Whole Foods Is Making 6 Major Changes To Improve Business
Associated PressA worker restocks cream cheese at a Whole Foods in Woodmere Village, Ohio.Sterne Agee just downgraded shares of Whole Foods Market.
The company has been struggling as grocers like Wal-Mart and Kroger ramp up organic offerings and specialty assortments.
Analyst Chuck Grom said he could no longer recommend the company and changed his rating from buy to neutral. Shares have fallen 33% in the past year.
Grom notes that Whole Foods is making some key changes to lure back customers.
Here are some changes the grocery chain is making to improve business.
Yahoo! FinanceWhole Foods shares over the past year.
1. Apple Pay
Whole Foods is going to adopt Apple Pay, which is supposed to make mobile payments more convenient and secure. People with newer-model iPhones and the iWatch will be able to use the mobile payment system. As an early adopter of the technology, Whole Foods could convert Apple-friendly customers.
2. Instacart Delivery Service
Whole Foods recently announced a partnership with Instacart in 15 cities, allowing the company to deliver groceries in just an hour. Customers can also buy a yearlong membership for free delivery on orders over $35. Whole Foods will be adding the delivery service in 13 additional U.S. cities this year. Grom believes this will help the company attract younger customers.
InstacartInstacart offers delivery in as little as 1 hour.
3. WFM Wine Club
Whole Foods is partnering with Wine.com for the club. "The subscription program will begin on October 1, enabling club members to receive four shipments of six bottles each year, priced at $125 per shipment, including shipping costs," Grom writes. "The six wines, sent on a quarterly basis, will be curated by global wine buyer Doug Bell and Master Sommelier Devon Broglie."
4. New Mobile App
Whole Foods' current app, which mainly features recipes, is largely ineffective, according to Grom. The company plans to release an improved app that is expected to incorporate loyalty rewards, order-ahead, and Apple Pay.
appstorm.netWhole Foods is overhauling its app.
5. Marketing Campaign
In October, Whole Foods will unveil a national marketing campaign for the first time in the company's history, according to Grom. The campaign will include television, internet, mobile, and social ads.
The campaign will "educate consumers on product quality and their options in the marketplace, while also helping to differentiate Whole Foods from some of its competitors," Grom said.
6. Loyalty Program
Whole Foods is currently testing a loyalty rewards program in New Jersey, with plans to roll out nationally by 2015. The loyalty program is necessary because it could give shoppers an incentive to go to Whole Foods over competitors.