Tag

ALDI

Browsing

What: With its purchase of Whole Foods for US $13.7 billion, Amazon strengthens its position in the race for the retail industry, and opens the door to direct contact with the Hispanic community.
Why It Matters: The U.S. supermarket sector is a business that moves about US $800 billion in sales annually, according to Bloomberg data.

Amazon’s acquisition of Whole Foods for $13.7 billion is the largest acquisition to date by the Jeff Bezos-led company, and the most important merger in the retail industry. With this deal, Amazon now has 450 stores in major cities in the United States, Canada, and the United Kingdom. What are the implications for marketing and multicultural/Hispanic marketing in particular?

Lee Vann
Lee Vann, Chief Strategy Officer of Captura Group.

“Consumers are increasingly demanding products and services in near real time or “on-demand,” and a physical presence in major cities gives Amazon an infrastructure to support consumers in near real time. This is especially salient when it comes to the grocery category,” Lee Vann, Chief Strategy Officer of Captura Group, told Portada.

The two companies will operate separately and the supermarket chain will retain its brand. Amazon founder Jeff Bezos points out that Whole Foods is “loved” by its customers for the quality of its products, and will maintain its corporate offices in Austin, Texas, for now.

“The acquisition, giving Amazon the in-store presence previously lacked at scale, represents a level of competition that brick and mortar retailers had previously been able to avoid. While this entrance has an immediate effect on grocery, it puts other industries on notice,” said Sean Cheyney, Vice-President, North American Business Development at Triad Retail Media.

The acquisition gives Amazon the in-store presence it previously lacked. This represents a level of competition that other retailers had previously been able to avoid.

Both Amazon and Whole Foods stand to gain from this transaction, according to the industry expert. The e-commerce giant is in the habit of being an industry disruptor. “Now is the time that grocers and retailers across industries need to be competitive in their markets with their digital advertising and in alignment with their suppliers.”

The announcement undoubtedly rocked the supermarket industry, as the acquisition of Whole Foods changes the rules of food distribution. This was reflected in the stock market, with some companies in the food industry seeing their shares fall immediately. Kroger’s shares fell 15%, while Target lost 11% at the start of the trading session, and Costco 7%.

Now is the time that grocers and retailers across industries need to be competitive in their markets with their digital advertising and in alignment with their suppliers.

Competition Intensifies

AmazonThe deal puts the U.S. market in an interesting situation, just a few months away from the arrival of German supermarkets Lidl, and its rival Aldi, owner of Trader Joe’s supermarkets. With their entry, the German companies will strengthen their presence in a market with high growth potential.

On the other hand, while all this was happening, Walmart also announced on Friday its purchase of online fashion store Bonobos for $310 million. With this move, the retail giant seeks to compete directly with Amazon in the fashion sector.

Walmart also announced on Friday its purchase of online fashion store Bonobos for $310 million.

Walmart has demonstrated an aggressive strategy to gain ground in the e-commerce sector, becoming a very strong competitor. Last year, the company acquired jet.com for $3 billion.

The acquisition appears to have been a smart move, as Walmart sales grew 63% during the first quarter of 2017 compared to the same period last year.

An approach to US Hispanics

Sean Cheyney
Sean Cheyney, Vice-President, North American Business Development at Triad Retail Media.

“This purchase is something that the industry had been waiting for many years to give it seriousness, organize its data, and better align the industry’s digital efforts. With these metrics, retailers are able to give consumers a better experience,” added Cheyney.

Analysts agree that Amazon will put the retail industry under a lot of pressure, as it first did with bookstores and electronics stores.

On the other hand, “remember that Amazon rolled out a Spanish language version of Amazon.com. As they seek to win with the on-demand consumer, they know they must win with US Hispanics, and now they have a front end to service those who speak Spanish and a physical presence in major cities to deliver,” said Vann.

Remember that Amazon rolled out a Spanish-language version of Amazon.com. As they seek to win with the on-demand consumer, they know they must win with US Hispanics, and now they have a front end to service those who speak Spanish and a physical presence in major cities to deliver.

In addition, it has the necessary cash to invest and be aggressive, with the support of its current suppliers and those it keeps adding. Likewise, it will have the strength to continue offering its Amazon Fresh grocery delivery service.

It will also put its Amazon Go model to the test. The company opened its first automated food store in downtown Seattle, where payment is made through an Amazon account and a cell phone.

Whole Foods MarketThe idea has been described as “brilliant” by analysts, who see it as a “natural evolution.”

“Retailers across all industries should be watching closely to see how Amazon uses this acquisition and its effect on Amazon’s market share within the grocery sector. Given Amazon’s history, it will take the model developed for grocery, and then replicate it across other retail verticals. While watching closely, retailers can take steps to mitigate Amazon, blocking and tackling along the way. This includes getting serious about customer experience and advertising models that allow the retailer to earn its fair share of advertising dollars that its suppliers are currently spending to sell products on Amazon,” added Cheyney.

While watching closely, retailers can take steps to mitigate Amazon, blocking and tackling along the way. This includes getting serious about customer experience and advertising models.

Join us at PORTADA Mexico!

A summary for Corporate Marketers, Media Sales Executives and Advertising Agencies to see what clients are moving into the Hispanic market and/or targeting Hispanic consumers right now.

