Humanizing Innovation – Amazon and Whole Foods Change the Game

Posted by: Marketing | 06.30.2017

When Amazon purchased Whole Foods, it sent the business community buzzing about all the potential reasons this acquisition did and did not make sense. Regardless of your stance, one thing is for certain – Jeff Bezos has a strategy that is likely to revolutionize the way we think about purchasing groceries; but it’s so much more. If you are a major tech giant and have automated everything from checkout lines to price checking, what’s next? Humanizing innovation, perhaps?

We found the idea of improving customer experience through improved human interaction worthy of exploring, so Humach’s senior leadership team, including our CEO Tim Houlne, and several industry experts weighed in to unearth some alternative thoughts about how Whole Foods can teach Amazon about the human touch in customer experience.

“Amazon purchased 35 percent of Home Grocer in 1999, so this is not the first time they have shown interest in this industry,” said Houlne. “What is different is the merging of the high-touch customer service focus from Whole Foods and the technology-driven experience of Amazon. It’s the blending of the two business models that will be interesting.”

Paul Osborne, Director of Consumer Relations for Levi Strauss & Co., offered his insights on this seemingly unusual merging of customer philosophies.

“Amazon does a lot of things right, but I would not say they have a strong brand personality. They are great at simplifying and automating the transactional customer experience,” said Osborne. “Now they have an opportunity to focus on the personalized touch required for an operation like Whole Foods to be successful. It’s an untapped resource for Amazon who can provide a different perspective on grocery shopping as a whole, while learning more about the ideal, more human centric front-end experience.”

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The Face of Individualized Customer Experience

Houlne stated that through the robust analytics that Amazon currently has, truly understanding every step of the customer journey becomes much easier. By modeling socioeconomic patterns based on purchases of all types, from food you eat to products you buy, Amazon can complete the circle and offer up a customer centric experience.

“By having this complete picture of the customer, Amazon can more effectively serve shoppers both online and in Whole Foods,” said Houlne. “This type of data will empower the in-store team to do more by optimizing the store based on purchases and providing individualized shopping experiences.”

How will Amazon innovate the Whole Foods in-store experience? There may be some changes, including moving team members from check-out counters to personal shoppers.

“The ability for Amazon to empower food delivery with the backing of Whole Foods’ knowledge creates a model that really focuses on the individual customer,” said Houlne. “By redeploying team members into positions that focus on human knowledge and understanding and automating the rest, they can cut costs and provide great customer experiences.”

Houlne believes one possibility is that the personal shopper model improves the individualized experience. These team members will have the ability to interact with customers both inside and out of the store, providing ideas and suggestions via email, mobile app or face-to-face interaction. Meanwhile, Amazon can maximize technology to change the in-store experience to become more personalized. While in the store, a customer can receive alerts for items on sale they normally buy, suggestions for new items in alignment with their purchase history, and notifications on specials and sales.

“The empowering of humans through technology simply gives a much better customer experience, either on-line or in-store,” said Houlne. “That personal, face-to-face service is what Whole Foods brings to the table – the human touch. Amazon’s focus in the past has been more technology oriented, so together they provide a more robust, more personal, experience.”

Amazon - Rounding Out Their Intellectual Capital

Tom Asher, Senior Vice President of Customer Engagement at Humach, reflected that Amazon’s Jeff Bezos always has a strategy, and we can be certain that the Whole Foods acquisition will showcase part of the adaptation Amazon needs to bring to its current brand.

“The leadership team at Amazon is smart enough to broaden their tent. Much like with the Zappos acquisition, Jeff Bezos is smart enough to make business moves based on more than efficiency or profit,” said Asher. “He knows he has to round out his intellectual capital portfolio to position himself for the future. He has the technology and now he needs the emphasis on people and customer experience.”

Asher noted that having an injection of a people-centric company, like Whole Foods, will benefit Amazon. Whole Foods delivers an exceptional brand experience that does not focus on lower prices.

