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Digital Marketing of Online Groceries

The online grocery company “Webvan” is very often considered to be the biggest electronic commerce failure in history with having spent almost $1 billion. After their bankruptcy in July 2001, experts believed that the whole online grocery business model was either a failure or a fraud. Nevertheless, FreshDirect started its operations in the online grocery industry in July 2002 and learned from mistakes others did in the past and it can be stated that FreshDirect is a highly successful online grocery. But what did they do so different that made them so successful? FreshDirect strictly follows the Lean Startup approach by Eric Ries. Identifying customers problems first, getting evidence for these problems by “getting out of the building”, segmenting the target market, developing a solution and creating a minimum viable product, constantly executing the build-measure-learn loop and iterating as well as pivoting if necessary is the key to their success.

In the following, I would like to put emphasize on particular digital marketing activities that are central to FreshDirect’s success.

High-touch requirement of customers

When analysing FreshDirect’s digital marketing activities, it becomes very clear that one of the main obstacles of online groceries in general can be seen in the “high touch” requirement of customers. Philippa Gamse mentioned in her book “42 Rules for a Web Presence That Wins” the rule “Weigh high-tech against high-touch” and this rule is of utmost importance to FreshDirect. Visiting FreshDirect’s website (www.freshdirect.com), one of the first things that catch your eye is the “Daily Freshness Rating”, which is based on both customer reviews of the same day about, e.g. the quality of today’s tomatoes and FreshDirect’s quality experts that continuously check the quality of the food. In addition to that, FreshDirect also understand that people prefer videos over just text. Thus, they show a short 1-minute video that clearly points out how FreshDirect is strongly committed to provide products of highest quality and how they assure that day by day. These digital marketing activities effectively diminish the customer’s concerns about the freshness of delivered products, which they were not able to check by themselves and helps building a trustworthy relationship between the customer and FreshDirect.

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In general, FreshDirect’s website is very user-friendly and it just makes you to want ordering food immediately. After having done so, the real shopping experience begins when you return to their website and want to order a second, third and so forth time. FreshDirect’s website remembers your previous orders and names them as your favourite products, but also recommends various other products from the same category at the same time. This feature is called the YMAL (you might also like) tool and basically bases on the same sophisticated algorithm Amazon or Netflix use. In addition to that, FreshDirect started also using the “customers who bought that product also liked” tool. Furthermore, what impressed me very much is their very good search site. In my opinion, there is nothing more annoying, if you use a search site and the answer you get is only “No results found” or “Not available” et cetera. FreshDirect’ search site is very strong, so if you for example misspell a product’s name or if you just do not exactly know to what category a product belongs to, the search site will recommend and forward you very precisely to products and categories that might be what you are looking for. The whole shopping experience at FreshDirect therefore is very personalized and gives you as a customer the feeling that FreshDirect really cares about you and want to help you find the right product in the most convenient way.

Building a social community + going mobile

Last but not least, FreshDirect is also increasingly engaged in building a social community by running a Twitter and a Facebook account. FreshDirect has a very well-defined target segment and carefully focuses on not to address everyone, but only the customers that they want. As a result, FreshDirect has build a very strong loyal customer base where 65% of its total customer base are repeat, loyal customers that create for 80% of total revenues (Online Grocers: Finding and Executing the right model).

A part of the value proposition to customers of FreshDirect can be seen in convenience and time savings, it was a logical step to go mobile. Customers are no longer bound to using desktops or laptops, but can order food via their smartphone or tablet wherever they are. In addition to that, customers can also follow them via their smartphones on twitter and facebook. As John Leeman, the CMO of FreshDirect states: “Mobile is changing our business because we now get to be a part of our consumers’ lives in many more situations than sitting at a computer.”

In sum, it is very impressive to see to what high extent FreshDirect utilizes digital marketing and how successful they are with their approach. In my opinion, FreshDirect is doing an outstanding job in that respect and I could not find an online grocery that does it better right now.

Key challenge for the web over the coming years

In my opinion, there is one outstanding main challenge for the Web over the coming years that can be summed up in one powerful word: Mobile.

