Amazon just bought Whole Foods for $13.7 billion. What? Why is the ONLINE shopping giant going OFFLINE into the physical world? Shouldn’t it be the other way around for all companies, leaving the arguably less efficient and scalable “real” world of shopping behind?
But, in an interesting paradox, our increasingly virtual lives generate a very human counter-reaction — an accelerating human desire for real physical interaction, connection and lasting “experiences” in our increasingly technology-driven, ephemeral, and frequently disconnected world. Amazon’s acquisition of Whole Foods recognizes this trend — and smartly jumped on it.
We still go to the movies, don’t we? We still fight traffic and the throngs, and still pay for expensive popcorn when we can watch from the quiet solitude of our own homes. Why? Precisely because we are social creatures, and we don’t always want quiet solitude. Have you experienced watching a thriller in a theater and, then, the same thriller at home? It’s an entirely different experience due to the entirely different energy generated in the big communal room versus your smaller private room. It’s simply more thrilling to watch a thriller with others who gasp when you gasp and jump when you jump (or even trigger your jumps in the first place).
The virtual and physical worlds absolutely can (and should) be connected in this increasingly disconnected digital world in which we can all communicate with each other, but frequently question how meaningful that communication is and whether we are part of any real community. Remember Pokemon Go? That’s what I’m talking about. And, Amazon’s placement of Whole Feeds into its shopping cart really brings it home.
What we have here, ladies and gentlemen, is a virtuous cycle of increasingly online/virtual social interaction that fuels the growing movement of offline/physical (and downright tribal) live real-world engagement that, in turn, fuels more ongoing online social interaction, action and impact (and then back again). Welcome to our new truly multi-platform Media 2.0 virtuous cycle and overall Zeitgeist. And Amazon/Whole Foods “combo pack” is the new poster child for this online/offline revolution.
Let’s bring this mega-opportunity closer to the world of media and entertainment. And, let’s first take the business of music where, disruption rules the day and traditional revenue streams wither. All doom and gloom, right? Wrong. Music festivals sprout up everywhere (I am obsessed with them, and even have a festival-related digital-first series in development with new live streaming network Roker Media). Why? Because these festivals become so much more than the music itself. The music draws you in, but the real magic comes from the like-minded community and shared immersive experience created during that moment in time. Live-streaming Coachella just ain’t the same thing as actually being there. Not even close.
Rick Farman, co-founder of Superfly (producers of Bonnaroo and Outside Lands, two of the largest U.S. music festivals) strongly agrees. In my conversation with him, Farman describes the need for actual live physical connection as being “the thirst for high-touch, authentic real-world experiences as people increasingly immerse themselves in the digital world.” “You have a symbiotic relationship here,” says Farman. “Social media helps drive the communal aspects of these very social events, and mobile takes it to another level and amplifies it — driving the whole phenomenon of FOMO.”
Live Earth co-founder and Executive Producer Kevin Wall, an intensely creative media visionary and activist who has created and produced many of the largest live events the world has seen, adamantly agrees. “Festivals use digital as a driver, but they are anti-digital in what they represent,” he tells me.
So, how many digitally-driven content companies get it right and fully embrace their physical alter-ego? Not many.
On the music side, we now know that Spotify’s and Pandora’s challenges are daunting, and that they must significantly diversify their businesses or be acquired to survive. One part of that solution may be to bring their online customer engagement into the physical world of music festivals. Expand their brand to, and overall connection with, their virtual customers. Deepen them. Create a real differentiated and fully realized community. The Pandora “Unboxed” Music Festival! “Gold Jerry, Gold!” Again, the online virtual community drives more offline participation and success which, in turn, drives more (and more continuous) online engagement and success.
It goes the other way too. Hey, music festivals harness the energy from your magical weekends that typically dissipates when the weekend is over. Mobilize that passionate community you created. Continue its life and extend that energy online. Continue the “conversation” and almost-tribal sense of community beyond the physical venue itself via virtual interaction and social media. You’ll be glad you did. So will your investors. You have the new Media 2.0 tools to drive success like never before.
And, how about this? Drive even deeper differentiation and engagement by adding a dose of “giving back” and philanthropy to the equation — a la the Life is Beautiful festival in Las Vegas — and then, man, you really have something. A virtuous — truly virtuous — cycle of online/offline/impact and connection. To forge bonds and mobilize like only music and media can do. That was Kevin Wall’s goal with Live Earth 2 in 2015 — to mobilize one billion voices, all committed to urging world leaders to take real action to address climate change (something they finally did in Paris in 2015). In the words of Nobel Prize winning poet (and 2016 Desert Trip curmudgeon) Bob Dylan, “The times, they are a changin’” indeed.
Now let’s take video. How about Netflix, the granddaddy of the OTT video space? Yes, Netflix is the category leader. But it too faces its own existential business model challenges. Netflix’s customer experience is all virtual. Why shouldn’t Netflix try to differentiate itself from its increasing list of behemoth competitors (Amazon, Google/Youtube, AT&T and Apple) that have fundamentally more diverse business models? Why not bring the Netflix brand and experience into the physical world much like Apple did with its stores? That may mean Netflix stores. But, it also may include Netflix-driven theater experiences, Netflix-branded community screenings, film festivals. Myriad possibilities exist.
After all, online video services like Netflix gather deep user data of like-minded viewers in cities across the country. If any of these premium video services successfully create physical communities under their individual banners, then they can leverage these new offline experiences to drive further and magnified success online.
These are just some ideas — some concepts — that hold the potential to be transformative.
And, that’s why Amazon bought Whole Foods — in a smart, very smart, mega-deal that will prove to be Virtuous for its shareholders.