It was a good week to be a Whole Foods shareholder. The pioneering organic grocer may have escaped the limits of its business model by selling itself to Amazon at a 25% premium to current share prices. Activist shareholders who had been pressuring Whole Foods CEO John Mackey to sell the company have gotten their wish.
What has Amazon bought? First, growth. The company has been interested in the grocery category for some time. It sells many non-perishable items on its website, and the AmazonFresh delivery service has expanded into a range of perishables. Bloomberg estimates U.S. food and beverages was a $795B category in 2016. It also estimates that Amazon captured only 0.8% of this number. Compare this to the estimated 17% share of consumer electronics sales that Amazon obtained in 2015.
In the following post, D’Amore-McKim School of Business Assistant Professor Yakov Bart explains the advantages that companies can receive if they invest in improving customer engagement.
Marketing managers have long recognized customer engagement as an important driver of a firm’s financial success. By creating a highly engaged customer base, firms can increase their market power through enhanced loyalty of their customers, and get access to market insights based on customer behaviors, which is critical for any company looking to sustain value creation over time.
In parallel, major improvements in communication and information technologies have provided firms with new data-driven capabilities to capture, analyze, and exchange customer intelligence data at increasingly high volumes, varieties, and speeds. Traditionally, companies could gather such data only from observed transactions and market research surveys. Now, however, customers are constantly sharing information through social media platforms, by interacting with smart products, and by letting firms obtain other information about their locations and usage of online and mobile media through digital intermediaries. Advanced analytic capabilities also allow firms to apply obtained insights instantaneously to decisions on product design and communication strategies.
Nevertheless, despite both the recognized importance of and enhanced access to opportunities related to customer engagement data, firms often find it challenging to leverage these opportunities in a sustainable and long-lasting fashion. Read more…
In the following post, D’Amore-McKim School of Business Associate Professor Bruce Clark discusses the future of Volkswagen after the announcement of a civil settlement in response to their emissions deception.
On June 28, 2016, Volkswagen submitted a plan to a federal judge compensating VW owners for its malfeasance in selling them diesel cars erroneously described as “clean.”
Unfortunately, this is unlikely to be the end of pain for Volkswagen. Read more…
In the following post, D’Amore-McKim School of Business Assistant Professor Daniele Mathras discusses four key dimensions that affect consumer psychology and behavior in relation to their religious affiliation.
Religion is an important part of life for most individuals around the world. In fact, in 2012, Pew Forum reports that 80 percent of people worldwide and about 70 percent of Americans affiliate with a religion. For centuries, scholars and theologians have sought to understand the role that religion plays in shaping the behaviors of humans. Since 1992, a total of 180 journal articles mentioned religion in the top five consumer research journals. These scholarly works have focused on a wide array of topics, such as market segmentation, identity development, and the sacralization of consumption.
Because the topic of religion is experiencing a resurgence, but the research had yet to be systematized, I developed the first conceptual framework and research agenda for exploring the effects of religion on consumer behavior together with my co-authors Adam B. Cohen, Naomi Mandel, and David Glen Mick. Read more…