“People fundamentally want human connection and while they don’t have to get it from a business, if they do, it creates a differentiator that reinforces loyalty,” said Asher. “Do it well, like Zappos, and you breed loyalty that is incomparable.”

Asher recognizes there is no substitute for human interaction and, frankly, there are jobs that require the decision-making process a person brings. The best business practice is to use automation where it makes sense but not over the need for human interaction. The ability to provide a personalized touch is crucial to ensuring excellent customer service, which often includes a high empathy experience that warrants lengthy conversations.

“Today’s customer service environment can be automated up to a point, leaving the more difficult issues to be resolved by a person. Contact center agents are required to perform at a higher level of emotional and intellectual intelligence, as the simpler tasks can be automated,” said Asher. “Technology is not empathetic, so you need competent people answering questions and providing solutions across all channels.”

One area where the human touch cannot be replicated by technology today is in the choosing of food. Today a person is needed to select proper food for display and determine the quality of the food products. A machine cannot see if strawberries are fresh or molded, or understand the firmness of an avocado.

Mark Felix, Director of Marketing & eCommerce for Allen Brothers, a Division of Chefs’ Warehouse, has first-hand understanding of the importance of freshness and quality of food products.

“The acquisition of Whole Foods by Amazon should make the entire grocery industry shake. Not only does Whole Foods make for a strong partner, but it provides Amazon with potential new delivery centers across the country in affluent areas from which to delivery fresh groceries,” said Felix. “Whole Foods, with their selection of premier groceries, stands to benefit from the Amazon delivery model in that they can lower store shrinkage by folding in new demand from Amazon customers. I expect the marriage of the two brands to provide a positive customer experience regardless of whether it’s online or in-store.”

Asher believes this may be the beginning of retail 2.0, where innovation and customer centricity align to craft an experience as individual as each customer.

“We all realize that Bezos is a macro-thinker, so it is possible he is purchasing retailers to better serve the population by increasing distribution and reducing costs,” said Asher. “And in the process, he’s improving the organization’s overall customer focus by increasing the high-touch, human aspect of service.”

“It is unusual to hear of anyone discussing they spoke with an Amazon representative. They provide a solid online experience, but they don’t make it easy for you to get in touch with a person,” said Houlne. “As they continue to expand into new areas, ensuring a level of premier service via expert contact center agents will be crucial to providing excellent customer experience. Not everything can be handled by a machine, but humans can be empowered by machines to provide an unparalleled level of service.”

CONTACT US to learn how Humach delivers exceptional customer experiences through high-touch service delivered by sophisticated agents.

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Vic Rovder 2:44pm on July 19, 2017

This is an interesting and disruptive period in the grocery industry. The consumer is likely to benefit, but which retailer stepping forward with the best offering remains uncertain.

We must still wait to see how Whole Foods fits into Amazon’s strategy. Whole Foods hasn’t appeared near the top of Consumer Reports’ supermarket rankings and did not get enough votes to even appear in Market Forces’ 2016 study.

It was an opportunistic but good tactical acquisition. Amazon gains whether it was Whole Foods or another retailer. Whole Foods was vulnerable at this time.

I think we are hoping that Amazon builds a model based on the individual consumer. Amazon can still take the view improving Whole Foods requires more automation. Its competitor Wal-Mart has shown technology assisted grocery distribution that is, in my opinion, too lean on consumer services. Both could take this costly path toward poor results.

Groceries are the second largest monthly expenditure for a household. Price, convenience and time are leading attributes that consumers seek. Data with actionable insights will help grocers meet and exceed these expectations.

Individual human connections made by the retailer will go a long way, as Tim and Tom state, toward elevating loyalty and repeat purchases.  Other grocers, not just Amazon and Wal-Mart, can achieve personalized touches that resonates with the consumer.

How automation is applied at each grocer will determine their success in offering consumers choices toward maximizing their personal experiences.

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