**The following blog post contains a brief discussion of the state of online grocery retail, and then turns to look at an experiential company (Daybreaker) that has partnered with a grocery chain (Whole Foods) in what is a unique example of experience-based retail. At root is an exploration about how we understand customers, what they want to see in today’s brick-and-mortars, and how “experiential” can have a broad range of applications.**

Here we are now, almost a year out since Amazon officially announced its acquisition of Whole Foods Market, the chain known for its high-quality, natural, and organic grocery store model. This $13.7BN deal fueled speculation that the e-commerce giant was making a play for a larger share of the online grocery retail market, and could feasibly change the entire way we think about food access. Sure enough, we have seen some marked changes in the way Whole Foods functions, but has the trajectory of online grocery retail changed all that much?

Some insight can be gleaned from a recent article by Neil Stern, a contributing writer for Forbes, wherein he summarizes Forrester’s “The State of Global Online Retail 2018” report. Here are some of the key findings from it:

  • The global online grocery market is predicted to double from $150BN in 2017 to $334BN by 2022
  • The online grocery market is still wide open “as retailers race to become the default provider”
  • Countries differ in their adoption of online grocery based on factors like geography and economic maturity
To this last bullet point, Stern further explains that geographically concentrated (denser) markets are further ahead in their embrace of online grocery, primarily because their distribution systems are advantaged through economies of scale. They don’t need nearly as much infrastructure to serve the same amount of people, whether that’s based on home delivery (e.g. Fresh Direct, Peapod) or a click and collect pickup model.
 
So does this mean that urban markets might start to see brick and mortar grocery lose ground faster than less-urbanized markets? Possibly. If that is the case, it feels like an important one. Grocery stores help support a host of smaller neighborhood services and stores. In short, they’re both commercial catalysts and anchors. So any trend in the markets that impact their health is liable to have huge ripple effects. To be completely honest, I find it highly unlikely that Kroger and Publix (shout out to my friends down south) are going to disappear overnight. Nor do I think they’ll all turn into Amazon fulfillment centers (or maybe they will). In any event, this got me to thinking about ways grocery stores can adapt. And if we’ve learned anything in recent years, for retail its either death in the middle, or death for being boring.
 
Which brings me to Daybreaker.
 
For those not familiar, Daybreaker is maybe best understood as a company that organizes and manages large, high energy, highly-attended early morning dance parts with a deep health and wellness focus (read: no drugs, no alcohol, only natural adrenaline). Though not the only company peddling the pre-work experiential dance rave model, they’ve definitely risen to the top with a presence in more than 20 cities worldwide, including San Diego, DC, Vancouver, Sydney, Mexico City, Berlin, Tel Aviv, Stockholm, etc. 
 
And I bring them up because on May 10th, 2017, they held one of their dance raves at the Whole Foods flagship location on Lamar Boulevard in Austin, TX (a month prior to the Amazon acquisition, for those who are wondering). The itinerary for the event consisted of a 6am-7am yoga class, followed immediately by a raucous dance party from 7am-9am. Music was provided by both a record-spinning (or is it laptop-clicking?) DJ and a “legendary husband-wife hop hop duo.” It really doesn’t get less boring/more experiential than that for a grocery store. Did I mention Whole Foods provided breakfast? This all brings me to my next point…
 
Millennials. 
 
Daybreaker is perhaps the epitome of a company that is operated by and creates events for young Millennials. If you need further proof, one need only look at the event description (posted here). Give it a quick read and you’ll notice the frequent use of emjois, the way “yoga session” becomes “yoga sesh” and “amazing” is spelled “uhmazing.” If Gigi Hadid was a language, I think this would be it. 
To drive this home a little more, the following quote was culled from the Daybreaker website:

“DAYBREAKER IS CREATING AN ENTIRELY NEW GENRE OF EXPERIENCE. We are a global movement driven by incredible humans who turn crazy ideas – like sober early morning dance parties – into reality. What began as a social experiment and art project, Daybreaker is fueling a worldwide movement to increase mindfulness, camaraderie, wellness, self-expression, and mischief.”

Mindfulness. Camaraderie. Wellness. Self-expression. Mischief. These are the Daybreaker core values. And personally, I think these serve as a great shorthand way to describe the Millennial shopper (depending on how you slice the age brackets). Some might quibble with that statement for reading as reductive, especially the Daybreaker apparatus itself, but often times that’s an inherent challenge to understanding any customer demographic. We always prefer to collect primary data when possible, whether through first-person testimonials, surveys, focus groups, etc, but comprehensive big picture analysis also requires we look at things like U.S. Census and Bureau of Labor Statistics data, secondary syndicated sources, and other aggregated information that necessarily obscures individual nuance.

To summarize, if you feel like you don’t understand how Millennials shop, perhaps this is a good template. I don’t have figures for direct economic impacts of the Daybreaker event, but without a doubt it created strong associations between an established retailer and an exciting experiential brand. Nor was this the first time Daybreaker had collaborated with a large retail brand, having also partnered with Saks, Nike, IBM, Samsung, Macy’s, GE Electric, Clinique, etc.  It also raises an interesting paradox when you go back to Forrester report: dense urban centers where brick and mortars may be more imperiled by online retail is precisely where young Millennials concentrate, and thus where it makes more sense to explore experiential marketing opportunities.

Key takeaways:

  • The Amazon acquisition has not impacted brick and mortar grocery the way many anticipated
  • Regardless, online grocery is a growing share of the overall market
  • With that in mind, retailers still need to think about how to differentiate themselves and not be boring
  • That means understanding your customers and what gets them up in the morning (in this case kombucha and a dance party)
For those who were good enough to make it this far in the post, I definitely recommend revisiting a past post on this blog by Mike Berne of MJB Consulting, written in the days following the announcement of the Amazon acquisition of Whole Foods. One of Mike’s main points is that Amazon’s motivation for the deal was driven not so much as a way to “conquer the grocery space,” but rather to gain valuable real estate in close proximity to their predominantly urban Amazon Prime customers.
Thanks for reading!

 

Instagram post from the Daybreaker Austin launch
Image: @dybrkr

 

Instagram post from an event at the National Building Museum, DC
Image: @dybrkr