Check out Portada’s Interactive Directory of Corporate Marketers and Agency Executives. 15 NEW LEADS HAVE JUST BEEN UPLOADED. To acquire the database, please call Jennifer Chan at 347-840-1311 or e-mail her at jennifer@portada-online.com SEE A DEMO OF THE DIRECTORY!

For prior Sales Leads editions, click here.

  • Chrysler

descargaChrysler has released its latest campaign for the 2017 Chrysler Pacifica aimed at Millennial dads.The campaign stars comedian Jim Gaffigan.TV and online spots released so far include a 30-second “Dad Brand” launch spot, a 30-second spot called “Tennis,” which shows that to build a strong “Dad Brand,” you’ve got to do everything for yourself; a 30-second spot “One on One Time,” which shows how quality time between a son and his “Dad Brand” is very important and finally, a 30-second spot “Neighborhood Watch,” which shows how even a parked Pacifica can do a lot for your “Dad Brand.” Additional spots will begin airing across television and digital/online throughout the coming weeks and months across national broadcast, including prime time. The campaign includes nine different ads in total with Gaffigan, his wife Jeannie and their five children. The campaign debuts with TV and online spots.The Pacifica replaces the Town & Country minivan and the Dodge Grand Caravan.

https://youtu.be/rGEm8Lct2rs

  • ALDI

ALDIAbout a month after it debuted its first California stores, grocery retailer ALDI will open its next round of stores in the region this Thursday, April 21. Six of the 10 new stores will be located in Los Angeles County, three in Orange County and one in San Bernardino County. ALDI plans to open approximately 45 stores in Southern California by the end of 2016.Stores celebrating their grand opening on April 21 will host an official ribbon-cutting ceremony at 8:45 a.m. The first 100 shoppers to arrive at each store will receive a golden ticket redeemable for an ALDI gift certificate of various amounts, and all shoppers will be invited to enter an on-site sweepstakes for a chance to win Produce for a Year. Additionally, shoppers on April 21, 22, 23 and 24 will receive a complimentary ALDI reusable eco-bag, while supplies last.

  • Tecate

descarga (2)Tecate has released its first-ever national campaign “Born Bold” with the help of its signature black eagle and featuring two famous Hispanic athletes: Mexican boxing superstar Canelo Alvarez and soccer referee Felipe Ramos Rizo. Saatchi & Saatchi NY was behind the effort.  The brand doubled its investment in digital and social marketing, leveraged its opportunities for sponsorships with Alvarez ahead of two major bouts and planned its first national campaign. The company also turned to global agency Elmwood to redesign its packaging. (CHECK OUT our interview with Felix Palau, Heineken Regional Director Global Marketing Americas Heineken.)

https://youtu.be/89xIZTWZ2x0

  • Kraft Heinz

KraftCrackerBarrel_PrestigiousAwards16Kraft Heinz will promote its Cracker Barrel macaroni and cheese, which came out in February as an extension of the classical cheese brand, with the aim of winning more consumers who buy prepared macaroni and cheese. The Cracker Barrel macaroni and cheese will be promoted through a new campaign from CP&B called “Award Worth Winning.“Kraft already dominates the shelf-stable boxed macaroni and cheese category with products including the main Kraft macaroni and cheese.Marketing plans include 15-second and 30-second commercials that will run through September, social media and in-store plans promotions.Kraft spent nearly US$11.4 million on Cracker Barrel marketing in 2014, according to data from the Ad Age Datacenter. CP&B is the creative agency on the project, with Starcom on media and Ketchum handling public relations.

  • American Family Insurance

oMadison, Wisc.-based American Family Insurance has released a new campaign  and website to help its customers fulfill their dreams. Under the same tagline “Insure carefully. Dream fearlessly,” introduced last year, the campaign  includes three TV spots which  will roll out regionally to the 19 states where the insurer does business.BBDO New York was behind the effort.This is the first time the brand created a website featuring curated content. Consumers can get pre-recorded advice from 15 different children as part of the digital portion of the campaign. Mirum, a J. Walter Thompson Co.-owned agency, created the feature. Mindshare handled media buying duties.In 2015, the company spent US$194.5 million on measured media in the U.S., according to Kantar Media.

  • StarShop    

StarShop and Tu Visión Canal have announced an exclusive joint partnership in developing a Spanish Language Shopping Portal and Mobile App. This initiative joins the ideology of Tu Visión Canal which considers Language and Culture in giving Spanish Speakers the On-Line Video experience they deserve with high fashion, high quality and the affordable products of StarShop. Together they will capture a large percentage of the US$1.5 Trillion+ U.S. Hispanic retail purchasing power.  StarShop represents brands from renowned retail international companies and examples of brands being sold on StarShop include Guess, Ray-Ban, LG, Canon, Dyson, and Clinique. These brands will be married to Tu Visión Canal Content Creators to integrate organically into their weekly videos uploaded onto Tu Visión Canal, to deliver a unique shopping experience. StarShop “Compra Como Una Estrella” will be available on TuVisiónCanal.com and integrated into the Tu Visión Canal Mobile App, now available for iOS and Android, during the summer of this year.