BELLEVUE, Wash. (FNS) -- HomeGrocer.com is using fresh produce as a lure to develop new customers in Western Washington. Customers placing their first order with the Internet on-line-based company receive a free sample bag of fruits and vegetables when their order is delivered to their home. The retail value of the produce is more than $15, according to company officials.
The promotion comes on the heels of consumer research, said Jon Landers, vice president, marketing and sales for the company based here. According to the responses, users enjoyed the convenience of having dry groceries selected and dropped off. However, e-shoppers still expressed a preference for selecting fresh produce themselves. Other polls have indicated that consumers are also wary of purchasing perishables without the reassurance that comes with touching, smelling and seeing the actual product themselves. The goal is to change that reticence, said Landers.
"When we came up with the promotion we had to communicate that selecting food items is something we do every day and the quality of our produce is high every day," he said. "To prove to customers that we are offering the best, we came up with giving away free bags of produce. The goal is to let customers see we take pride in selecting their produce items for them."
Items in the complimentary bagged assortment reflect the seasonal variety. In the week SN explored the promotion, nectarines, apples, red and yellow peppers and organically grown tomatoes and salad greens were included in the bag along with salad croutons.
Currently, 15 to 17% of HomeGrocer.com sales are coming from produce, according to Landers. Bananas are the No. 1 seller within the 12,000 SKUs offered. Within the category, floral accounts for 8% of sales, while 10% are organically grown offerings.
The e-retailer kicked off the promotion with a direct-mail flyer that reinforced the convenience and quality benefits of ordering produce, as well as grocery, through HomeGrocer.com. The text points out that a personal shopper "selects your groceries just the way you like them from our private facility."
Likewise, all of the operator's perishables "are kept refrigerated until the moment they reach your door, so they stay chilled and fresh."
With produce a key element to differentiation, the operator plans to increase its warehouse space to 100,000 square feet by late fall. This expansion will give HomeGrocer.com the ability to increase offerings to 17,000 SKUs and expand the produce staging area space for better product flow.
"We have to provide a facility that is a good home for produce," said Landers. "We are not obliged to prepare produce for the sales floor. Instead we commit ourselves to keeping items at the temperatures and humidity that keeps them optimally fresh and flavorful."
Areas of geographical expansion are also in the wind for the operator. Currently the delivery areas incorporate the Seattle and Portland areas. By the end of the year, HomeGrocer.com intends to be operating in the Northern and Southern California marketplaces as well.
To maintain the quality standards, produce is brought into the operator's warehouse the night before it is available for personal shoppers to select. Items are washed, inspected and weighed. Through sourcing agreements most items are about one and one-half days away from the grower or shipper. Landers says that 40% of the produce items come farm-direct from within the state.
"This procedure eliminates two days [from] the process," said Landers. "We have no stock rotation. Personal shoppers are specially trained how to select produce, what to pick and how to pack in the bags and how to position the produce bags in one corner of the tote for delivery."
