While not intended to be a plug, Version 5.0b now includes aisle-sorted
shopping lists you can match list items to any number of stores (suppliers),
with support for both frequent items (items need by not part of any recipe) and
pantry items (don't buy because it's already on hand).
The entire subject of grocery shopping has occupied more of my time than I'd
care to admit. Yes, we'd love to tie our software into stores, but *not*
primarily for the reasons (ordering/home delivery) you might expect.
When I see the discussion focusing on the *logistics* part of the marketing
cycle I have to say that I believe this to be the *last* area for success on
the net. IMHO consumer ordering and delivery are the least likely to produce
success except for dense urban centers, niche and non-food players. Yet for
the business-to-business part of the logistics cycle, the network and
information systems can produce excellent leverage for distribution logistics
(check out Nonstop/SF and EMS/Chicago for two quick examples.)
You're more likely to find network gold looking into Marketing 101 subjects
before you invest too much time on the logistics components. You know the list:
- Build awareness (focus, reach, frequency...)
- Develop your brand equity (it's the most important thing you've got)
- Develop relationships (loyalty, frequency, community)
- Resolve uncertainty (make it safe to buy, easy to buy)
- Sell (new ideas, new uses, build some excitement, make 'em hot to buy)
- Service (you mean I have to COOK that thang?)
Who's doing it well? Check out the popular <a href="<a href="http://eat.com">http://eat.com</a>">http://eat.com</a> site for Ragu's
Mama's Cuchina. Bar none, the best food site around. Ask them and you'll see
what I mean by leverage through the basics. They are leaving their retailers
with no choice (or at least a reduced choice) in the equation. I'm going to
buy their stuff. Often. Makes me feel good. I like them. I know what to do
with what they sell me. Other successes include Dole and Frito-Lay -- both
with very different approaches to food marketing.
As a student of the Information Value Chain that flows *between* producers
(like Ragu or Pillsbury), their distribution/retail networks (Kroger, Fleming
or SuperValu), and the media -- *to* the consumers they all serve, I believe
the food business (most of retailing) to be in very poor shape. But the food
business is in the worst shape (maybe I'm just more familiar with it?) because
it's so big, fragmented and complex.
Retailers claim 70% of the manufacturers' marketing budgets (makes new product
introductions a real bummer), manufacturers sell against the retailer's private
label brands financed with the retailers' pay-to-play policies levied against
the national brands (you), retailers merchandise and sell on price (makes
value/context/solution-based selling a real challenge), retailers stock their
shelves based upon an aggregated consumer (category management reigns supreme)
with too many me-too products (see new products above). And retailers employ
consumers to pick and pack and deliver their own orders (do you feel like a
happy, volunteer store employee while you're shopping?) What about when you
forget something you *really* needed?
Therefore, its all the more critical for producers to gain what leverage they
can to maximize their Information Value Streams. Courtesy of the Net and with
other electronic marketing platforms, it's now possible for producers to
delivery more of their value (product, company, inter-product linking,
expertise) directly to consumers. Said another way, a prime goal could be to
enable the consumer that's looking at your package and be able to look back up
the chain to the company and tap into the wealth of insights, experience and
intention that created the product in the first place. Darned tough to put all
that value on the package. Difficult to put inside the product as well.
Better to use a medium like the Net to help companies communicate and bond with
their customers.
Versus giving up 70% of your marketing budget to be used primarily for
price-based selling. Unfortunately you most likely don't have a choice, so it
becomes a question of how you're going to be spending the other 30%.
And for all their power, the retailers are failing to satisfy the consumer.
Fact is that people hate to shop just as much as they hate going to the
dentist. Customer satisfaction levels are low, low, low. But "What to do?"
retailers will ask you. One theory for helping the stores is to give them the
information tools to do a better, solution-selling, consumer-focused
merchandising job. Also, equip retailers to be a more effective agent in the
process of sourcing new products, informing the consumer about their choices,
and then making those products available the most convenient logistical manner.
That, in part, is why I believe that the *logistics* component of the marketing
cycle will likely follow those areas I've discussed.
&lt;awkward transition here -- and boy is this a long post&gt;
It seems that there are three distinct shop-from-home grocery strategies
available in the market today.
PREMIUM SERVICE
Peapod/Chicago/SF offers a cradle-to-grave service where they pick, pack and
deliver everything themselves. Problem is that 10% of what their customers
want to buy is out of stock in the stores where they pull their orders.
Because they are smart people (take a bow Andrew, Thomas, Seth and Tim) and
they listen to, and tell their customers the truth, Peopod keeps customers
despite the glitches. Indeed their customers seem to LOVE the service. And
Peapod is working to mine the mother load of non-logistics opportunities.
Given time, they will be very successful. (Congratulations Tribune, Ameritech,
Neilsen...).
NATIONAL REACH
Shopper's Express is a national service (WDC-based) that focuses on national
reach with store employees picking and packing the orders, and contractors
delivering the orders (taxi anyone?). Stores seem to hate the costs this
creates for them (training, operations), but if they want to play and they're
not in Chicago/Jewel or SF/Safeway, it's a creditable alternative. Customer
satisfaction levels are much lower (very small sample here and less familiarity
with SE's operations; sorry Elan). No doubt they make a bundle delivering
prescriptions in Florida. If it's 115 in Phoenix I'd consider having them
deliver my milk and cereal. Or if I'm under the weather... So I don't have to
be delighted with the service to find it of substantial value (on occasion).
It seems that their success rests with a combination of greater awareness
coupled with the greatest reach. Brand the promise and start selling the hell
out of it. Fix what breaks as you struggle through the growing years. Long
term, it's also a winner, but for different reasons.
LOWEST COST
On again and off again Harvest America has offered UPS delivery of staples at
great prices. Sure it takes a few days, but for staples it's a fine
alternative. Double coupons can be a big draw. But because you *subscribe* to
the service, if you don't use it, it may provide marginal real savings vs. the
warehouse stores. Now, if they automate their systems and blow away the
membership fees it might be something to see. But then how will they make a
profit? I've never seen cheaper win without unbelievable dominance (Wal-Mart)
or another incredible reason to be.
NICHE/NON-FOOD
There are hundreds of opportunities here as members of this list have
commented. Beef, cheese, wine and the like.
Sorry for the long post. Trouble with lurkers when we decide to come out of
the closet. Hope this promotes some useful discussion for list subscribers.
P.S. Check out one of our contributions to this process in the CD-ROM cookbooks
we're publishing for Pillsbury, Andre Prost (A Taste of Thai) and other food
companies and publishers. For ten bucks they're a remarkable value for both
producer and consumer.
BTW a sleeper might just turn out to be the Smart Card when you tie it together
with electronic marketing programs, frequent shopper/loyalty programs,
electronic benefits transfers (welfare), and if it gives consumers a chance to
benefit from the flood of data that's flowing all around them (the net, public
and private), but currently not benefiting them in any direct or measurable
way. Stranger things have happened.
----
Gregory Hastings - Pinpoint Publishing
707-523-0478 ext. 111 or Fax 707-523-0469
ghastings@cookworks.com
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Answering "What's for Dinner?" questions since 1982
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