Why Amazon Bought Whole Foods: To Beat Walmart

Why did Amazon buy Whole Foods? To beat Walmart in the war for the on-demand grocery shopper.

As announced June 16, Amazon and Whole Foods have agreed that Amazon will acquire Whole Foods Market for $42 per share in an all-cash transaction valued at approximately $13.7 billion. Whole Foods will operate under its own name. The acquisition will give Amazon ownership of 460 stores in the United States, Canada, and the United Kingdom as well as Whole Food’s built-in ecosystems of customers and suppliers.

Amazon’s expansion into brick-and-mortar grocery industry is well known (as is the company’s general encroachment into offline retail.) To date, Amazon’s strategy has been to build and pilot its own stores. So why would Amazon buy a chain of grocery stores rather than develop its own? I believe Walmart is forcing Amazon to accelerate its expansion.

Chronology of a Retail War

As I have blogged, Amazon and Walmart are in an intense fight to own the future of retail, including the $600 billion grocery industry. Both businesses are racing to win loyalty from the on-demand consumer who expects a frictionless buying experience both online and in the store:

  • Amazon has been piloting its own models for using physical stores to provide on-demand grocery services, examples being the launch of Amazon Go and Amazon Fresh Pickup. Amazon Go is supposed to provide a completely frictionless buying experience via physical self-service grocery stores where anyone with an Amazon account, a supported smartphone, and the Amazon Go app can simply take what they want from the store and leave with no check-out required. With AmazonFresh Pickup, customers can order groceries online and have their orders ready for pick-up at designated AmazonFresh Pickup physical locations — in as little as 15 minutes.
  • Walmart has been making moves of its own, some of which are aimed directly at the grocery-buying experience. In 2015 the company launched Walmart Pay, which shoppers use on their mobile devices to purchase goods in-store. In 2016, Walmart’s began piloting Pickup and Fuel concept stores, where customers order online and then drive to Walmart to have their groceries loaded into their cars by employees. These developments have occurred in context of Walmart developing a stronger way to battle Amazon by developing its own ecommerce business and to gain more efficiency through its offline infrastructure. For instance, in 2016, Walmart purchased hot ecommerce company Jet.com. In 2017, Walmart announced it has been testing a service whereby Walmart employees deliver packages to customers on their way home, which raises the possibility that employees could also deliver groceries.

Both Amazon and Walmart are in a strong position to win the war for the future of Continue reading

Three Essential Elements of a Writing Style Guide


Photo source: Wikipedia

Your brand has a publishing style even if you don’t realize it. The Whole Foods Whole Story blog is personal and conversational. The Red Bull Bullevard strives to be punchy and cheeky. I was recently reminded of the importance of style when I read “Holy Writ,” a passionate The New Yorker article about copy editing and writing from Mary Norris, who has been a query proofreader at the magazine for more than 20 years. Her article underscores the power that words retain in the era of Snapchat and Instagram.

With knowing, often wry prose, Norris reflects on a career in which she has checked the work of many esteemed The New Yorker authors, such as John McPhee, whose writing was so immaculate that reviewing his work was a breeze. She also reflects on the niggling quirks of modern-day writing that continue to cause debate and consternation among anyone who cares about words — such as whether a house style should permit or eschew the serial comma, or the third comma in a series.

She falls squarely in the camp of serial comma supporters. “I’ve gotten used to the way it looks,” she writes. “It gives starch to the prose, and can be very effective. If a sentence were a picket fence, the serial commas would be posts at regular intervals.”

I agree. When I was in journalism school, I glumly went along with the prevailing journalistic style of omitting the serial comma even though the missing third comma forced my writing along faster than I wanted. But the moment I graduated from college and went to work for a book publisher, I practically clicked my heels as I fled to the comforting embrace of the serial comma, The Chicago Manual of Style as my witness. Years later, I would also stop using two spaces after the period when the common style of the digital world took root — a decision that made me feel like Mad Men’s Roger Sterling growing sideburns and wearing a plaid jacket as the 1960s gave way to the ’70s.