By now, the Internet experienced the fastest adoption ever, but might be beaten by the adoption rate of cell phones, if the trend keeps the same. In terms of smartphone usage, recent statistics show that already 38% of all US Americans own a smartphone and predictions by the well-known Pew Research Center say that by 2015 this number will increase up to 80%+. Thinking about the consequences of increased smartphone usage leads to the conclusion that more and more people will use their phones to surf the Web. Thus, websites in general, and especially commercial websites must react on this development in order to be prepared for the future. Using the example of Facebook, it becomes perfectly clear what challenge the increased smartphone usage implies for the Web in the future: Facebook’s business model is based on providing companies access to a huge user database and the main revenue stream comes from advertisements. The main problem Facebook is facing right now is that there are 0.0 adverts in their mobile app due to lack of space on cellphone displays. Thus, Facebook is already thinking about iterating its revenue model. Right now, Facebook is testing a service in New Zealand where users can pay $1 - $2 in order to guarantee that their posts will be seen by their friends as a highlighted post.

It is very exciting to see how companies will react on the trend towards mobile and how they will adjust their business models in order to meet the future needs of customers.

#key challenge web #mobile trend #smartphone usage #adoption #technology adoption

What was the most important moment for the Web?

When the British CERN employee Tim Berners-Lee released his study “WorldWideWeb: Proposal for the HyperText Project” in 1990, the pillars for the Web as we know it today were built. Berners-Lee main intention was to create a more efficient way of exchanging information between CERN scientists and not to create a platform for the whole world that would be accessible for everyone. However, soon after the first html version was released by CERN on 11/03/1992, programmers began developing a little piece of software that should open up new opportunities for all of us – a Web browser. Until 1992/93, the Internet was more or less exclusively used by academic scientists, governments and their organisations. During 1992, the first Web browsers such as Erwise, Viola and Arena were developed, but the first Web browser that gained more popularity was Mosaic by Marc Andreessen which was released in April 1993. After founding Netscape in 1994, Andreessen invented SSL, (Secure Socket Layer) a security protocol that encrypts data transmitted over the Web and still is used today, and the well-known Netscape Navigator was released. For the first time in history, people were able to navigate the Internet as browsers became the entryway to the open Internet. Utilising Web browsers and the Internet, companies and the way in which companies did business changed tremendously and rapidly as well as it changed the life of so many people. E-Commerce would just not be possible without having browsers and – only to name a few - who can really think of a life without eBay, Amazon and Google nowadays?

Due to the invention of Web browsers, the commercialization of the Web was made possible - this makes me feel that this invention was the most important moment for the Web!

#Most important moment for the web #evolution of the web #browser history #first browser #worldwideweb

Book Review of “42 Rules for a Web Presence That Wins”

“42 Rules for a Web Presence That Wins” by Philippa Gamse provides the reader with a compact, but very insightful introduction about essential business strategies for website and social media success. Especially, when you have not spent that much time with really thinking about design, content and structure of web presences, yet, you will definitely experience many “aha” moments.

