but I for one certainly wouldn't be one to bet against this retailer.
As of 1:04pm EST, Whole Foods' stock was trading at $38.20/share, a 1.68% increase during the day's trading.
Stay tuned to AndNowUKnow for future updates on Whole Foods and the retail industry as a whole.