There was a time when an article like Norris’s would have appealed to writers and copy editors of a distinct literary set — the tweed-jacket-wearing “professionals” who, like me, earned their stripes mastering The Associated Press Stylebook or The Chicago Manual of Style while gaining degrees in journalism and English en route to careers in journalism or book publishing.

But those days are long gone. A whole new breed of publisher has emerged — the brand that creates its own ideas and the everyday citizen who blogs. As a result, an article such as “Holy Writ” has a wider, and more diverse, audience: the blogger serious about relying on writing to create a one-person brand; the chief content officer in a Fortune 500 company; or perhaps an ex-journalist who writes white papers and blog posts for a corporation. The brands that are really serious about acting like big-time publishers realize they have an obligation to their writers (whether in-house or freelance) to guide them with an understanding of their business’s own house style.

I have had the good fortune to work with some of those businesses to create style guides that are every bit as important to their brands as The Chicago Manual of Style remains today for book publishers. In my experience, a good style guide goes beyond addressing questions such as the way possessives should be treated. A corporate style guide should show writers how to be engaging, answer usage questions, and identify common mistakes that can mar good writing. Here is what I mean:

  • Show how to be engaging: a style guide should spell out the elements of engaging writing, such as sharing relevant ideas and asserting a point of view. More experienced writers might not need this kind of guidance, but many corporate writers will require it, especially if they are just dipping their toes in the world of blogging. Coaching writers on engaging writing also means rallying them around a desired writing style. Is your brand authoritative and academic like Harvard Business Review, or edgy like Vice? In defining the writing style, your guide should provide insight into your audience: who they are, how they think, and how your writing should connect with them.
  • Answer usage questions: usage covers the mechanics of writing, including word choice, terminology, capitalization, and punctuation (including the all-important call about the serial comma). Some brand publishers simply defer to an outside resource such as The Associated Press Stylebook for all usage questions, but sooner or later you will find some crucial ruling in someone else’s style manual that just doesn’t feel correct for your own brand.
  • Discourage writing demons: here is where language nerds have a chance to call out every sin of bad writing that they have endured throughout their lives, such as mistaking its for it’s or incorrectly writing comprised of. An effective style guide collects the most common writing demons and casts them into a purgatory where all corporate bloggers and Website writers are forbidden to enter. But a writing demons section should not come across like the stern scold of a schoolmarm. A style guide should help writers, not browbeat them.

A style guide will yield many benefits. Less experienced writers will understand how to write better prose and avoid writing demons. All writers, whatever their level of experience, will appreciate receiving ground rules about your corporate brand style. Editors will have a tool to help them guide the judgment calls they need to make.

Moreover, your employees will be on the same page when they represent your brand with words. Your corporate blog will benefit from a reasonable amount of brand style consistency even as your writers develop their own individual voices. Most importantly, your audience will benefit by reading consistently good writing from your brand.

If you have yet to create a corporate style guide, why not start now?

The New CEO Job Requirement: Social Media


The sad results are in: 70 percent of all CEOs have no presence on social networks. And John Mackey of Whole Foods is the only CEO of a Fortune 500 firm who maintains his own blog — yeah, the same John Mackey who stepped in it by comparing Obamacare to facism in an interview with NPR. Hey: it’s time for CEOs to rethink their approach to social — or should I say get an approach since I doubt they think about social very much. Social media is a job requirement for the CEO.

In 2012, George Colony, CEO of Forrester Research (and an excellent blogger), delivered a presentation about why CEOs don’t use social media, and the reasons apply today: a general aversion to risk, lack of time, a generational bias against social, and the existence of regulatory constraints (as Netflix CEO Reed Hastings recently reminded us). Those constraints are understandable — but CEOs need to get over them. The fact is, CEOs need social media. Social helps CEOs better understand their market, their customers, their employees, and their own brands. Even better, social can help CEOs run their companies more effectively. An IBM study says that brands without social CEOs are less competitive, and according to Social Media Today, eight out of 10 employees want to work for social CEOs.

