ROCHESTER, Minn. -- Barlow Foods, an independent retailer here, plans to promote its nearly two-year-old home-shopping service this summer.
While the retailer would not release specific figures, it indicated home shopping is a profitable part of its operations. In addition, executives believe offering the service gives the store a strategic advantage over its competitors.
"Every sale we do in home delivery is a sale the competition isn't making," said Paul Blomberg, commercial sales supervisor for the single-store operator. "In the overall scheme of things, if we're getting 30 sales, that's 30 sales no one else is making. We're trying to get people who aren't coming in the store."
The promotions, which will include radio and newspaper advertising that tie into its current marketing campaign, are aimed at building awareness for its home-shopping service, through which consumers can order groceries using their touch-tone phone. Currently Barlow flags its home-shopping service in its weekly ads, attracting an average of five new customers a week. Barlow has an average of 22 customers a week who shop via the phone; its goal is 50 customers a week, said Blomberg.
A total of 700 people, including dual-income families, the elderly and personnel at day care centers, have signed up for the home-shopping service.
The average order, which takes the store about half an hour to fill, is in the $60 to $80 range, said Blomberg, adding that depending on the weather, a total of $1,000 to $2,000 of groceries a week are being delivered by the service.
To use the service, customers fill out an application and pay the store $10, which entitles them to a 120-page catalog featuring 7,000 items from which to order their groceries and two free deliveries. Delivery charges are $5 per order.
This summer's promotional efforts will "give the program a little shot in the arm," said Blomberg.
However, he said Barlow does not want to "force-feed" the service to its customers. That approach, he said, might be almost like "telling customers they're not smart enough to know what they want."
Such an aggressive approach also clashes with consumers who define their independence by their ability to go grocery shopping. This is especially true for the elderly, who view grocery shopping as an important part of their daily activities, Blomberg said.
In light of this, the store simply plans to use its promotions to make consumers aware of the availability of the service and let them decide when they need to use it, Blomberg explained.
"We have quite a few customers that were injured or sick over the winter, and now they're shopping with us through the phone all the time," he said.
Blomberg said customers need to get used to home shopping and that it can be a slow-building process. For example, when store personnel have gone out to make presentations at retirement centers, they often capture only two or three people who are really interested in using the service. But once a few retirees have a positive experience using the service, other retirees are willing to try it.
He said lots of people use the service in the winter; others have signed up their grandparents to make sure they get their groceries. "There's a lot of intermittent usage and the core group orders all the time," he said.
Blomberg said he has no doubt the competition in the area, Hy-Vee Food Stores, West Des Moines, Iowa; Rainbow Foods, a division of Fleming Companies, Oklahoma City; and Cub Foods, a subsidiary of Supervalu, Minneapolis, will be watching its efforts in this area.
He explained that home shopping is a big investment in time and money; simply putting the catalog together from which customers can then order groceries is a monumental task in and of itself.
Having spent nearly two years offering the service, however, Blomberg said the home-shopping service has helped Barlow gain a competitive advantage in its market. Without disclosing figures, Blomberg said the service is making money.
He said if the competition does eventually enter the market, they will face the same challenges it faced two years ago. "We've made all our mistakes. They're two years behind us."