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 ...
More so than in most categories of online retailing, e-retailers in the food-and-drug category must offer something extra special to lure shoppers from the comfort and familiarity of shopping in their local groceries and pharmacies. It’s a challenge that the three online retailers in this year’s Best of the Web food-and-drug category—FreshDirect, Omaha Steaks and Green Mountain Coffee Roasters—meet head-on.
Internet Retailer Best of the Web 2007
More so than in most categories of online retailing, e-retailers in the food-and-drug category must offer something extra special to lure shoppers from the comfort and familiarity of shopping in their local groceries and pharmacies. It’s a challenge that the three online retailers in this year’s Best of the Web food-and-drug category-FreshDirect, Omaha Steaks and Green Mountain Coffee Roasters-meet head-on.
FreshDirect, for instance, offers a service to simplify grocery shopping in a way that could only be done on the web. Its One-Click Recipes, introduced this year, let shoppers choose from among more than 400 recipes out of 53 cookbooks. They can search and sort using criteria such as main ingredient, level of difficulty, number served, cuisine and cooking method. Once a shopper selects a recipe, the ingredient list becomes a virtual shopping list, as shoppers add needed ingredients to their shopping cart.
And while many steak buyers surely have their favorite neighborhood butcher or meat department, Omaha Steaks provides a broad range of shopping options that can rival or even go beyond what’s offered over the counter at the local store.
The site supports ease of shopping by letting visitors shop by categories ranging from Premium Beef and Seafood Selections to Sauces & Seasonings and Gift Plans and Ideas.
At GreenMountainCoffee.com, a home page greeting, “Fall into Autumn with our seasonal coffee selections,” backed by a Vermont country scene, invites visitors to view an automatically changing series of images of specialty coffees, such as Panama La Esmeralda Geisha. A visitor can click into that particular blend of coffee to learn that it originated in Ethiopia before taking root in Costa Rica, and its taste ranges from blackberry to ripe mangos to ginger and chocolate.
But Green Mountain Coffee goes beyond images and information on unusual coffee blends to offer a broad shopping experience for the coffee buyer-from tips on buying the right brewing machine to selections of complementary foods to customer reviews. And unlike many e-retailers, it places its toll-free customer service number on every page. It’s comprehensive service like that, along with engaging merchandise displays, that will keep customers of Green Mountain Coffee and others in the Top 50 coming back for more.
Making meal time fun
To most consumers, grocery shopping is a mundane chore that doesn’t necessarily become any sexier when ordering online. FreshDirect has tackled the problem head-on by making its web site a place where shoppers can interact with fresh food. The company, which services the New York City area, doesn’t just fill orders and deliver them; it creates ways for consumers to put fresh, high quality meals on the table with greater ease.
With more than 500 recipes for specific courses, special diets and themed meals, in addition to prepackaged meals created by celebrity chefs, FreshDirect has hit on a recipe that brings value to online grocery shopping.
“Anytime unique content can be presented, it strengthens the brand presence of the web site and differentiates it from the competition,” says Patti Freeman Evans, senior analyst, retail industry for Jupiter Research. “There is a real value to providing meal ideas and meals that are not prepackaged T.V. dinners.”
Shoppers can download a recipe, shop for the ingredients and receive their orders on the same day. They can also purchase partially prepared meals, such as marinated meats, and fully prepared microwaveable meals.
As part of its merchandising and marketing strategy, FreshDirect has extended its line of prepared meals with dishes created by renowned chefs. The first chef in the series is Terrance Brennan, proprietor of Artisanal, a bistro-fromagerie-wine bar in New York. The new line of eight meals accounts for about 2% of total sales, according to Steven Michaelson, president of Fresh Direct. “Our focus is on product innovation to better serve the customer,” says Michaelson. “These types of meals lend themselves to that strategy.”
To further enhance customer convenience, shoppers can save shopping lists or create and store shopping lists for holidays and other occasions. In addition, all ingredients for each recipe are carried on the site. Staples, such as salt and pepper, are separated and listed as ingredients. “Fresh Direct has made ordering and reorders highly convenient,” adds Freeman Evans. “They have expanded the concept of prepared meals.”
This is why more consumers say Bon Appétit when it comes to shopping at FreshDirect.
Brewing on the web
When a manufacturer sells direct to consumers in addition to offering its products in retail outlets, its web store has to offer something unique. Green Mountain Coffee Roasters Inc. remembered that marketing and merchandising point when it began beefing up the content and offerings on its web store. The centerpoint of the new strategy was single-cup servings for Keurig K-cup brewers.
Rather than expand this concept to grocer’s shelves, Green Mountain opted to keep it exclusive to its web store. By doing so, the company has been able to introduce more than 30 varieties of K-cup coffee, without undermining its retail sales channel.
“Consumers expect more from the web store, they want to see items they can’t find on the shelf,” says Patti Freeman, Evans, senior analyst, retail industry for JupiterResearch.
So far the strategy has proven to be a hit. Online sales accounted for about one-third of the $47.8 million in total sales during the third quarter of fiscal year 2006, which ended July 1, according to Ken Crites, director of consumer direct for Green Mountain. “We saw K-cups as a new product offering to consumers and the web site was the best distribution channel.”
That realization proved to be the impetus to invest more heavily in the web site, which until a few years ago was basically an afterthought. “We didn’t put a lot into the site,” acknowledges Crites, who was hired three years ago specifically to grow the consumer direct business through web sales. “This is a product that creates a wow factor, so we had a reason to make a splash with the site.”