A few weeks ago we discussed how high-end food retailer, Whole Foods, was planning to roll out a chain of stores selling lower priced products. The company suggested the new chain would be “uniquely-branded” though we wondered whether this meant the name of this chain would not include the Whole Foods brand name. As we noted, doing so was a “bit of a gamble as there are not many examples of retailers that have successfully launched a new retail concept using a name that does not contain the well-known brand name.” We even offered examples of other retailers, including Nordstrom and Target, which have created alternative chains but did so by including the main brand name in the name of the stores (i.e, Nordstrom Rack and TargetExpress).
We now know Whole Foods “uniquely-branded” message is not exactly accurate. According to the title of a story in the Los Angeles Times, the chain will be called 365. However, this is a bit misleading. In actuality, the full name of the new chain is 365 by Whole Foods Market. So their branding strategy, at least in terms of the chain's name, is not quite unique as it contains the the parent company's brand name.
By including the Whole Foods name in the new chain name, the company is following a Family Branding strategy. A key advantage of Family Branding is that including the name of a well-known brand in a new brand name may help build customer awareness more rapidly compared to naming the chain with an entirely new name. Of course, this is the same benefit Nordstrom and Target expected when using their brand name as part of the name of new retail chains. Now, what Whole Foods is doing that is somewhat different from what Nordstrom and Target have done, is if this new chain takes off it will be easy for Whole Foods to drop the “by Whole Foods Market” portion and eventually just call the chain 365. This could then develop as a stand-alone brand.
It is also important to understand, that branding is not all about a name. 365 by Whole Foods Market could certainly produce a retail experience that will set it apart from other retailers. Possibly to the point that when customers hear the name, 365 by Whole Foods Market, they instantly associate it with certain desirable marketing elements (e.g., value priced products, colorful interior, etc.) or beneficial shopping experience (e.g., speed of shopping, nice employees, etc.) that are different than what is experience at Whole Foods. If this is the case, the two chains may evolve with completely separate brand images even though they contain the same Whole Foods name.