SAN FRANCISCO -- A shakeout among on-line food retailers is likely to occur within the next two years, Ben Nourse, president of Greatfood.com, Seattle, said here.
"The shakeout is coming for e-tailing companies within the next year or two, because you can't have 10 companies be dominant," Nourse told the efood 2000 conference here, sponsored by the International Quality & Productivity Center, New York.
The companies that succeed, he said, will be those that understand their goals, drive traffic efficiently, take good care of customers "and are prepared to be light on their feet. The Web is moving at Internet speed, and it's a matter of adapt or die."
Nourse said on-line retailing represents a return to customer service. "That was proven at Christmas, when we learned that customers are no longer willing to sacrifice service to shop on-line," he said. "The companies with good service will be the ones who are able to make it."
Greatfood.com, which offers more than 1,500 gourmet food items, was founded by Nourse and his wife in their garage in 1995; it was acquired late last year by 1800flowers.com.
That acquisition will enable the new owner to broaden the product mix for consumers looking for high-end gift items while focusing on customer service, Nourse said.
"With their help, we are expanding our category dominance as we try to broaden the idea that food and eating can be fun," he said.
One of the keys to the success of Greatfood.com, Nourse said, has been grouping products together for meal occasions, including romantic dinners, tailgate parties or holiday events, "because wrapping content and merchandise together is important in on-line retailing."
In its on-line advertising, Greatfood likes to "target, target, target," Nourse said, "by finding opportunities for people who like to buy gourmet products."
He said the company seeks performance-based deals and then looks carefully at its sales results. "We look at the results daily, and if something isn't working, we will change it. That's the way we retain customers for future purchases," Nourse explained.
During last year's Christmas season, Greatfood offered consumers a "netalog" -- a 32-page companion publication to its Web site, highlighting about 100 stockkeeping units. The netalog was designed to drive traffic onto the web, Nourse said. Greatfood included a netalog area on its Web site that listed the same products in the same order as the print catalog, he pointed out.
"Our goal was to convert catalog shoppers to Web shoppers," he explained.
Asked about the results of the netalog experience, Nourse said the effort "attained its objectives and paid for itself." He declined to elaborate.
