Americans may not be quite ready to buy groceries on-line, as the failure of any number of pure-play dot-coms to reach their projected revenue targets attests.
Many supermarkets, however, have found that shoppers are eager to use the Internet to help make their purchasing decisions.
The result is many food retailers have created Web sites with little to no e-commerce capability, but with considerable marketing punch.
"Every bricks-and-mortar operation is not in a position to offer on-line selling," said Sean Sullivan, associate publisher, marketing, at Good Housekeeping magazine, New York, and a member of the judging panel for the Food Marketing Institute's annual advertising awards, which now include a Web site category. "But having a Web site is a benefit for the consumer. You can give background on your company, store hours, information for school projects."
The FMI awards panel, Sullivan said, was " looking for effectiveness in conveying a message. Is the corporate brand of the store coming through?"
The best site, according to FMI's judges last year, belonged to Price Chopper, the 96-store Northeastern chain owned and operated by the Golub Corp., Schenectady, N.Y.
Early this month, a visitor to www.pricechopper.com would have found a Web site whose most prominent offer was the chance to win a microwave oven for shoppers who signed up to receive the chain's e-newsletter. Also prominently displayed were the chance to join the company's Baby Club and a photo of the recipe of the day, braised cube steak with onions. (Although the beef-hungry cook had better act fast; minutes later the day's recipe had become hot artichoke chili dip.)
Some e-shopping was available through the site. Through Price Chopper, customers could order flowers, party platters and a lobster dinner for two. The site also had a link to another Golub Corp. company, HouseCalls, which offered roughly 5,000 items for home delivery. HouseCalls can be reached directly at www.housecallsonline.com.
Joanne Gage, Price Chopper vice president, consumer and marketing services, told SN, that one of the most popular features on the Price Chopper site is the e-mail link to the company. "We get lots of compliments -- and complaints," she said. "It's a real challenge to handle the increased number of communications as well as the increased expectations for a quick reply."
She added that the site attracts readers with a wide range of interests. "Some are looking for bargains and ads," she said. "Some are looking for careers and jobs. It runs the gamut."
Gage said the company has been using its site successfully for job recruitment. "When people look at the site, they wonder, 'Is this a place where I'd want to work?' We know we're sending a message to prospective employees as well as to shoppers."
When Price Chopper introduced its site in 1993, it was managed by a third party, according to Gage. The company brought it in three or four years ago, she said.
There have only been a few major changes over the years, she noted. "We used to do a lot of contests," she recalled. "They worked, but it took a lot of time and effort."
Instead, she said, the company would rather focus on maintaining an up-to-date Web presence. "It takes a lot of effort to keep the site fresh," Gage said. "The coupon offers we make have to be decent offers."
One advantage of marketing through coupons on the Web, as opposed to circulars and print ads, she pointed out, is that they can be quickly changed. "We can get rid of something instantaneously," she said. "We tell our stores, 'If the redemption starts to kill you, we can take the coupon off the Web.' But that's a hard concept for people to get used to."
Runner-up for the best Web site in the FMI advertising awards was Roundy's, Peewaukee, Wis. The homepage of the wholesaler/retailer -- at www.roundys.com -- directs visitors to three sub-sites: one for supermarket consumers, one for Roundy's retail customers and one for manufacturers of Roundy's private-label products. (As of early this month, the site for manufacturers was still under construction.)
Roundy's consumer services homepage -- www.roundys.com/htmdocs/consumer/index.html -- offers a minimalist approach to Web-site design compared to the Price Chopper site. There are no contests, no clubs, no recipes. On the main part of the screen, there's a photo of some vintage Roundy's trucks labeled "About Roundy's" and inviting visitors to "Start here." Beneath that, a section of a mock classified ad labeled "Employment." To the right, an assortment of five Roundy's private-label items -- ranging from quick oats to cake mix -- unlabeled and unclickable. In a column on the left, for those not looking to find out company history or a job, there are a series of clickable options including "Roundy's Quality Products," "Retail Locations" and "Consumer Response."
At least, that is what the page looked like to a visitor one day in early November. Mike Schmitt, Roundy's vice president, sales and development, said, "We try to change the Web-page look as often we can. We'll change the look to reflect the promotion of that particular week. It's constantly evolving over time. So many supermarket sites become stale. Customers do not return to them."
