The e-retailer heads into the holiday shopping season behind a 30% increase in fulfillment spending and a widening net loss. North American sales increased ...
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When you’re selling food and other perishables over the Internet, three things are critical-presentation, delivery and ease in finding items. Those are three things that Simon Delivers does well and has continued to improve during the past year. While its search function has always been good, the online supermarket made it even better this year. “We’ve seen a 5% improvement in conversion since our search engine modifications,” says Christopher Brown, CEO.
In the past, a customer requesting cereal, for example, would be shown options based on the popularity of the various brands with other shoppers. Now, the brands selection and rankings are based on what that customer has previously purchased.
Also, customers can sort selections based on health factors. By requesting low-sugar cereals for example, a customer gets cereals rated as such by USDA standards. Other health sorts might include low-fat, low-sodium or high-fiber.
To improve delivery, Simon Deliver is using a new software system developed by UPS to narrow the window in which consumers can expect their deliveries to arrive. They are still given a two-hour window. However, on the day of the delivery, they can go to the web site to calculate their delivery time within 20 minutes.
And while visual presentations may not be important to customers buying a can of peas or a box of cereal, it is important to customers buying deli platters or prepared foods-areas that Simon Delivers has been expanding. “Improving the visuals of these products helps us sell because consumers really do want to see what they are buying,” Brown says.
As part of that expansion, Simon Delivers began delivering freshly made sandwiches and deli trays to area businesses and is looking to expand its prepared salads offering. Last summer, it also began offering full-cooked meals.
Despite the improvements and new features, in the end what makes Simon Delivers work is ease of use. “They’ve mastered simplicity,” says JupiterResearch analyst Patti Freeman Evans. “Shoppers don’t want a lot of products thrust at them the minute they get to the site. Simon Delivers has a clear navigation structure and they keep your shopping list for you to make repeat purchases easy.”
Sixty years ago, Roy Webster left his New York import/export fruit business for Oregon’s Hood River Valley, where he bought a pear orchard in the shadow of Mt. Hood. The original family business, Webster Orchards, developed as a national wholesale source to major supermarkets. When it was time for the third generation of Websters to take over, grandsons Scott and Addison Webster saw the web as their ticket to a future in retailing. “We saw the web as a way to leap-frog ahead of other fruit companies and build a national retail market,” Scott Webster says.
But they have never forgotten their valley roots. As TheFruitCompany.com launched in 1999, they decided to reflect the essence of the family business and the aura of the Hood River Valley life in what they presented online and delivered to customers’ doors. They commissioned a local artist to produce watercolor paintings to adorn their gift boxes, and they implemented a multi-step order fulfillment process that constantly checks that their fruit meets the family’s standards for size, texture and sweetness.
The strategy squeezed early profit margins, but it didn’t take long for it to pay off, Webster says. After a customer sent a fruit basket to the staff of The Oprah Magazine, for instance, the publication featured The Fruit Company on the cover of its 2003 Holiday List. Other recognition has come from leading e-retailers like 1-800-Flowers.com and Delightful Deliveries, which use The Fruit Company to drop-ship certain orders. Webster reports that the site is on course to hit $10 million in sales over the next year.
The Fruit Company’s web site itself earns praise from analysts. “This site radiates authority,” says Keven Wilder of retail consultants Wilder & Associates in Chicago, adding that the home page looks more upscale than other leading fruit and gift sites. “The home page romances the product with crystal clear photography that makes images almost jump off the page.” In addition, the web site includes a slick feature that enlarges a product image when the customer mouses over the “large image” wording; the shopper doesn’t even have to click it.
Even though the web generated less than 1% of Walgreen Co.’s total 2004 sales of $37.5 billion, Walgreen nonetheless is getting very adept at using the Internet as a multi-channel tool. In recent years, Walgreen’s insatiable appetite for real estate and building new bricks-and-mortar locations has resulted in a national network of 5,000 stores in 45 states and Puerto Rico. More than 1 billion cars pass the chain’s high-traffic corner locations every week and just over 40% of the U.S. population lives within two miles of a Walgreen’s store, the company says.
With a growing network of stores that the company expects to grow to about 7,000 locations by 2010, Walgreen is also utilizing the Internet and e-commerce effectively to drive more multi-channel sales. For instance, a new service Walgreen is rolling out with HP Snapfish lets customers upload photos to Snapfish.com for printing and then pick up the pictures at a nearby Walgreen location an hour later. “Our partnership with Snapfish gives customers a very convenient online photo service at a competitive price,” says John Sugrue, divisional merchandise manager for one-hour photo operations.
Walgreen is also expanding Walgreens.com with bigger and better online prescription tools. At Walgreens.com customers can order a new prescription and a refill for store pickup or mail delivery, view their prescription history over a secure web link and update their health histories. Customers and patients can also e-mail a Walgreen pharmacist with prescription questions and receive back confidential replies, as well as access extensive health care information from links on Walgreens.com to the Mayo Clinic’s online library.