Whole Foods Market has aggressively expanded its U.S. and U.K presence through the acquisition of over 10 grocery companies over the past 20 years. Therefore, Whole Foods has enjoyed healthy growth; however, these acquisitions left the high-end grocery chain with a “fragmented technology infrastructure”3, which has inhibited its ability to improve the customer experience. In October 2015, Whole Foods announced a partnership with business enterprise software company Infor to merge the grocer’s twelve disparate legacy systems by developing a cloud-based solution that will improve Whole Foods’ entire supply chain.
Whole Foods identified the development and implementation of the Infor merchandising and supply chain management platform to be one of nine steps in achieving 5% sales growth in 2016. Whole Foods sees the completion of this step as instrumental in achieving its strategy of creating a differentiated customer experience that offers “new levels of transparency and accountability [by] leveraging technology to deliver an improved shopping experience.”2 To successfully complete this strategy, Whole Foods is focused on substantially improving its business and operating models with the help of Infor.
Revamping the Supply Chain
By utilizing insights from the Infor platform, Whole Foods plans to improve the entire supply chain from suppliers to its retail locations. With the new Infor software system, Whole Foods will be able to capture detailed information from suppliers as well as “send information back to suppliers on how products are selling and give them insight into trends”3. Greater insights into demand for products will also enable the retailer to avoid excessive waste associated with unsold perishable goods. Improved analytics will “help [Whole Foods] manage pricing to keep stock moving off the shelves”1.
In addition to pricing insights, the retailer’s new software system will assist in smarter decisions on how “product is presented and promoted to customers, including decisions on how stores are laid out, how much space is allocated to each product, as well as decisions on pricing and promotion”1 These insights around product, pricing, placement, and promotion will provide Whole Foods with greater operational transparency down to the individual store level.
A Transparent Shopping Experience
Data collected through the supply chain will also be leveraged to improve the customer experience by providing customers with better information on the products offered through the retailer. Infor has the potential to capture hundreds of attributes on every product offered through the retailer, down to granular details such as water usage to grow specific produce or when vegetables were harvested. By feeding this vital information back to customers, Whole Foods can increase transparency for its environmentally-conscious customers.
The implementation of the Infor cloud-based software platform has the potential to allow Whole Foods to “’leap frog’ the capabilities of its competitors.”3 For Whole Foods to realize the full potential of the Infor platform, the retailer must determine ways to merge their merchandising and supply chain data with other software platforms that it is currently leveraging, such as Apple Pay and Instacart. By integrating these platforms, Whole Foods can understand and predict customer habits, enabling the retailer to offer its customers a fully personalized shopping experience. Whole Foods is also in the process of launching 365 by Whole Foods Market – modern, smaller store format stores geared towards Millennials. Whole Foods can leverage insights captured from its new software system to help build 365 into a sustainable enterprise.
The Whole Foods partnership with Infor will result in a substantial, but needed, digital transformation that has the potential to help Whole Foods jumpstart its growth in the coming years. By leveraging data insights to revamp its supply chain, Whole Foods can drive operational efficiencies throughout the supply chain by improving the flow of data between its suppliers and its retail locations. Additionally, by providing customers with “an understanding of how a product’s been handled, treated and grown throughout the whole lifecycle”1, Whole Foods can further differentiate itself from its competition by providing a data-driven customer experience. A successful implementation of Infor will come with a host of challenges but presents Whole Foods with the opportunity to transform the retailer into a trailblazer in technology.
1 Phil Wainewright, “Whole Foods Market teams with Infor to transform”, 2015, retailhttp://diginomica.com/2015/10/20/whole-foods-market-teams-with-infor-to-transform-retail/, Accessed 2015
2 Whole Foods Market, 2015 Annual Report, http://s21.q4cdn.com/118642233/files/doc_financials/2015/Annual/2015-WFM-Annual-Report.pdf, accessed November 2016
3 Beth Kowitt, “Whole Foods makes big bet on tech”, 2015, http://fortune.com/2015/10/14/whole-foods-retail-software/ accessed November 2016