Schmitt said what customers seem to return to Roundy's site for the most is information about sale items. "I didn't think they would use it in that matter, but it is a use that has been received very well."
Also, recipes are another big draw on the site, he said. Although the homepage doesn't feature them, recipes can be found through clicking on "Related Links" on the homepage's left-side column. "We have the biggest array of recipes we can find out there," said Schmitt. "We hear a lot of positive comments about that."
Until this month, nothing had been on sale at the one-year-old site, but that too is evolving. In the first week of November, Schmitt said, Roundy's introduced an e-commerce test at a single store. Customers can now go on-line, place an order and have it packed and ready for pickup later that day.
Depending on the results of the test, Schmitt said the company will have the program "up and operating at six stores by the end of December." Roundy's, however, is not about to launch an Internet-based home delivery program. "I don't think that part of the shopping on-line model works for us today."
Another site that has attracted the attention of industry observers is that of Ukrop's Super Markets, Richmond, Va. The main page -- www.ukrops.com -- has many similarities with Price Chopper's, although the large type at the Ukrop's site is distinctly kinder to the eyes of aging baby boomers. There is a contest, grand prize a laptop computer, open to all those who register, either on-line or at an in-store kiosk, at Ukrop's meal planning and recipe center. There are suggested menus, with recipes just a click away. And there are Ukrop's two e-commerce offerings: party planners and holiday meals. Perhaps the most significant difference was the prominent play the Ukrop's site gave to an upcoming local event, the International Brunswick Stew Festival, which was scheduled to be held not at a Ukrop's store but at a Richmond farmer's market.
In most ways, however, Ukrop's site looks and feels like many other supermarket sites. Like other sites, it is in a state of flux. Scott Ukrop, Ukrop's vice president, marketing, told SN, "We began the site about four years ago. It's moved from essentially an on-line brochure to a place where customers can talk with a nutritionist through e-mail."
It is also a site aimed at and read by typical supermarket customers. "The Web is becoming more mainstream as Internet access expands," Ukrop said. "Our ad receives some of the highest numbers of hits on our site, which means that more price-conscious people are getting on-line."
In addition, the site is a place where people look for jobs as well as groceries. "We're not doing job postings yet," Ukrop said, "just general employment information, but it's one of the most frequently viewed features on our site."
And yet, Ian Melanson told SN the Ukrop's site represents the real future of the Internet in food retailing, not as a vehicle for e-commerce but as the medium for target marketing.
Melanson is vice president, marketing, meals.com, a subsidiary of Coinstar, Bellevue, Wash., and the company that created the meal planning and menu center that Ukrop's is enticing its customers to join by dangling a chance to win a laptop computer before them.
Meal.com's goal is simple, according to Melanson. "We want to make your frequent shopper card the most important card in your wallet," he said.
The way that will happen, he explained, is target marketing based on dates from customers' frequent shopping cards. "There are about 1,200 items on sale every week, twice that number if you include manufacturers' coupons," said Melanson. "By combining our knowledge with that of the retailer, we can screen for shoppers the four or five offers they will actually be interested in."
Or the retailer can let customers know when an item they are interested in based on purchases, say salmon shipped fresh from the Pacific Northwest, an item that comes to market for about two weeks each year, is available. The customers can order their fish on-line in advance, and the retailer can order as much or as little of the salmon it needs. It's a win-win situation, said Melanson, for both stores and shoppers.
Or is it just another on-line dot-com fish story?
Some retailers told SN they are extremely hesitant about doing much of anything with the information gleaned from frequent shopper programs. "At this point, it's a consideration, but we've not done it yet," said Roundy's Schmitt. "Our shoppers do have concerns about privacy, and so we're very cautious about anything we do with information we get from customers."
Price Chopper's Gage was also less than gung ho about using customer data. "Maybe down the road we'll try target marketing," she said. "We are careful about privacy. Maybe we'll try it if we can have people easily opt in and opt out. We don't want our customers to think we're sending them junk e-mail. We're very sensitive to that."
Although the retailers are hesitant, they may eventually come around to Melanson's sales pitch. He does offer them an alternative to the trench-warfare mindset of capturing market share by conquering the competition's customers.
"Managing relationships with existing customers is extremely powerful," he said. "The returns from marketing to customers already in your store and getting them to purchase new categories can be staggering."
