It seems that Amazon not only bought a retail store but a new lunch spot. According to a new analysis by PlaceIQ, which uses location data, Whole Foods is seen as a “grab-and-go” spot for lunch or dinner versus a place to fill a week’s worth of groceries for a family.
The company analyzed the time of day each grocer sees the majority of their overall daily traffic and found that Whole Foods receives the most traffic during lunch, 12% more than any other time of day. That's different from some traditional grocers, such as Kroger, which sees a traffic spike around 5:00 p.m.
It seems consumers are investing more time and money into Whole Foods as well. The data shows that Whole Foods shoppers are willing to travel the farthest to buy in-store—an average of 5.51 miles, as opposed to Kroger, where customers tend to opt for convenience, traveling an average of 3.4 miles. Trader Joe’s customers fall somewhere in the middle, willing to travel an average of 4.85 miles to shop in-store.
Although consumers are willing to travel further, they don’t frequent Whole Foods as often as other grocers. For example, Kroger shoppers are 58% likely to return on a weekly basis, while Whole Foods shoppers are only 10% likely.
According to PlaceIQ's senior VP of strategy, Drew Breunig, the data points to four big determinants about Whole Foods customers:
- Whole Foods shoppers are well off and urban
- Whole Foods is a grocery store and a lunch restaurant
- Customers invest travel time as well as money to shop at Whole Foods
- Whole Foods shoppers shop at other grocers
"Amazon has addressed its weaknesses in perishable goods by picking up a retailer with an affluent customer base, that serves a multifunction role for its customers, and commands time as well as monetary investment," Breunig told FierceRetail. "But the most worrying aspect of this deal for competitive grocers is the last bullet: Many of their customers currently shop at Whole Foods. If Amazon brings its standard aggressive pricing to Whole Foods, they might convert the store from an occasional destination to a weekly routine."
With the help of Amazon's more affordable pricing and last-minute delivery, more and more consumers may drop other weekly shopping trips and make Whole Foods their primary grocer.
"To make a mark on the grocery industry Amazon doesn’t have to win new customers, just better optimize the ones Whole Foods already has," he added.
On the flip side, Amazon will still have some challenges to face. The biggest one will be that Whole Foods still has a much smaller footprint than a lot of traditional grocers.
"They still aren’t the store that’s around the corner for America, like the Krogers of the world. They aren’t a neighborhood market yet. They've got great locations for their audience, but not the footprint," Breunig said.