Recently, I sat down with Jermaine Dupri, to discuss how social media helps him be a better CEO of So So Def Recordings. As you might know, Dupri blew up the So So Def Recordings website and replaced it with his own social media community, Global 14. Dupri and I published the outcome of our conversation as a byline in Fast Company, available here. The byline discusses five ways social helps him run So So Def, an example being the way Global 14 gives him insight into up-and-coming musical talent. We also cite other CEOs who use social media effectively, such as Richard Branson, whose use of platforms like Twitter humanizes the Virgin brand.

If you are a CEO (or aspire to operate at that level), I hope our byline helps you embrace social, even if all you have time for is the occasional tweet. Just don’t blow off social.

Are consumers really in control?

A musician named Dave Carroll becomes a YouTube sensation by singing about how United Airlines broke his guitar. The Whole Foods brand suffers a blow amid a consumer boycott fueled by social media.  Just the usual signs that consumers are in control, right?

I don’t think so.  And I don’t believe consumers want to be “in control,” either.

We’ve all heard (and told) the same story.  Social media have empowered consumers.  With Twitter, we can publicly shame the restaurant that gives us bad service.  Through blogs and platforms like Facebook, we can rely on our friends and peers to learn about new products without involving the voice of the brand itself.

But I believe there’s a difference between consumers becoming empowered and consumers taking control.  And although word-of-mouth marketing remains the most powerful form of endorsement, I think it’s a stretch to say consumers want to shut out brands completely.  Consider the following:

  • If consumers were really in control, Dave Carroll would not be a news sensation.  His “United Breaks Guitars” YouTube video would be the norm.  But his experience is the exception to the rule.
  • If consumers were really in control, we’d see a huge improvement in notoriously customer-service challenged industries.  But we have not.
  • If consumers wanted to shut out brands, we would not so willingly allow consumer products like iPhones and Blackberries to turn us into a society of inveterate text messengers and screen tappers.  We would not happily participate in their marketing, like the fans at Comic-Con who engaged in a massive scavenger hunts to find teaser trailers for Warner Brothers’s The Dark Knight in 2007, and for Disney’s Tron Legacy in 2009.

As a consumer, I love the fact that I can complain about my Comcast bill on Twitter and receive a rapid response from Comcast Cares.  But you know what?  Although consumers like empowerment, I believe we do not want the responsibility of being in control.  We want a relationship with brands, which means we accept the fact that both the brand and consumer exert influence.  We want companies to delight us with new products and services, and we will gladly pay them to do that.  We want to watch new ads on the Super Bowl.  We want to have fun with in-store and digital experiences.  Nearly 3.5 million of us have become fans of Dell, JetBlue, and Zappos on Twitter.  (Whole Foods, boycott or not, has 1.2 million Twitter followers and has done many things to impress consumers.)  Another 1.4 million consumers have become members of the Victoria’s Secret PINK Page (and are proud to post pictures of their favorite PINK clothing).

The difference between empowerment and control is more than a matter of semantics.  In a world of consumer empowerment, marketers still matter very much, and so do the “old” forms of brand building.  In fact, a recently released report by my employer Razorfish (Fluent: The Razorfish Social Influence Marketing Report) says that when making purchasing decisions, consumers are more likely to trust television ads than online friends.

But on the other hand, consumer empowerment is real, and woe to the marketer who fails to understand that reality.  As Fluent also points out, marketers could help themselves by more effectively employing the same social media and user-generated content tools that consumers are using — hard to pull off, but, according to Forrester Research, worth trying.  Forrester says that 73 percent of online Americans are consuming social media, which Forrester cites as a harbinger for marketers.  Writes Forrester analyst Josh Bernoff, “Marketers, if you’re not doing social technology applications now, you’re officially behind.”

Well put.  There’s a reason why my Razorfish colleague Shiv Singh coined the term “Social Influence Marketing” as opposed to “social media.”  Social Influence Marketing says that marketers can and should employ social influencers and social media to meet their marketing and business objectives.  In other words, marketers can be empowered by social media and influencers, too.  Marketers just need to act wisely by incorporating social into broader forms of marketing, not tossing out the playbook completely — and by creating enjoyable consumer experiences and products that are as compelling as their advertisements.