As each single rule in this book has its right to exist, it is difficult to point out specific rules for being considered as the most important ones. It always depends on the perspective of the reader which rule needs to be followed and took into consideration in more depth. Nevertheless, as the book is divided in basically four parts, I would like to specifically address some rules of each part. Part I: Management-Level Issues Appointing a web ambassador (Rule2) who sits on the management board of the organization and ideally reports directly to the CEO is crucial for the success of a web presence in order to align the business strategy, marketing and customer service plans, etc. with the web presence. As it is nowadays quite common to have a CTO, there is no reason why a web ambassador should miss. One might think that a CTO could be the web ambassador at the same time, but considering rule 8 “weigh high-tech against high-touch” indicates why appointing a web ambassador makes sense: “Sometimes technology can’t solve everything!” Especially in terms of customer service and in order to create and maintain a high retention rate, a more personal interaction with customers via phone might be more beneficial to an organization than embracing most recent more impersonal web technologies – this can be seen as one example for a decision in which the web ambassador could be involved in. Part II: Setting Strategy and Tactics Rule 15 clearly says that “one size does not fit all” which means that there are various approaches available for maintaining a successful web presence and if one approach worked for company W in business X does not necessarily imply that it works for company Y in business Z as well. In line with that, when developing strategies, content and structure of a homepage you should identify all of your online audiences (rule17) which, besides customers, also include your competitors, employees & potential employees, bankers, suppliers, advertisers, et cetera. Based on that, and after having identified all potential visitors, one key element for a successful web presence depends on your ability to create an emotional connection with your visitors. Therefore, personifying visitors (rule 18) will tremendously help you to see the web presence through your visitor’s eyes in order to get an understanding about what appropriate adjustments need to be made for the web presence. In addition to that, and further putting emphasize on meeting the customer’s needs, constantly getting feedback (rule 23) from your visitors by asking politely for it, is essential for improving the webpage on the one hand and also gives the audience a feeling that their voices are being heard and considered. Part III: Creating Content That Makes Connections Rule 26 points out the importance of the “About Us” site as how you present your personnel and your company heavily influences the ability to create an emotional connection with your customers. It is no secret that venture capitalists, such as Eric Hjerpe from Kepha Ventures, state that they always focus on the “Team” first before thinking about the team’s business idea and business model. Thus, putting personnel’s photographs and information about the company’s history on the “About Us” site offers an opportunity for enhancing the relationship between the customer and the company and helps gaining customer’s trust. When a visitor lands on a website, it is of utmost importance that he/she immediately understands what this site is about, what the company offers and what differentiates them from competitors (Rule 29). Hence, making the right impression on potential customers by formulating and communicating how the company creates unique value for their customers is crucial for keeping the visitor on your webpage and gaining him/her as a customer. Philippa Gamse talks a lot about creating and maintaining an “emotionally connected” web presence. In line with that, one must always consider that people buy emotionally and not intellectually in the real world and that this also needs to be transferred to the cyber world. Thus, communicating that your company understands the needs of their customers and that you are committed to meet these needs, engaging in discussions with customers, asking and considering their feedback, ensuring them that customer service is of utmost importance to you, et cetera will help you to create the above mentioned emotional connection that drives an emotional buying behaviour. The rule behind this is to avoid unexpected roadblocks (Rule 33) caused by e.g. frustrating site search results, not participating on customer’s feedback or missing clickable calls to action. Part IV: Measuring Results Making intelligent use of software such as Google Analytics helps you to understand what is really happening on your web site. Thus, only looking at e.g. the number of visitors is not sufficient, but you need to drill “below the dashboard” by interpreting the available data correctly with the help of carefully set key performance indicators in order to adjust the web presence or even to set the future strategy. Finally, the last rule I would like to point out is rule 39 “Segment Your Visitors for Deeper Understanding”. It does not make sense to put all visitors in the same category when evaluating traffic data. Doing so, could lead to massive misinterpretations. For example, when your company runs a two-sided business such as a travel reservation service, it is obvious that you need to segment between e.g. the travellers and the airlines. Furthermore, there is also a need for segmenting within the different airlines as their product offerings, corporate culture, target group, etc. might completely differ.

In sum, a proper company’s web presence can be seen as one of the main pillars of nowadays digital marketing and this book helps the reader to get a good overview about critical elements that need to be considered very carefully when creating and maintaining a web presence as the author finally states: “You must have a clear strategy for your web presence at all times” (Rule 41). Nevertheless, if you want to dig deeper into the subject of creating and sustain a successful web presence, further readings are recommended.

#42 Rules for a Web Presence That Wins #book review in 1000 words #web presence #how to build a strong web presence

England just can't win in penalty shootouts!

A sad day for my English friends! I would have loved to see another match between England and Germany in the semi-finals of this Euro2012 cup!

http://www.guardian.co.uk/football/2012/jun/24/euro-2012-england-italy-quarter-final

"Antonio! Una pizza salame, per favore!"