Consumers will cede “control” to a brand that delights them in an authentic way.

PS: Dave Carroll has become something of a Social Influence Marketer himself. He now has versions of his “United Breaks Guitars” songs and video available for purchase online.

Zappos, Shaq, Whole Foods, Twitter, and you

On June 15 I was privileged to be a speaker at the O’Reilly Twitter Boot Camp (#OTBC) along with luminaries such as Tony Hsieh, Steve Rubel, Tim O’Reilly and Eric T. Peterson.  The purpose of the event was to swap insights on employing Twitter for business use.  Topics ranged from measuring Twitter’s value to integrating Twitter into a marketing and PR program.  Here are some ideas that resonated for me:

  • Tony Hsieh, CEO of Zappos, described Zappos’s employee Twitter policy this way: “Just be real and use your best judgment.”  Incidentally, Tony also dangled the possibility that 20 years from now, Zappos could diversify into more businesses — even airlines — because Zappos is about obsessive customer service, not just shoes and other consumer goods.
  • Eric T. Peterson and Mike Volpe covered Twitter measurement tools. Mike shared the HubSpot Twitter Grader, which you can use to measure your reach in the Twitter universe.  Eric shared the Twitalyzer for assessing your Twitter influence.  These tools are easy to use.  Check them out.  Eric T. Peterson: “Measure your return on influence, not your ROI.”
  • Amy Martin gave a peek inside the world of Shaquille O’Neal’s justly famous the_real_shaq Twitter account, which has 1.3 million followers (Amy herself has nearly 500,000 followers).  If you enjoy following Shaq on Twitter, thank Amy — she got him to do it.  And how hard was it?  Getting started was not that difficult, as it turns out.  Amy just needed to get Shaq plugged into Twitter and set him loose.  He quickly gathered a following because of his authenticity. (Amy: “Shaq has zero ability to fake anything.  He’s transparent and genuine.”)  After a few months, Amy collaborated with Shaq on an idea: what if he used Twitter to give the world more than his ideas and random observations?  The result: “random acts of Shaqness,” in which Shaq uses Twitter to do good deeds for fans such as offering free tickets to basketball games.   At a time when celebrities are carefully protected from the public, the concept is quite stunning, actually. If you’re lucky enough to catch the right tweet from Shaq at the right time, you stand a good chance of meeting him at, say, a food court, where you can pick up a free ticket.  We can learn a lot from this example.  Per Amy: “Don’t ask what Twitter can do for you.  Ask what you can do for Twitter.”  Amen.
  • Marla Erwin of Whole Foods discussed how Whole Foods uses Twitter to be responsive to customers and build the Whole Foods brand.  She also cleverly demonstrated her point by offering Whole Foods gift cards to boot camp attendees who could generate the most retweets about Whole Foods during the event — a nice way to generate consumer enthusiasm.  Marla also dispelled the notion that consumers just want to talk to each other about your brand on Twitter rather than talk with you.  She asked, “If people don’t want to interact with a brand, then why are 786,000 people following Whole Foods on Twitter?”

Marketers: even in an era of consumer-generated content, your message does matter and consumers do care about you. It’s just that marketers need to share their messages in a different way.  To cite a popular — but true — cliche, we must join the conversation that consumers are having about us. And we need to empower our brands to do things, not just say things.  Marla’s nifty contest during the O’Reilly Twitter Boot Camp was a case in point.

One of the benefits of appearing at the event was receiving the recently published The Twitter Book by Tim O’Reilly and Sarah Milstein.  The book is like Strunk & White for Twitter: a summation of practical tips for communicating clearly and effectively in the Twitter universe.  I highly recommend it even if you consider yourself an experienced pro. Brushing up on your Twitter etiquette never hurts.

Incidentally, you can find my O’Reilly Boot Camp presentation, “Twitter: The Two-Edged Sword,” here.